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Bdesh's apparel sector faces significant decline in orders, threatening foreign exchange crisis


Bangladesh's largest foreign currency earning sector, the apparel industry, has experienced a significant decline in orders for the April-June season, with international clothing retailers and brands reducing orders by 20% to 40%. The development could deepen the country's foreign exchange crisis.

This slowdown is due to a surplus of apparel stocks in stores and higher living costs in western economies, leading to lower demand for garment items from Bangladesh. The war between Russia and Ukraine has also impacted garment shipments, affecting low-end and basic products more than high-end items.

Despite the decline in orders, Bangladesh's garment shipments have remained resilient, with exports reaching $4.63 billion in February, up 7.81% year-on-year. The positive export earnings can be attributed to an increase in the unit price of a garment item, growth in shipments for high-end value-added garment items, and a spike in shipments to new destinations, particularly in Asian markets.

Investment in the garment sector stands at $25 billion, with another $25 billion expected in the next five years. Exporters remain hopeful that orders will rebound from July as stores finish selling old stocks and shipping for the next winter season begins.

Nonetheless, the current slowdown could deepen Bangladesh's foreign exchange crisis, as the EU and the US, which account for over 80% of Bangladesh's apparel exports, are facing inflationary pressures.


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