[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Exports edge up in further relief to economy

Bangladesh’s exports have shown resilience, displaying steady growth in key sectors such as garments, plastics and seafood in the first eight months of fiscal year (FY) 2024-25, somewhat defying global economic headwinds and domestic concerns like high inflation and political uncertainty.

www.thedailystar.net

Exports edge up in further relief to economy

Bangladesh's exports have shown resilience, displaying steady growth in key sectors such as garments, plastics and seafood in the first eight months of fiscal year (FY) 2024-25, somewhat defying global economic headwinds and domestic concerns like high inflation and political uncertainty.

In February, export earnings stood at $3.97 billion, a 2.77 percent year-on-year increase from $3.86 billion, according to data published by the Export Promotion Bureau (EPB) yesterday.

This development comes days after the Bangladesh Bank reported a jump in remittance inflows, which surged 25 percent year-on-year to $2.52 billion last month, offering much-needed relief to a strained economy.

Total exports in the first eight months of FY25 reached $32.94 billion, up 10.5 percent year-on-year.

Exports of the readymade garment (RMG) sector, Bangladesh's largest export earner, grew 1.66 percent last month.

Overall, apparel exports rose 10.64 percent to $26.79 billion in the July-February period compared to the preceding year.

In the same period, knitwear exports climbed 11.01 percent to $14.34 billion, while exports of woven garments increased 10.22 percent to $12.45 billion.

The RMG sector accounted for over 81 percent of total export earnings, yet again underlining its dominance in the country's export basket.

"The outlook of our garment exports is promising as work orders are rebounding," said Faruque Hassan, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

However, he said law and order must be improved as international clothing retailers frequently raise concerns over security.

According to Hassan, the country is also benefiting from US President Donald Trump's tariff policies. Higher tariffs on Chinese and Mexican apparel exports to the US are redirecting orders to Bangladeshi manufacturers, he opined.

However, low pricing remains a key challenge, he mentioned.

Manufactured goods, which make up the bulk of exports, saw a 10.49 percent increase to $31.87 billion in the first eight months of the fiscal year. Key segments such as plastic products, rubber and headgear posted strong growth of 22.25 percent, 34.71 percent and 11.40 percent, respectively.

Leather and leather products showed mixed results. While total exports in this category rose 8.48 percent to $757.50 million, raw leather exports fell 8.68 percent.

In contrast, leather footwear exports surged 24.02 percent to $450.88 million, showing a shift towards higher-value products.

The engineering sector recorded a 7.48 percent rise, led by electric products and bicycle exports, which grew by 13.51 percent and 64.7 percent, respectively.

Specialised textiles, including knitted and woven fabrics, also saw strong growth, increasing 21.62 percent.

Terry towel exports grew by just 3.11 percent in the first seven months but plunged 41 percent in February to $1.5 million from $2.54 million a year earlier.

M Shahadat Hossain Sohel, chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, linked the sector's declining competitiveness to rising production costs driven by increased gas and power prices and higher wages.

He said that corruption at customs, including bribes during raw material imports and product shipments, has further complicated the situation.

"Without immediate reforms and a reduction in production costs, the sector may struggle to remain competitive in international markets," Sohel commented.

RN Paul, managing director of RFL Group, said strong performance in the plastics sector was driven by export orders from new destinations.

Previously reliant on European markets, the industry has recently expanded to North America, Australia and parts of Africa.

Paul said RFL registered export growth of 35 percent in the past eight months and anticipates further expansion, particularly with the addition of new products such as toys.

Commenting on the export figures, Selim Raihan, executive director of the South Asian Network on Economic Modeling, expressed mixed sentiments.

The economist said that the sustainability of export growth remains uncertain due to challenges such as stagnant private investment, high inflation and security concerns. The upcoming general election adds to the macroeconomic uncertainty, he noted.

Still, Raihan said the export growth figures are encouraging although the earnings largely came from previous orders.​

 

[Saif]

Bangladesh may take advantage of global trade tension

The trade tension across the world is shifting the wind, and Bangladesh may rather take advantage of it, says an industry leader...

www.newagebd.net

Bangladesh may take advantage of global trade tension
United News of Bangladesh . Dhaka 04 March, 2025, 22:44

The trade tension across the world is shifting the wind, and Bangladesh may rather take advantage of it, says an industry leader.

‘At the same time focus and attention should be given on investments in the backward linkages,’ said Faruque Hassan, said Director of International Apparel Federation (IAF) in an analysis shared with the media on Tuesday.

He shared a detailed analysis of the European Union’s apparel import for the period from January to December 2024.

This data provides insights into the performance of various countries in the global apparel market and Bangladesh’s position within it.

This data reflects the EU’s imports from Bangladesh between January and December 2024, indicating goods that entered through EU ports during this timeframe.

The global apparel market has experienced a modest growth, with the total import value increasing by 1.53% from US$91.17 billion in 2023 to US$92.57 billion in 2024.

