Exports dip two months in a row
Overall exports fell by 16.52% in April although it saw a 5.38% YoY growth in the first 10 months of FY23
Bangladesh's exports plunged for two months in a row in April, adding further strain to the country's economy, which is already reeling under persisting dollar crisis as the government is struggling to boost the dwindling forex reserve to meet IMF loan conditions.
In April, exports dipped by 16.52% after it saw a 2.49% drop in March.
Top export sectors, including the RMG, leather, home textiles and jute goods saw declining demands across major markets, one of the reasons behind the slump other than the global economic slowdown, say exporters.
Export sectors earned $3.95 billion in April, while it was $4.73 billion in the same month last fiscal year, according to the Export Promotion Bureau (EPB).
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"It will certainly add pressure on the economy when the dollar crisis is yet to ease with a stress on the reserves. Besides, there is the concern if we will be able to meet the IMF loan conditions," said Ahsan H Mansoor, executive director of the Policy Research Institute.
"Export dropping in back to back months is concerning indeed," he said, acknowledging that the global factors, which are beyond our control, played a role behind the export slump.
However, Ahsan H Mansoor expressed optimism that in the next two months, when the fall-season orders start to come in, the export trend will be back on upward trend.
Overall exports for the first ten months (July to April) of the current fiscal year, however, logged 5.38% growth year-on-year to $45.67 billion.
In April, exports for the RMG sector, country's export might, stood at $3.32 billion, which is a significant decline of 15.48% compared to April of 2022.
Of the amount, the woven items shipment saw 17.48% negative growth year on year to $1.49 billion and knitwear export fell by 13.78% to $1.83 billion.
Other major sectors including frozen and live fish, agricultural products, leather and leather goods, jute and jute goods and home textiles also could not perform well in April.
These declines across sectors contributed to the overall descending trend in recent months, which stands in contrast to the otherwise positive trajectory for the mentioned period in the current fiscal year.
In the first 10 months of FY23, apparel shipments saw over 9% growth to $38.57 billion, of which $20.96 billion came from knitwear exports, which registered 8.97% year-on-year growth. Earnings from the woven garment export were up 9.24% to $17.60 billion.
"Apparel demand was low in the global markets. Besides, there was a vacation of some 12 days last month as it was the month of Ramadan and Eid Ul Fitr. These are reflected in the export earnings," Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The Business Standard.
BGMEA President Faruque Hassan said that apparel export orders had been declining for the last few months.
That effect was tackled by the export of some high value items and export growth in the non-traditional markets except for the last two months, he said.
Dr Mohammad Abdur Razzaque, research director at Policy Research Institute of Bangladesh said "Apparel export orders are declining mainly due to three reasons—high bank interest rates, technical economic slowdown in western countries and high energy prices in the global market."
"Western countries recently hiked their bank interest rates, reducing consumers' buying capacity," added Dr Razzaque, also chairman of Research and Policy Integration for Development (RAPID).
BGMEA director Mohiuddin Rubel said if the apparel sector is to meet the government's export target of $46.80 billion, it has to log $4.3 billion worth of export in each of the next two months.
Export of leather and leather items experienced negative growth of about 25% in April and it also saw a little bit lower earnings YoY in the first ten months, according to EPB data.
Home textile exports also drastically fell by 53.4% in April to $80 million, which was $173.56 million in the same month of last fiscal.
Joseph Chowdhury, business head of Momtex Expo Ltd, told TBS that the war-driven high inflation has impacted business, as people are not buying home textiles.
Export earnings for the jute industry were just the same with a slip of 20.25 % to $ 770.82 million YoY in the first ten months of FY23, while the earnings was $966.51 million in the same period of last fiscal.
