To attain the $72 billion export target set for FY2023-24 from goods and services, businesses have demanded an uninterrupted supply of gas and electricity and a continuation of policy support with low-rate credit.
On Wednesday, Commerce Minister Tipu Munshi announced the $72 billion target for FY24 with an 11.52 per cent growth projection. Of the export target, $62 billion is expected from goods and $10 billion from services.
In FY2022-23, Bangladesh earned $55.55 billion, posting a 6.67 per cent growth against a target of $58 billion.
Meanwhile, for the readymade garment sector, the contributor of 84.58 per cent to national exports of $55.55 billion, the target was set at $52 billion with 10.66 per cent growth for FY24.
LDC graduation, the decline in global demand due to high inflation, uncertainty centring the Russia-Ukraine War, current global economic phenomenon and monetary pressure, and tightened financial sector have been taken into consideration in setting the new target.
It is also expected that the world economy and global trade will bounce back with positive growth in 2024.
On the other hand, the government will take conducive monetary and fiscal policies for the private sector to achieve the export target.
Announcing the target at a press briefing at the secretariat, the commerce minister said that the global volatile economic slowdown has been considered in fixing the new target.
“Domestically, gas and power crisis and the non-cooperation from the National Board of Revenue have been considered while fixing the target,” he said.
The Commerce Ministry's new export target has been fixed over the real earning of the last fiscal year.
Of the amount, the $62 billion target is fixed for merchandise and the growth has been projected at 11.59 per cent year-on-year.
Earnings from merchandise shipments were $55.55 billion last fiscal year, according to Export Promotion Bureau (EPB) data.
The export target of services for FY24 has been fixed at $10 billion projecting 11.11 per cent growth year-on-year. Earnings from services exports were $9 billion in FY23.
About 84 per cent or $52 billion is expected to come from the RMG sector, which is projected to see a growth of 10.66 per cent. Among the RMG sector targets, knitwear is expected to bring in $28.30 billion and woven garments $23.70 billion in FY 24.
Resilience and positive outcomes
“Amidst the global challenges, the positive outcomes in exports emphasise the resilience displayed by traders despite the rise in gas prices,” the commerce minister said. Acknowledging the traders' feedback, he stressed the crucial need for uninterrupted gas and electricity supply to ensure the successful attainment of the FY24 target.
Commerce Ministry Senior Secretary Tapan Kanti Ghosh said, “FY23 witnessed a notable increase of 6.7 per cent, amounting to $55.56 billion in earnings compared to the previous year. A closer examination of the product categories reveals a substantial growth of approximately 10 per cent in the RMG sector.”
He added, “Despite experiencing negative growth in various sectors, including leather, the overall growth rate has reached 6.7 per cent. Upon closer inspection of global export destinations, it becomes evident that the demand for our products has declined due to the surge in prices and associated costs in America and Europe.”
In response to a question, the commerce minister said the forthcoming national elections will proceed in line with the constitutional norms, without causing any disruptions in the country.
Emphasising continuity, he stated that essential sectors such as offices, courts, banks, insurance and businesses will operate without interruption. The achievement of export targets during the election year will remain unaffected, eliminating any potential adverse impact.
Various organisations have predicted positive growth in most economies of South Asia by the end of 2023. If this forecast is correct, the GDP growth in Bangladesh will be 6.8 per cent, he added.
What’s needed to achieve the target?
“In FY23, the apparel sector was able to attain the export target and earned $36.99 billion with a 10.27 per cent growth. But it was not an easy task as the geopolitical turmoil and high inflation slowed demands of consumer goods,” Bangladesh Garment Manufacturers and Exporters Association President Faruque Hassan told The Business Post.
“We are trying heart and soul to retain that growth,” he said on Wednesday.
With the present work order inflow, current economic crisis and higher inflation in export destinations, it will be difficult to achieve the FY24 target, he said.
