Bangladesh is apprehensive about missing the export target for the current fiscal year, as it has to earn $7.9bn more in the final two months of FY2014-15.
Trade analysts and exporters fear that it would be quite impossible to fulfill the gap, as the last 10-month trend suggests.
The dismal export performance is attributed to the country’s political unrest, devaluation of Euro against US dollar, weak demands of global consumers and compliance issues – all putting a bar on placing high volume work orders, they said.
As per the latest data of the Export Promotion Bureau (EPB), during July-April of FY2014-15, Bangladesh fetched $25.30bn in export earnings against a $33.2bn target, registering a rise of 2.63% compared to the same period a year earlier.
The export earning needs to be upped by 23.8% to reach the target.
The RMG sector, the lifeline of export earnings, failed to reach the target. In July-April, Bangladesh earned $20.56bn by exporting clothes against its target of $26.89bn for the current fiscal year.
As per the EPB data, the woven sector earned $10.55bn, which is 4.53% less than required to reach the target while knitwear earned over $10bn, 6.3% less than the required target amount.
Among other major sectors, frozen foods missed the export target by 16.76% followed by tea by 22.68%, leather and leather products by 19%, shrimp by 14.25%, raw jute by 13.17% and computer services by 6.6%.
“A $33.2bn export target was very easy to achieve, but the political unrest stood in the way,” Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy told the Dhaka Tribune.
“Bangladesh will be far away from meeting the target on the basis of the current growth trend,” CPD additional Research Director Khondaker Golam Moazzem told the Dhaka Tribune.
He cited four broad reasons – political unrest in the first part of the year, devaluation of the Euro against the US dollar, slow demands from the European buyers and compliance issues – as obstacles to meeting the export earnings target.
Bangladesh might be able to earn $3bn in the remaining two months by achieving 5% growth, he said, adding that the total export earnings will touch $31bn if it achieves 10% growth, he added.
“In the January-February period of the current fiscal, exporters failed to net expected orders due to the political unrest, which cast a shadow on export earnings,” EPB Vice-Chairman Shubhashish Bose told the Dhaka Tribune.
Bose added that a 10% growth target was set, but due to the devaluation of the Euro and political stalemate, it would not be possible to reach the target.
Some sector people also raised questions about growth, as they witnessed a negative production growth and accounts.
“From my perspective and production report, I am doubtful about the growth target as products and earnings from exports show meager growth,” an exporter said, preferring not to be named.
From the beginning of the year, a jolt had been felt in production because of the turbulent political atmosphere in the country, which hit earnings badly, he added.
The government dreams to become a middle-income country by 2021 and to earn $50bn from RMG export by the fifth anniversary of Bangladesh’s birth, but it will be unlikely if the export earnings do not reach a desired level, he added.
