Bangladesh's export earnings further experienced a year-on-year (YoY) negative growth of 16.52% in April of the 2022-23 fiscal year (FY) for the second consecutive month.
According to recently published data from the Export Promotion Bureau (EPB), earnings fell to $3.95 billion in March 2023 from $4.73 billion in the same month of the previous fiscal year.
Furthermore, the country's monthly export earnings fell below $4 billion, the steepest drop in recent months.
This year's April export earnings target was $5.5 billion, which was 21.67% less than the export target.
The RMG sector, the highest export earner of the country, bagged $3.32 billion in April of FY23, fetching 15.48% negative growth from $3.93 billion in FY22, EPB data stated.
The target for the RMG sector for April was $4.07 billion, meaning 18.4% less than the target.
However, the receipts stood at $45.67 billion in the first ten months (July-April) of the current fiscal year (FY23), a narrow increase of 5.38% from $43.34 billion in the July-April period of FY22.
According to EPB data, except for RMG, the major exporting industries showed negative growth in the July-April period of FY23.
Earnings from garment exports increased 9.09% year on year to $38.57 billion in July-April of FY23, up from $35.36 billion in the same period of FY2021-22.
According to EPB data, the knitwear sector earned $20.96 billion, up 8.97% from the previous year, while woven shipments earned $17.29 billion, up 9.24%.
Among other key earners, leather and leather goods saw a 0.52% decline to $1 billion, down from $1.01 billion in the same time the previous fiscal year.
The home textile sector has experienced negative growth in recent months.
The sector earned 940.8 million in July-April of FY23, a decrease of 29.34% from $1.31 billion in the same period the previous year.
The promising agriculture sector experienced a second consecutive negative growth of 28.81% to $731.35 million in the July-April quarter of FY23, falling short of $1.04 billion in the same period of FY22.
Earnings from jute goods fell by 20.25% to $770.82 million in the mentioned period, from $966.51 million in the previous fiscal year.
According to EPB data, the engineering sector, another promising area of the country, witnessed negative growth of 31.01% to $674.11 million in the July-April quarter of FY23, down from $674.11 million in the same period of FY22.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told the Dhaka Tribune that the negative growth was projected due to lukewarm purchase orders.
"There isn't enough UD, and the factories are operating at less than full capacity and inflation in our destinations has reached historic levels as a result of the ongoing geopolitical crisis," he noted.
He also stated that, as a result of inflation, western countries have raised interest rates, causing consumer prices to rise excessively.
It has curbed their clothing purchasing capacity which led to overstocks in the retail shops. The buyers are at a move-slow policy for which the quantity of export declined nearly six months ago but the value grew on high-value products over the past few months, finally, the value has been declining since March, he added.
He also said that domestic factors like a hike in the price of gas, and electricity also impacted the production of factories.
“We have to wait until the global policy is normalized. We need adequate governmental support at this moment,” he added, saying that if they don't get it, it will cause factories to shut down and create unemployment.
Mohiuddin Rubel, director of the BGMEA echoed the president's opinion and said there is a negative trend due to global reasons.
“However, exports may have decreased due to the Eid holidays too,” he added.
The target of exporting RMG products in FY23 is worth $46.80 billion, meaning Bangladesh has to export at least $4.3 billion monthly in the next two months.
Regarding achieving the target, Rubel said it cannot be said that there will be much improvement at this time.
“We have to observe the next two months whether it is negative only because of Eid or whether the current trend has also played a role,” he added.
Talking to Dhaka Tribune, Professor Mustafizur Rahman, a distinguished fellow of the CPD, said that three dimensions are impacting the export of the country.
“The major destinations of the Bangladeshi shippers are taking various policies to tackle inflation which have curbed the purchasing capacity of them, meaning there is a shrink from the demand side. Moreover, the raw materials price is declining slowly, so, the value is also decreasing,” he added.
The third dimension is Bangladesh is less competitive as there is a lack of product diversification, market diversification, lead time issues, high cost of doing business and many more.
“We have to fix all these – for both RMG and non-RMG products – to revive the growth, if not, it will be a worrying signal as negative growth in export will later create pressure on national reserves,” he added.
Bangladesh bagged $52.08 billion through exports in FY22, registering a 34.38% year-on-year growth.
