Exports hit $4.8bn in August

Bangladesh maintained export growth in August, although the pace of growth has slowed due to dampened demand for apparel resulting from high global inflation.   

The country earned $4.8 billion from the export of goods in August, the second month of FY24, registering a 3.8 percent year-on-year growth over $4.6 billion in exports in the same month of 2022, which saw a 36 percent yearly growth, according to data from the Export Promotion Bureau (EPB) released on Monday.

Despite the slowed growth in August, overall exports in the first two months of FY24 witnessed a 9.12 percent increase to $9.38 billion, surpassing EPB's strategic target by 0.26 percent. This good news came a day after Bangladesh Bank reported an 18.78 percent decline in inward remittances for August.

The country has been grappling with a significant dollar crunch since the onset of the Russia-Ukraine war. Exports and inward remittances are the primary sources of foreign exchange earnings for Bangladesh.

Readymade garment shipments have continued to be the main driver of export growth, with a 12.46 percent average growth in the first two months, although this growth rate dropped in August, as anticipated by apparel exporters. RMG exports saw a 26 percent growth during the July-August period of the last fiscal year.

The single-month apparel export earnings for August 2023 were $4.04 billion, representing a 7.99 percent growth compared to August 2022, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The BGMEA predicts that apparel export shipments may decline in the coming months due to decreased demand in key export markets, a result of high inflation.

Apparel shipments reached nearly $8 billion in July and August, exceeding the two-month target by 1.46 percent. During the first two months, RMG exports totalled $7.11 billion. Knitwear exports grew by 17 percent to $4.58 billion, while woven garments posted a 6.86 percent growth to $3.42 billion, according to EPB data.

Woven garments earned $1.73 billion with a 2.67 percent growth, and knitwear exports stood at $2.32 billion, having grown by 12.33 percent, BGMEA data showed. Conversely, the export of home textiles sharply declined by 53.40 percent to only $186 million, down from $269 million a year earlier.

"The overall growth in RMG exports is quite impressive. However, the recent trend in trade reflects a depressing scenario in the retail business and economy, which might continue throughout this year," said BGMEA Director Mohiuddin Rubel. "The positive side for Bangladesh is that we are gradually diversifying our products and moving toward more sophisticated items, which is reflected in the growth," Rubel added.

In the last fiscal year, total garment exports were $46.99 billion, with a 10.27 percent annual growth over the previous fiscal year. Other small but key sectors, like primary commodities, frozen and live fish, agricultural products, manufactured commodities, plastic products, leather products, and non-leather footwear, also posted growth.

However, exports of jute and jute goods plunged 10.31 percent year-on-year to $140.46 million, down from $156.61 million one year ago.