Though Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has recently set an annual export target of $100 billion by 2030, but we are observing that the country is experiencing a slowdown.
Foreign exchange reserves in Bangladesh slipped to $39.79 billion as of July 13 from $45.33 billion a year earlier. And the country’s trade deficit widened to a record $33.3 billion in the fiscal year ended June.
The US dollar has soared to record Tk 102.4 on the open market as the Bangladeshi taka has lost its value. According to the industry experts, the main reason behind the taka devaluation is a shortage of the foreign currency due to high import costs.
Bangladesh’s inflation rate has topped 6 per cent for nine consecutive months, with annual inflation in July hitting 7.48 per cent, putting pressure on people’s life and overall economy.
On top of that, Bangladesh government took a decision to increase fuel prices by up to 51.7 percent, the highest such increase in the country’s history. Many prominent economists claimed that government has set the new fuel price to fulfill a key condition of the International Monetary Fund (IMF) from which Bangladesh is seeking a USD 4.5 billion loan. A key condition to have the loan, among other conditions, is the withdrawal of subsidies from the energy sector.
Whatever the reason behind the fuel price hike, it will directly affect electricity, transport and other sub-sectors. Due to the overall economic condition- -along with other industries–country’s export oriented garment business is facing trouble. Existing gas crisis and power cut widened the trouble much more. The cost of doing business is increasing dramatically.
Bangladesh textile and apparel manufacturers should set an attainable goal which will ensure a sustainable goal. The export target of $100 billion by 2030 is undoubtedly an eye catching target, but many industry experts urged to emphasize more on increasing profit margin by exporting value added textile and apparel items. Also, sector peoples demanded to upgrade the ease of doing business removing the barriers—what businessmen face while doing business. In order to maintain the continuous development of the textile and apparel industry and reducing economic slowdown government should change its strategic plan to outline the country’s long term vision to enjoy a sustainable economy.