Tuesday, May 21, 2024


Dhaka Tribune

Services exports fall by 18.28% in H1 FY24

Earnings fell short of the ministry's target by 30.64%, which aimed for $4.76 billion in service exports during this period

Update : 28 Mar 2024, 07:30 PM

Bangladesh's service exports took a hit in the first half (July-December) of the 2023-24 fiscal year, dropping by 18.28% to $3.3 billion, as per the latest data from the Export Promotion Bureau (EPB). This marks a significant decrease from the $4.04 billion earned in the same period of the previous fiscal year (FY23).

Furthermore, these earnings fell short of the ministry's target by 30.64%, which aimed for $4.76 billion in service exports during this period.

Service exports can include a wide range of activities such as transportation, tourism, telecommunications, financial and insurance services, computer and information services, business and professional services, etc.

In December 2023, service earnings also saw a decline of 18.37% to $656 million, down from $803.62 million in December 2022.

Experts attribute this decline to a lack of efficient policies, adequate planning, high-quality education, and limited investment in the service sector, despite Bangladesh's substantial population and numerous tourist attractions.

Bangladesh continues to import more services than it exports, despite earning billions from service sales, indicating a need for policy adjustments and investment incentives.

Transport sector hit hard

Within the service sector, the transport industry experienced a significant decline of 31.15% to $422.51 million in the first half of FY24, compared to $613.69 million in the same period of FY23.

Of this, sea transport contributed $265.67 million, down by 25.65% year-on-year, while air transport earnings dipped by 40.37% to $150.25 million.

The transport sector's negative growth persisted despite the government's annual cash incentives aimed at promoting the sector. Additionally, the government is gradually increasing air carriers to seize opportunities for growth.

In the July-December period of FY24, travel sector earnings jumped by 3.39% to $220.10 million, which was $212.18 million in the same period of FY23.

Foreigners usually come to Bangladesh for business, education and tourist purposes, which are considered as travel earnings. 

Although the government fixed a $5 billion export target from information and communication technology by 2025, the sector earned only $322.28 million in the July-December of FY24, which was 7.73% lower from $349.29 million from the H1 of FY23. 

Among the information and communication sector, telecommunication service sector earnings plunged by 17.07% to $55 million from $66.36 million in the same period of FY23.

Experiencing a negative growth of 5.58%, the computer service (software, data processing and consultancy) sector earned $267 million in the July-December  FY24 period, lower from $282.77 million of the mentioned period of FY23. 

Foreign missions to Bangladesh imported goods and received service from Bangladesh, which is considered as the government service export. The country earned a decent amount of foreign currency from the sector. 

However, in the July-December period of FY24, earnings from the sector fell by 24.02% to $882.20 million, which was $1.16 billion in the same period of last FY, EPB data stated.

The construction service export fell by 14.68% to $378.82 million in the first half of FY24, which was $444.01 million in the same period of last FY.

In the first six months of this FY24, earnings from research service rose by 11.44% to $9 million.

Talking to Dhaka Tribune, Ahsan H Mansur, executive director of the PRI, said that there needs to be a lot of improvement in the service sector exports.

“We buy a lot of services but we cannot export a similar amount of services in comparison. However, the export of services is probably lower than the official amount as a huge amount of money is spent on  education, health abroad, and remittances sent by foreign workers in the country,” he added.

He explained that about $15 billion such unrecorded money leaves the country  every year where about $5 billion are spent on medical treatment in India, Singapore, Thailand and other countries, about $2-$3 billion is on education abroad and at least $4-$5 billion are being spent annually on remittances sent to India, Pakistan or Sri Lanka by the workers staying in the country.

“If we could stop these expenses, we would save a huge amount of money annually which would make our economy stronger. In fact, services export has many possibilities, which require necessary planning and policies,” he added.

In FY23, Bangladesh bagged $7.5 billion from exporting services to its various destinations.

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