The garment sector in Bangladesh may miss its export target this fiscal year. The three-month political turmoil from January to March hampered shipments.
The strong performance by some competing countries such as India, Vietnam and Pakistan was another major reason for the fall. The average export growth of the three countries is nearly 10 per cent. Another setback for the sector is a lack of new investment for expansion purposes.
Between July last year and May this year, Bangladesh’s garment exports were up 5.51 per cent year-on-year but below the target of 24.26 billion dollars. Short-term challenges include lower productivity of workers, higher cost of production and a steep fall of two major currencies -- the dollar and the euro -- against the taka.
The long-term challenge for the garment sector is the Trans-Pacific Partnership (TPP), a trade agreement between Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the US. The agreement is expected to take effect soon. If the TPP is signed, Vietnam will enjoy duty benefits to the US and other prominent markets, another threat for the Bangladeshi garment items.
Bangladesh has an export target of 50 billion dollars by the end of 2021.
