Bangladesh’s exports witnessed a mere 3.8 per cent growth in August FY24, standing at $4.78 billion, when compared to the same month last year. This growth was 36.18 per cent in August FY23, when compared to August FY22.
Export growth slips at a time when the country has desperately been trying to boost its forex reserves amid declining remittance inflow, ongoing economic headwinds and USD crunch – a ripple effect of the Russia-Ukraine war.
Even when compared to previous months, the country’s export growth declined sharply in August, but export values increased slightly. In July, the country witnessed a hefty 15.26 per cent growth when compared year-on-year, show Export Promotion Bureau (EPB) data.
In the July-August period, the first two months FY24, Bangladesh earned $9.37 billion through exports with a 9 per cent year-on-year growth, crossing the actual target by 0.26 per cent.
The apparel sector, which provides the lion’s share of export earnings, contributed $7.99 billion – 85.31 per cent of the total earnings – during the same period, crossing the actual target for by 1.46 per cent.
Of the $7.99 billion figure, knitwear products fetched $4.58 billion and posted a 17 per cent growth, while the woven sector secured a 6.86 per cent rise to $3.41 billion in the first two months of this FY.
Apart from the apparel sector, most of the promising sectors witnessed a negative export growth in the July-August period.
Export earnings from primary commodities – such as fish and vegetables – also declined by 8.32 per cent to $238 million, which was $259 million in July-August FY23.
Industry insiders and economists say the export performance during the months of July and August was excellent considering global economic turmoil, as the orders were received during March-April period.
In the first two months of FY24, RMG exports grew from $7.11 billion to $7.99 billion when compared year-on-year.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Mohiuddin Rubel said, “The overall growth in RMG exports is quite impressive. However, the recent trend in trade reflects a depressing scenario of the economy and retail business, which might continue throughout this year.”
Rubel, also the additional managing director of Denim Expert Ltd, said, “For Bangladesh, the positive side is that we are capable of gradually diversifying our products and moving towards more sophisticated items, which is reflected in our growth data.”
Speaking to The Business Post, Research and Policy Integration for Development (RAPID) Chairman Mohammad Abdur Razzaque said, “Amid the global economic downtrend, and fuel and other crises, Bangladesh’s export growth is not bad. But it is not modest either.
“If the country does not ensure a modest growth in export earnings and remittance inflow, the pressure on balance of payment will persist for far longer. The country should change policies in favour of boosting reserves. Otherwise, regaining macroeconomic stability will be difficult.”
He pointed out, “The USD rate in Bangladesh is now a managed system, and not market-oriented. This is because most of the remittance inflow has shifted to informal channels, and exporters are not getting adequate incentives.
“So, the government has to adopt a floating exchange rate, which will increase remittance inflow and boost exporters’ competitiveness.”
It should be noted that Bangladesh’s remittance inflow declined by 21.47 per cent in August to $1.59 billion, compared to $2.03 billion recorded during the same month last year.
The figure also dips when compared to last month’s take of $1.97 billion, marking a 19.28 per cent decrease.
Major exports fall
In the July-August period, the leather and leather goods sector earned $194 million through exports, which is 12.73 per cent lower than the same period last FY. The sector also witnessed a 4.83 per cent short fall than the export target for the period.
Of this figure, leather earned $20 million during the mentioned period while it was 23 million in the last FY, and leather footwear individually saw 23.52 per cent negative growth year-on-year to $112 million in this FY from $146 million in last FY.
However, the leather products witnessed a sharp growth by 16.79 per cent to $62 million in July-August this fiscal year.
EPB data shows that the jute and jute goods sector saw a 10.31 negative growth in July-August to $140 million, which was $156 million in the same period last FY.
Exports in agricultural products also witnessed a negative growth to $174 million, which was $175 million in the same period last year.
The frozen and live fish industry saw a sharp decline in exports by 25.26 per cent to $61 million in July-August when compared to corresponding months in last FY, as the export earnings was $81 million.
Slower growth in other exports
Footwear industry’s export earnings rose by 6.52 per cent to $79 million in the July-August period, which was $74 million in the same period last FY.
During the same timeframe, export earnings in plastic products rose by 5.36 per cent to $35 million when compared year-on-year.
However, the pharmaceuticals sectors witnessed a hefty growth by 14.68 per cent to $31 million, which was $27 million in the last fiscal year’s July-August period.
