Korea-Bangladesh Trade: Cumulative Through May 2023
Cumulative Korea-Bangladesh trade for January–May 2023 totaled $678M, down 8.6% from $742M in the same period a year earlier. However, the pace of decline has been narrowing from -9.5% in January–February, and May alone returned to positive year-on-year growth for the first time, with exports of $92M exceeding the prior-year figure of $83M by 10.8%. After the IMF's first program review was completed in May, LC restrictions began to ease modestly.
Since the IMF approved the $4.7B rescue program in January 2023, Bangladesh's FX market has maintained a gradual stabilization. Reserves recovered modestly from the low of $3.4B to around $3.8B, and the taka rate stabilized near Tk.108/$. With the second tranche disbursement approved following the first review, LC restrictions are expected to ease in phases.
Monthly Export Recovery Trend, January–May
Monthly data show that the FX crisis impact was still strong in January–March, but early signs of recovery appeared from April. May became the first month to record positive year-on-year growth, firing the starting gun for a recovery turn. Completion of the IMF first review (late April) is identified as the direct catalyst for the May export rebound.
| Month | 2023 | 2022 | YoY | Key Issue | Trend |
|---|---|---|---|---|---|
| January | $75M | $95M | -21.1% | Post-IMF approval; LC not yet normalized | Declining |
| February | $85M | $103M | -17.5% | Partial LC easing starts | Declining |
| March | $86M | $108M | -20.4% | FX crisis impact persists | Declining |
| April | $90M | $92M | -2.2% | IMF 1st review expected completion | Recovering |
| May | $92M | $83M | +10.8% | LC margin cut; rebound achieved | Turned positive |
| Cumulative | $428M | $481M | -11.0% | Overall improving trend | Recovering |
IMF First Review and LC Restriction Easing
The IMF first program review was completed successfully in late April 2023, and the second tranche ($689M) was approved for disbursement. Bangladesh Bank began to ease import restrictions in phases. A road map for restriction easing contingent on FX reserve stabilization was published, significantly reducing market uncertainty.
Product-Level Recovery and Outlook
| Product | 2022 Jan–May | 2023 Jan–May | Change | Change % | Recovery Assessment |
|---|---|---|---|---|---|
| Synthetic Resins | $108M | $95M | -$13M | -12.0% | Recovering (May turned positive) |
| Synthetic Fibers | $77M | $68M | -$9M | -11.7% | Recovery starting |
| Steel Plates | $88M | $77M | -$11M | -12.5% | Recovering |
| Machinery | $50M | $42M | -$8M | -16.0% | Recovery lagging |
| Electronic Components | $40M | $36M | -$4M | -10.0% | Modest recovery |
| Chemical Products | $35M | $28M | -$7M | -20.0% | Impacted by non-essential restrictions |
| Auto Parts | $22M | $21M | -$1M | -4.5% | Stable |
| Other | $61M | $61M | $0M | 0.0% | Stable |
| Total | $481M | $428M | -$53M | -11.0% | Gradual improvement |
Second-Half Trade Forecast Scenarios
| Scenario | Annual Trade Forecast | Key Assumption | Probability |
|---|---|---|---|
| Optimistic | $1.75B | IMF reviews 2–3 complete early; LC fully normalized | 30% |
| Base | $1.65B | IMF proceeds on schedule; H2 recovery accelerates | 50% |
| Conservative | $1.55B | IMF implementation delayed; LC easing slow | 20% |