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Dhaka Tribune

May exports see 26.61% growth after two months' slump

Bangladesh’s export earnings finally saw a jump of $1 billion

Update : 04 Jun 2023, 09:10 PM

Bangladesh's export receipts registered a 26.61% year-on-year (YoY) growth to $4.84 billion in May of the current FY23, higher from $3.83 billion in the same month of the last fiscal year.

After a decline of two straight months, the export earnings of the country finally saw a jump of $1 billion, according to the Export Promotion Bureau (EPB) data.

The RMG sector, the highest export earner of the country, bagged $4.05 billion in May of FY23, fetching 28.33% growth from $3.15 billion in FY22, EPB data stated.

The receipts stood at $50.52 billion in the first eleven months (July-May) of the current fiscal year (FY23), an increase of 7.11% from $47.17 billion in the July-May period of FY22.

Also, export earnings touched the milestone of $50 billion in the first eleven months of the current fiscal.

According to EPB data, except for RMG, the major exporting industries showed negative growth in the eleven months of FY23, though leather and leather goods saw a very narrow growth.

Earnings from garment exports increased 10.67% year on year to $42.63 billion in July-May of FY23, up from $38.52 billion in the same period of FY22.

According to EPB data, the knitwear sector earned $23.27 billion, up 10.92% from the previous year, while woven shipments earned $19.35 billion, up by 10.36%.

Among other key earners, leather and leather goods saw a very narrow growth of 0.42% to $1.12 billion, up from $1.11 billion in the same time the previous fiscal year.

The home textile sector has experienced negative growth in recent months. 

The sector earned $1.02 billion in July-May of FY23, a decrease of 30.14% from $1.47 billion in the same period the previous year.

The promising agriculture sector also experienced consecutive negative growth of 27.78% to $795.01 million in the July-May quarter of FY23, falling short of $1.10 billion in the same period of FY22.

Earnings from jute goods fell by 19.57% to $848.6 million in the mentioned period, from $1.05 billion in the previous fiscal year.

According to EPB data, the engineering sector, another promising area of the country, witnessed negative growth of 27.79% to $518.97 million in the July-May quarter of FY23, down from $718.66 million in the same period of FY22.

Regarding the export jump, Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told the Dhaka Tribune that the jump is compared to May of last year.

"There were 18-20 working days in May of last year due to Ramadan and Eid ul Fitr, so the export increased compared to last year,” he remarked.

Moreover, a number of deferred shipments of April have been cleared in May, which impacted the export earnings.

“The purchase order is not increasing, the factories are operating at 60%-70% of their capacity and there is no proper sign of improvement,” he also said. 

The western countries have raised interest rates due to inflation which caused consumer prices to rise excessively and has curbed their clothing purchasing capacity which led to overstocks in the retail shops, Azim also said.

“The buyers are at a move-slow policy for which the quantity of export declined. The situation may be prolonged this year as there is no sign the Ukraine-Russia war will end anytime soon,” he added.

Talking to Dhaka Tribune, Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), said that it was a positive thing but the increase is on the lower base as Eid-ul-Fitr was during last year's May. 

The noticeable thing is that export of RMG is increasing while other sectors see negative growth, though domestic value addition is higher on non-RMG products like leather, jute etc, he also said.

Value addition is 90%-95% on non-RMG products while it is 50%-55% on RMG, meaning export has increased but net earnings is not enough, he said, adding that it was disturbing for the economy.

Moreover, even after depreciating, the export earnings are not increasing, he said, adding that Bangladesh is less competitive as there is a lack of product diversification, market diversification, lead time issues, high cost of doing business, and 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.

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