The Export Promotion Bureau (EPB) has released export data for the fiscal year 2023-24, highlighting a slowdown in the growth of Bangladesh's garment exports.
From July to May of the 2023-24 fiscal year, garment exports totalled $43.85 billion, reflecting a growth rate of 2.86%.
This is a marked decrease compared to the same period in the previous fiscal year, when exports reached $42.63 billion with a growth rate of 10.67%.
The decline in exports became particularly evident in April and May 2024, significantly affecting the overall growth rate.
"Our garment exports over these 11 months have lagged behind the target by 7.63%," said Mohiuddin Rubel, Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Rubel detailed that knitwear product growth dropped by 20.75% and woven garment exports decreased by 12.48% in May alone. He attributed this decline to several global and domestic economic pressures.
Due to inflation in the global economy and interest rate hikes to control it, consumers' purchasing power has diminished, leading to reduced retail sales and garment imports, Rubel explained. He noted that global garment imports by the United States fell by 7.18% and by Europe by 12.84% during January-March 2024. Additionally, significant price drops per unit of product in key markets, ranging from 8% to 18%, have exacerbated the situation.
Domestic challenges have also played a role. Increased minimum wages, rising costs of electricity, gas, and transportation, and bank interest rates soaring from single digits to 14%-15%, combined with reduced cash assistance, have hampered the industry's competitive edge. "This is somewhat reflected in the export growth," Rubel said.
It is noteworthy that the garment sector has to face continuous new challenges to survive. “On one hand, we are dealing with complexities related to NBR, ports, and banking. On the other hand, the government has decided not to provide gas-electricity connections and bank loans to any new factories outside industrial zones, a decision we have requested to be withdrawn. If implemented, such decisions could further hinder investment and exports,” he added.
Despite these hurdles, the industry is working towards an ambitious export target of $100 billion by 2030. "Entrepreneurs are investing in new products and actively creating new markets," Rubel said. "We believe that for the sake of desired growth in investment, employment, export earnings, and the economy, the government will continue all existing support for the garment sector until alternative incentives are introduced, thereby aiding the industry's excellence and sustainability."
