Bangladesh Eyes Export Growth Amid Political Unrest

Bangladesh's ready-made garment (RMG) exports to the European Union (EU) recorded a 2.47% year-on-year decline in the first nine months of 2024, fetching €13.43 billion compared to €13.77 billion during the same period last year, according to Eurostat. This dip aligns with the EU's overall apparel import decline of 2.48% to €62.86 billion, driven by the global economic slowdown.

Bangladesh's leather footwear exports reached $228.47 million during the July-October 2024 period, marking a five-year high and a 9% increase from $182.11 million in the same period of 2023, according to the Export Promotion Bureau. This growth is attributed to competitive labor costs and orders shifting from China due to its rising production costs.

Bangladesh's merchandise exports grew by 20.6% in October 2024, reaching $4.13 billion, with the RMG sector leading the way, contributing $3.30 billion. This growth reflects recovery in key markets and the stabilization of labor unrest, allowing for a return of orders previously shifted elsewhere

Bangladesh Bank has scaled down its Export Development Fund (EDF) to $2.51 billion after finding that some businesses were misusing it for illicit transfers abroad. In line with IMF loan conditions, the EDF initially expanded during the COVID-19 crisis and further raised to support economic recovery has faced gradual cuts due to dollar shortages. 

Bangladesh, with a population of 180 million, expects significant export growth despite ongoing political instability and shifts in global trade. The Ministry of Finance, referencing the World Trade Organization (WTO), forecasts a global trade rebound, predicting a 2.6% growth in 2024 and 3.3% in 2025. Emerging Market and Developing Economies (EMDEs) like Bangladesh are set to outperform advanced economies, with EMDE exports projected to grow by about 4%.

Bangladesh is unlikely to regain U.S. Generalized System of Preferences (GSP) benefits due to ongoing labor rights concerns, as stated by Finance Adviser Salehuddin Ahmed during discussions in the U.S. The GSP, which allowed low or zero-duty exports, was suspended for Bangladesh in 2013 following major labor rights violations.