RMG export of Bangladesh during July-October of FY2023-24

As per the export data, RMG export declined by 13.93% in October, from 3.68 billion dollars in October 2022 to 3.17 billion dollars in October 2023. This means export has gone down by 513 million dollars in this single month, which is equivalent to around 5,643 crore Taka. The July-October performance suggests that country’s RMG export reached US$ 14.78billion during the mentioned period, up from US$ 13.95 billion in July- October of FY 2022-23 indicating 5.59% year over year growth. 
 
During mentioned four months the growth of country’s total export earnings has shrunk to 3.52% and has fallen 9.31% behind the strategic export target for the same period. The overall export in October 2023 declined by 13.64% compared to October 2022. And comparing with the strategic export target for October 2023, the actual export performance fell below 28.35%.
 
The labor unrest, which allegedly sparked around the minimum wage issues, interrupted the industry and export in the final week of October, causing such decline in RMG export in October and the consequential impact on overall export performance.   
 
We have been sharing the forecast of such downtrend in export for quite a long time. In fact the pulse of the global market is showing depressed sales and demand caused by historic high inflation followed by Russia-Ukraine war. To curb inflation advanced economies increased bank interest rates which is limiting the purchasing power of consumers and demand for goods. The ongoing Israel-Hamas war has added further fuel to the crisis. Our analysis suggests that the year 2023 will not be able to sustain the trade level of 2022. There will be some decline in apparel trade in 2023 and we will have to face the heat of it to some extent.
 
Needless to mention that the RMG industry in Bangladesh is feeling the heat of the global inflation as cost of all the inputs has increased significantly including fuel, gas, electricity, transportation, etc. From the first of July this year the Bangladesh Bank has increased interest rates which made trade and investment finance more costly.
 
While we are in a struggle to heal the wound of COVID in our industry, on top of it we invested millions of dollars in factory safety remediation since 2013 and now committedly working to decarbonize the supply chain, the current scenario is unparallel for the industry. The Government of Bangladesh has declared the new minimum wages for the garment workers increasing the gross wage of the 7th grade workers by 56.25% and the basic wage by 63.41%. This growth in wage will escalate the cost of goods further. The ongoing political unrest around the national election issue makes the situation even more volatile and difficult for the industry, and we don’t see any hope to improve the situation quickly.
 
Considering the wellbeing of the workers and being committed to greater sustainability causes, we have accepted this increase. We hope the brands and buyers will stand beside us with a spirit of responsible purchasing practices to implement this new minimum wage.   
 
The economy of Bangladesh is in a trouble. The pressure on our foreign currency reserve is mounting, it has come down below 20 billion dollars recently. Remittance earning has gone down by 4% during July-October of the current fiscal year. Now, with the deceleration in export growth the pressure on the economy is intensifying further. We, the entrepreneurs, stand committed to hold our growth curve up, we need a stable and supportive environment for that. Violence and instability cannot bring any good to our nation, neither for our workers nor for the economy. It’s us who has got the responsibility of our own family to earn the bread. If we destroy our workplace, our economy, we won’t do justice to ourselves and our beloved ones.