Bangladesh posted a positive export earnings growth in July - the first month of ongoing FY25 - despite the deadly protests carried out by students and citizens, which ultimately culminated in the Hasina regime’s collapse.
The Balance of Payment (BoP) data, recently released by the Bangladesh Bank, shows that the country’s export earnings reached $3.84 billion in July this year, up from $3.47 billion posted in the same month of FY24, showing a 0.4 per cent year on year growth.
Readymade garments (RMG), which brings in the lion’s share of export earnings for Bangladesh, also saw a positive growth in July.
A sub sector of RMG, kinwear earnings in the same month was around $1.73 billion with 2 per cent year on year growth, while another sub sector woven garments earned $1.45 billion with 3.9 per cent y-o-y growth.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Senior Vice President Abdullah Hil Rakib said, “We usually export more in July, but we failed as the country went through a critical period.
“We could not run production for 5 days in July, which impacted our overall exports. But our students and citizens secured our independence, and we are optimistic that the sector will get back on track soon.”
He then pointed out, “We however are facing an illogical unrest of RMG workers in Ashulia zone since early September, and we believe that a vested quarter is behind this. The government should tackle this situation as soon as possible.
“Otherwise, the orders will go to the neighbouring countries.”
It should be noted that in July this year, the Export Promotion Bureau (EPB) had decided not to publish export data for the next three months to resolve data errors in export statistics.
During this period, the government agency plans to find out the reason behind the discrepancies in export data and will correct it. After that, it will begin publishing the monthly data again.
However, the Bangladesh Bank published the export data for July FY25 using the National Board of Revenue (NBR) and EPB as sources.
The regulator noted in its BoP report that the NBR revises and provides the export shipment data to the central bank and EPB by adjusting multiple entries for FY24.
The central bank was pressured to disclose the actual account of export earnings - including the actual amount of forex reserves - after getting approval from the International Monetary Fund (IMF) for a $4.7 billion loan programme.
The reason for this move was a huge discrepancy between the export data of EPB and Bangladesh Bank. According to BoP data, export earnings were $33.67 billion during July-April period of FY24, but EPD data showed $47.47 billion for the same period.
Under the circumstances, the difference in the export earnings posted by these two agencies is $13.80 billion or 29 per cent.
The Hasina regime’s finance minister Abul Hassan Mahmood Ali had assured that the data will have an impact on the GDP calculation for FY24, despite the error in export earnings data.
The Bangladesh Bureau of Statistics (BBS) had estimated that the country’s GDP will reach $459 billion for FY24, which is a 5.82 per cent growth, based on the first seven months (July-January) of that FY.
However, the then government had set a 6.75 per cent revised growth target for FY24. For the current FY, 6.75 growth target was set in the budget by the Hasina regime.
Balance of payments (BoP)
During this July, import payment growth was negative, which would have a positive effect on the current account balance and overall balance.
But the negative growth of remittance, little growth of export BoP’s current account balance, and overall balance showed deficits during that month.
The import payment stood at $4.94 billion in July with 2.6 per cent negative growth.
After a severe and persistent shortage of USD, Bangladesh went into an import restriction mode from the last two years. The remittance inflow was $1.91 billion in July with 3 per cent negative growth.
The current account balance stood at a $193 million deficit in July, compared to a $295 million deficit in the same month of previous year.
Meanwhile, the financial account of BoP showed improvement in July, $166 million positive, which was $897 negative in the same month of FY24.
Net Foreign Investment (FDI) and portfolio investment was positive in July this FY. Net FDI inflow was $141 million with 11.9 per cent growth, and portfolio investment inflow was $18 million. However, the portfolio investment was $2 million in July FY24.
Medium- and long-term loans (MLT) payment situation is better in July, while the fresh loan inflow was negative during that month. In July this year, MLT payments were $311 million with an 81.9 per cent year on year growth.
But fresh MLT inflow was $287 million, which was a 29.1 per cent negative growth.
The overall balance of BoP was negative in July, but it was less negative compared to previous year. The overall balance was $641 million negative in July FY25, compared to $1.06 billion negative posted in the same month of FY24.
