Wednesday, October 16, 2019

Bangladesh misses export target by 11pc in first quarter of FY20

  • Abdur Rahim Harmachi, Chief Economics Correspondent, bdnews24.com
    Published: 2019-10-07 03:20:07 BdST

Bangladesh has suffered a reverse in export earnings in the first quarter of this year so much so that it has missed the target by 11 percent.

It posted a 10.55 percent rise in FY2018-19.

The country exported goods worth $9.65 billion in July-September period, which is 3 percent less than the amount received in the same period last year, according to Export Promotion Bureau data released on Sunday.

Apparel sector contributed most, 85 percent, to the exports as usual, but with a decrease of 1.64 percent missing the target as well by 11.52 percent.

In 2018-19, Bangladesh earned $40.53 billion by exporting goods. The overall exports beat the target by 4 percent with a 10.55 percent rise.

Export earnings continued to rise in July, with an increase of 8.5 percent than the same month last year.

But it started decreasing in August with a drop of 11.5 percent than the same month last year.

In last month, September, the country exported goods worth $2.9158 billion, which is 7.3 percent less than the amount earned in September last year.

The government has set an export target of $45.5 billion for 2019-20 fiscal year.

Rubana Huq, president of the garment entrepreneurs’ group BGMEA, called for policy support and more cash incentives to help the industry flourish.

Speaking to bdnews24.com, she pointed out that Bangladesh was failing to take the chance of US-China trade war, which has compelled many companies to withdraw from the Asian economic giant.

“Sustained growth is not easy at this point. Vietnam is getting fair share of orders. Orders are being diverted to Pakistan and India as well. All these countries are offering incentives and privileges,” she said.

Rubana Huq. File Photo

Rubana Huq. File Photo

The BGMEA chief demanded that the government extend cash incentives, which is 1 percent for the sector now.

“India is giving 4 percent cash incentives on goods export while we face criticisms over our 1 percent incentives,” she lamented.

“Perception about us is that we are doing well and that we are growing. If we take four years CAGR (compound annual growth rate), the growth is already dipping,” she said.

“In the absence of any other industry, we must make sure that RMG is sustained and nourished,” Rubana remarked.

She claimed many factories have faced closure after the hike in the minimum wage.

“So, time to rethink about how we are going to go forward. Restrategising is the only answer. Policymakers must offer support,” Rubana said.

Policy Research Institute Executive Director Ahsan H Mansur agreed with Rubana on all but her call for increasing cash incentives.

“It’s impossible to push exports up by giving cash incentives. It’s a wrong idea,” he said.

Ahsan H Mansur. File Photo

Ahsan H Mansur. File Photo

The BRAC Bank chairperson suggested devaluation of taka against dollar instead.

“Our competitors China, India and Vietnam are doing this all the time. China devaluated its currency even yesterday. We must do it now,” he said.

Bangladesh’s exports dropped because Europe, the major market for Bangladesh’s RMG, is experiencing “a kind of economic recession”, according to Mansur.

The second reason behind the fall in exports is the rise in production costs against the prices exporters are getting.

“And we haven’t even devaluated our currency like our competitors have. We are falling behind on all fronts,” he said.