Bangladesh has also managed to achieve a growth of 4.86%, with export values rising from US$18.86 billion to US$19.77 billion, Hassan said.

China, the largest supplier to the EU, has shown a growth of 2.61 per cent (year on year), with exports increasing from US$25.41 billion to US$26.07 billion.

Notably, Cambodia and Pakistan have exhibited impressive performances, with growth rates of 20.73 per cent and 12.41 per cent respectively, which is significantly higher than Bangladesh. Vietnam and India grew by 4.21 per cent and 1.97 per cent respectively. Turkey experienced a 6.64 per cent decline during the mentioned period of time.

In terms of quantity, EU’s global import increased by 8.98 per cent, with Bangladesh showing a commendable growth of 10.18 per cent in the same period, while China surged higher than Bangladesh by 12.05 per cent.

However, the analysis said, on a unit price basis, Bangladesh has seen a decrease of 4.84 per cent, which is a point of concern.

In fact the unit price of EU’s global apparel import has gone down by 6.83 per cent, significantly influenced by the -8.43 per cent price slash by China.

The price cuts by Vietnam and Cambodia are also noticeable.

This may be noted that the EU-Vietnam Free Trade Agreement (FTA) has been in effect since 2021, granting Vietnam the preferential benefit of a gradual removal of tariffs by the EU. However, taking a closer look at the European Union market, we can observe the comparative shares of various suppliers.

The share of Bangladesh in EU’s apparel was 21.37 per cent of the EU’s total apparel imports in dollar value, which was 20.69 per cent in 2023.

China, being the leading supplier, accounted for about 28.12 per cent in 2024, which was 27.87 per cent in 2023.

Other notable suppliers include Vietnam with 4.66 per cent, and India with 4.89 per cent.

The analysis underscores the need for Bangladesh to focus on strategic initiatives to enhance competitiveness, said Hassan who served as the President of Bangladesh Garments Manufacturers and Exporters Association (BGMEA).

While the growth in export volume is encouraging, the decline in unit prices is a challenge. ‘It is crucial that we explore opportunities to add value, improve operational efficiency, and tap into diversified markets to sustain growth,’ Hassan said.​

 

[Saif]

BB steps help boost remittance inflow

Against the fast depleting foreign exchange reserves of the country, some heart-warming reports are coming from the inward foreign remittance front. Notably, the precious inward hard currency that reportedly flowed into the economy last month amounted to US$2.528 billion. This is reportedly the fou

thefinancialexpress.com.bd

BB steps help boost remittance inflow
FE
Published :
Mar 04, 2025 23:06
Updated :
Mar 04, 2025 23:06

Against the fast depleting foreign exchange reserves of the country, some heart-warming reports are coming from the inward foreign remittance front. Notably, the precious inward hard currency that reportedly flowed into the economy last month amounted to US$2.528 billion. This is reportedly the fourth highest remittance receipt in a month recorded so far, while the highest receipt ever recorded was in December last year (2024) at US$2.638 billion, according the central bank. February's remittance receipt, too, marked a 23.8 per cent growth year-on-year. In the last eight months of the current fiscal year 2024-25, the total remittance inflow stood at US$18.49 billion, up from US$14.93 billion during the same period in the previous fiscal year.

Admittedly, the positive development in the country's second biggest forex earning source is welcome. It would hopefully cushion the economy against the multiple challenges arising from every conceivable sector. Now, the first thing this steady growth in remittance inflow can do is to provide some respite to the ever-declining forex reserve, which last month increased by 1.8 per cent to US$20.90 billion, calculated using IMF's so-called BPM6 method, says BB. No doubt, the enhanced remittance dollars have come in handy for the government to clear its overdue import bills, servicing foreign debt obligations, stabilising Taka against US dollar through intervening in the forex market and managing the economic shocks from the massive flight of capital, looting of banks and the overall destruction done to the economy by the previous dictatorial regime.

Increase in remittance, thanks to the BB's various regulatory measures, has arrested the decline in forex reserves as well as successfully kept the hundi operators at bay from diverting the flow of remittance dollars from the government-run formal banking channel to the so-called grey market. But the central bank has evidently witnessed a revolutionary transformation with the changing of the guard in the administration in the wake of the student-led upsurge. Hence is the rise in the remittance flow. It has also to be admitted at this point that migrant workers usually send higher amounts of remittance during the Ramadan and on other Muslim religious occasions so their families at home might meet extra expenses required during these special events. So far so good. But the central bank or the government for that matter should not be resting on its laurels, but must go the distance to arrest further raises in the exchange rate under the prevailing reference rate regime to avoid returning to a volatile forex market inviting speculators. That would again create the abhorred grey market to attract foreign remitters.

In addition to taking measures to assure optimal inflow of remittances from existing sources, the government needs also to work for expanding the foreign labour market as well as increasing skills training facilities for those workers who are already in the pipeline seeking overseas jobs. This should be complemented by preparing professionals, particularly in the IT sector, for grabbing jobs on offer in countries with fast aging population.​