Monday, 2 October, 2023

Export growth offers a ray of hope

Amid the ongoing economic slump and dwindling foreign exchange reserve, the rise in export income by 15.26 per cent in the month of July compared to corresponding month in previous year offers a ray of hope for the country’s economy. Reportedly, in the first month of the fiscal year Bangladesh’s export income was $4.59 billion, a considerable rise from last year's $3.9 billion in the same period. The rise in export is being mainly attributed to increase in the demand of readymade garments from Bangladesh. Besides, it also indicates a stable foreign exchange market and global economy. If the trend persists, Bangladesh will be able to quickly pull itself out of the current economic quagmire.
Apart from export, remittance inflow is another important source of foreign currency for Bangladesh. But of late, the country has not been getting the expected amount of remittance inflow, although there has been a big jump in the number of manpower exports. It is assumed that many of the expatriate workers are remitting their money home through illegal channels due to the higher dollar rate offered by those channels than the rate offered by the banks. The government is working to introduce a uniform dollar rate, and as part of the initiative has been depreciating taka gradually. It is hoped that by September this year there will be no difference between official and market rate of the green buck. If the government can do so, it will give a huge boost to the country’s remittance income.
That said, although the country’s export earnings are growing significantly, the policymakers must be cautious because our export basket is not healthy at all. As over 84 per cent of the country’s export earnings come from the RMG sector, policymakers should be careful of the pitfalls of over dependence on one sector. The authorities, therefore, must rethink export strategies prudently and strengthen the export basket accordingly. Diversification of the export basket is the key to ensuring a more robust and sustainable economic growth.