Bangladesh’s export earnings in December 2015 were the highest monthly exports in history. The expectation is that Bangladesh’s GDP will grow 6.7 per cent in 2016, making it one of the world’s fastest growing economies.
Bangladesh is the world’s second largest clothing exporter, behind only China. It exports the majority of that clothing to the European Union and the US, and business has been good of late. US imports of apparel from Bangladesh, for instance, increased about 16 per cent from November 2014 to November 2015.
Clothing has made up an ever larger share of Bangladesh’s total exports for years, reaching about 81.7 per cent last year. One reason for the country’s success is that there is an insatiable global demand for cheap clothes. And Bangladesh produces a lot of these. In fact this segment seems to be the country’s specialty.
But there are concerns. The country needs to diversify its exports and should start moving up the value chain into higher end products if it really wants to develop. One challenge can come from Vietnam. This has become another top location for apparel manufacturing. If the Trans-Pacific Partnership trade deal goes through, Vietnam can become an even more attractive spot for sourcing, especially for US brands.