Bangladesh plans to double its apparel export to reach a high ambition mark of $50-bn by 2021, which currently stands at $28 bn by expanding its global markets. In the first 11 months of the year 2017, Bangladesh exported garment worth $26.40 bn, up 1.38 per cent year-on-year. The favourable US dollar-taka exchange rate has lent a helping hand to apparel exporters. At the start of the year, the greenback traded between Tk 78 and Tk 79 and after first half of December, it traded at Tk 83.20.
The dollar can be allowed to appreciate to up to Tk 85. If it goes past the Tk 85-mark, it will be bad for the balance of payment and macroeconomic stability, as imports would become costlier. However, exporters want further devaluation of the local currency against the dollar to compensate for the rising cost of production. Apart from the favourable exchange rate, the rising shipment of value-added items, brighter image of Bangladesh’s garment sector after remediation works, relative political calm and automation of production also helped prop up garment exports in 2017.
The industry is optimistic about the New Year as the country’s apparel sector is on a strong footing following the thumbs-up from the Accord and Alliance, the two foreign factory inspection agencies. Nearly 80 per cent of the remediation works to fix electrical, fire and structural flaws have been completed. Exporters are hoping for better business opportunities after this. Besides, the economies of major export destinations are rebounding gradually from the shocks of BREXIT and general elections in many EU countries.
It is expected that export receipts will be about 10 per cent higher next year. However, for achieving higher export growth the government should give the highest priority to addressing issues like congestions in the premier ports to shorten the lead-time. Adequate power and energy should be ensured and the infrastructures must be enhanced. The exporters also see the political instability as a major challenge in the New Year as the general election is due to be held at the end of next year or in early 2019.