Bangladesh’s RMG export earnings are expected falter in the second half of the current financial year, says a report by Bangladesh Bank. 

According to the report, the apparel sector in Bangladesh faces numerous challenges at present. These include high interest rates, inflation, precarious geopolitical environment and concerns regarding productivity growth.

To address these issues, the report makes certain recommendations including diversifying of garment production, Key recommendations include diversifying garment production, enhancing productivity and efficiency, reducing lead time, fostering product innovation, exploring new markets, conducting effective research, improving the skills of garment workers, and modernising production processes to sustain export momentum.

Currently, Bangladesh's export earnings form the RMG sector has been badly impacted by the Russia-Ukraine conflict and global inflation. However, the sector is witnessing resurgence in purchase from major international brands and retailers. This rebound signals progress in mitigating the impacts of the Covid-19 pandemic and the Russia-Ukraine conflict.

However, amidst these developments, the export of apparel manufactured in Bangladesh may face difficulties in the upcoming months due to high interest rates, price inflation, geopolitical uncertainty, sluggish productivity growth, and a complex financial landscape..

According to the report, in the second quarter (October-December) of the current financial year, the revenues from the RMG sector increased by 1.35 per cent from the previous quarter to $1,177 crore while it decreased by 7.46 per cent  from corresponding quarter last year. 

Knitwear exports experienced a steeper decline of 0.67 per cent to $671 crore from the previous quarter and a 4.17 per cent decline from the same period last year.

Exporters attribute this crisis to reduced garment imports by developed countries, including the United States, due to high inflation.