Korea-Bangladesh Trade Balance Trends 2021-2023: Surplus Structure and Drivers of Change
Overview of Trade Balance Trends
Korea's trade balance with Bangladesh maintained a stable surplus structure of $1.0-1.2B over 2021-2023. Korea mainly exports steel, machinery, and electronics to Bangladesh, while importing garments, seafood, and leather, reflecting a typical trade pattern of industrial goods flowing out and consumer goods flowing in.
However, import growth (CAGR 26.5%) was more than twice as fast as export growth (11.8%), causing the trade surplus ratio to narrow gradually. This reflects structural shifts driven by Bangladesh's stronger competitiveness in garments and Korea's broader sourcing diversification. This report reviews the factors behind the changing balance and the likely outlook ahead.
+$1,100M
2021 Balance
Surplus
+$1,100M
2022 Balance
Surplus maintained
+$1,200M
2023 Balance
Slight expansion
52→43%
Surplus Ratio
Narrowing trend
11.8%
Export CAGR
Steady growth
26.5%
Import CAGR
Rapid growth
14.7%p
Growth Gap
Difference in pace
2028+
Possible Shift
Deficit risk emerges
Shifts in the Trade Balance
While the absolute trade surplus remained broadly stable at $1.1-1.2B, the surplus ratio versus exports (trade balance divided by exports) fell from 68.8% in 2021 to 60.0% in 2023. The surplus share of total bilateral trade also dropped from 52.4% to 42.9%, indicating that bilateral trade is moving toward a more balanced structure.
Detailed Three-Year Trend in the Korea-Bangladesh Trade Balance (Unit: $M)
Item
2021
2022
2023
Change
Note
Exports
1,600
1,800
2,000
+25%
CAGR 11.8%
Imports
500
700
800
+60%
CAGR 26.5%
Trade Balance
+1,100
+1,100
+1,200
+9%
Absolute level stable
Surplus/Exports (%)
68.8%
61.1%
60.0%
-8.8%p
Narrowing
Surplus/Trade (%)
52.4%
44.0%
42.9%
-9.5%p
Narrowing
Export/Import Ratio
3.2:1
2.6:1
2.5:1
-0.7
Rebalancing
Drivers Behind the Changing Balance
Factors Supporting the Surplus
Energy exports+87% - infrastructure projects
Electrical equipment+67% - PGCB installations
Public procurement wins$185M/yr - large contracts
Steel exports$420M - construction demand
Factors Narrowing the Surplus
Garment imports+48% - SPA sourcing
Seafood imports+100% - shrimp and crab
Leather imports+92% - fashion sourcing
FTA expectationsProspective tariff reduction
The main force sustaining the trade surplus has been the surge in exports of energy equipment and electrical systems. Equipment shipments by Korean firms through public procurement projects led by BPDB and PGCB have supported export growth. On the other hand, the key reason for the narrowing surplus is the fast expansion of imports of garments, seafood, and leather. Broader sourcing from Bangladesh by Korean fashion and retail firms, together with import diversification in seafood, is structurally supporting import growth. If these trends continue, the trade balance could move close to parity around 2028.
Outlook and Policy Implications
01
Short Term (2024-2025): Surplus likely maintained
If large-scale energy projects such as BPDB CCPP ($200M) are awarded, exports could expand to $2.2-2.5B and the trade surplus could widen to $1.2-1.5B. However, the 2024 political transition caused a temporary contraction in trade, with recovery expected after normalization in 2025.
02
Medium Term (2026-2028): Rebalancing accelerates
If a Korea-Bangladesh FTA or CEPA advances, tariff cuts on garments and seafood could lift imports to $1.2-1.5B, narrowing the trade surplus to roughly $0.5-0.8B. This would represent a natural rebalancing of bilateral trade, while total trade itself could grow to $3.5-4.0B.
03
Need for export diversification
Maintaining a trade surplus will require continued export growth. Beyond energy equipment, Korea will need to cultivate new export lines such as ICT infrastructure, medical devices, and defense equipment. Digital infrastructure exports tied to Bangladesh's Smart Bangladesh 2041 vision could become a new growth engine.
04
Deepening complementary trade
Korea-Bangladesh trade is structurally complementary, with Korea exporting industrial and capital goods while Bangladesh exports consumer products and raw materials. This complementarity provides the basis for durable growth in bilateral trade, and an FTA could expand trade in ways that benefit both sides. The policy focus should be on expanding total trade rather than on surplus-deficit optics alone.
This three-year review of the Korea-Bangladesh trade balance shows that bilateral trade is moving toward gradual rebalancing while still maintaining a surplus. Energy and infrastructure exports remain the core support for the surplus, while rising imports of garments and seafood are driving rebalancing. More important than the absolute surplus level is the expansion of total bilateral trade beyond $3.0B and the diversification of Korea's export portfolio, both of which should be central to Korean business strategy in Bangladesh.
trade balance2021-2023surplusexports and importsstructural analysis