First News
Volume:7, Number:38
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Business & Finance 2
THIS WEEK

A Sustained Slump

Target earnings in the first seven months of the current fiscal have already dropped by 4.36 percent, and experts are blaming international factors

Although export income is generally on the rise compared to the previous fiscal, the export sector is still stuck with a sluggish trend. In the last couple of months, growth in this sector remained almost static. Export earnings are not expanding in line with the country’s economic growth.

In the first seven months of the current fiscal (July-January), export has increased by only 4 percent compared to the previous fiscal. The growth rate is about half of what it used to be around the same time last year. In fiscal 2015- 16, the sector exceeded its target earnings by 2 percent, whereas the target earnings in the first seven months of the current fiscal have already dropped by 4.36 percent. Experts are blaming international factors rather than local problems behind this slump in exports. According to them, the price of RMG products is falling in the world market, which is impacting Bangladesh’s export income. Many western countries are struggling with recession, creating a drop in export orders. As a result, the sector is not being able to pick up pace. Additional research director of Centre for Policy Dialogue or CPD, Khandaker Golam Moazzem, said, “Due to a number of reasons, global demand for consumer goods is decreasing. As a result, exports are decreasing worldwide. Bangladesh is not the only country to be affected by global factors.” He added, “It is not about any weakness of our entrepreneurs either. The reforms in the RMG sector after the Rana Plaza tragedy has earned the trust of international buyers. Due to the big gap between the income target and real income, Bangladesh will not be able to earn about USD50 billion from the RMG sector in the next five years.”

According to the monthly report of the Export Promotion Bureau (EPB), Bangladesh earned USD20.11 billion from exports, which is about USD930 million less than the target income. At USD16.42 billion, export income from RMG products is less by 5 percent of A Sustained Slump Target earnings in the first seven months of the current fiscal have already dropped by 4.36 percent, and experts are blaming international factors Prices of RMG products are falling in the world market, which is impacting Bangladesh’s export earnings the target. The earning is USD650 million more than the figures last year, but it is still USD860 million short when it comes to hitting the target. During the same time, USD8.35 billion from woven and USD60 million from knit products has been earned. The woven sector (shirts, pants, etc.) has been in the worst condition for a while. The target earnings from this sector have dropped by almost 10 percent. The earnings in the knit sector have increased slightly, by 0.02 percent. Apart from the RMG sector, export earnings have increased by 12 percent in the leather and leather goods sector, 46 percent in plastics, and 14 percent in jute-based products. On the other hand, the export of frozen foods has dropped by 16 percent. The export of most other products has decreased in the first seven months of the current fiscal. Compared to January 2016, export income has increased by 4 percent last January. The income stands at USD3.19 billion. It is about 3 percent less than the target income of USD3.40 billion.

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