Originally posted in The Daily Star on 2 August 2022
July delivers more good news as exports rise
Merchandise exports from Bangladesh grew 15 per cent year-on-year to $3.98 billion in July, giving a much-needed breather to the country amid global uncertainty and foreign exchange crisis, official figures showed yesterday.
The higher overseas sales came after imports fell 31 per cent to $5.5 billion and remittances went up by 14 per cent to $2.09 billion in the first month of the fiscal year.
Exporters and economists called the earnings handsome for the fact that the global supply chain is going through a difficult patch from the economic volatility stemming from the Russia-Ukraine war and higher energy costs and inflation worldwide.
The increased shipment will help the government breathe a sigh of relief after abnormally high imports sent the current account deficit to a record high, caused foreign currency reserves to fall at a faster clip, drove down the value of the local currency against the US dollar, and pushed up inflation to a nine-year high.
“We are happy that export earnings are still good,” said Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, the knitters’ platform.
In July, earnings were lower than expected as the garment industry, which accounts for about 85 per cent of Bangladesh’s export receipts, went on an eight-day holiday on the occasion of Eid-ul-Azha.
“Our export may face a slowdown in the coming months but it will not slip into the negative territory since we have a lot of work orders shifted from China, Sri Lanka, Myanmar, Cambodia, Vietnam, Indian and Pakistan,” said Hatem.
As usual, garments helped rake in higher earnings.
Apparel shipment grew 16.61 per cent year-on-year to $3.36 billion. Of the sum, $1.85 billion came from knitwear exports, an increase of 11.80 per cent compared to a year ago, data from the Export Promotion Bureau (EPB) showed.
Woven items fetched $1.51 billion after pulling off a 23.11 per cent growth.
In the export destinations, woven items are performing strongly helped thanks to the faster recovery of global economies from the severe fallout of Covid-19 as the receding of virus infections allowed more people to return to workplaces, join social events and go on vacations.
Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, thinks attaining a double-digit export growth amid a precarious global situation and the volatility in the foreign currency market is not only good for the sector but also good for maintaining macroeconomic stability.
“July earnings also surpassed the monthly target which indicates that the outlook is still bright and it is possible to ensure a double-digit export growth.”
He thinks the depreciation of the local currency against the US dollar has given a competitive edge to exporters.
The inter-bank exchange rate of the dollar was Tk 94.70 on Monday, up 11.67 per cent from a year ago.
Shipment of leather and leather goods also fared well in July, netting $99.41 million, up 9.82 per cent, EPB data showed.
Jute and jute goods shipment rose 5.17 per cent to $63.91 million. Home textile, non-leather footwear items, specialised textile, rubber and plastic goods put on a good show as well.
Some sectors such as frozen and live fish, agricultural products, chemical products, carpet and terry towels did not perform well in July.
Exports may continue to grow throughout the current fiscal year, defying the gloomy global economic outlook on the back of the continued recovery of the shipment of lower and semi-high-end apparel items, according to exporters.
The government has targeted a 10.10 per cent higher export at $58 billion for the year, buoyed by an all-time high shipment of $52.08 billion in the last fiscal year that ended in June.
“Shifting orders from China to Bangladesh will help maintain a decent export growth in the coming months,” Moazzem said.