While the rest of Asia disappointed in terms of export revenue in 2015, there was one surprising anomaly to the pattern – Bangladesh.
Bangladeshi export earnings rose to $3.2bn last December, thereby setting a new record for the South Asian country. This phenomenal success can be attributed to Bangladesh’s growing apparel industry, which accounted for over 83 percent of December’s figures.
The country’s GDP is expected to grow to 6.7 percent this year, which will make Bangladesh one of the fastest growing economies in the world
As global demand for cheap clothing rises rapidly, Bangladesh’s position as the second biggest exporter in the world continues to hold strong, which is mainly due to its large population and low labour costs.
There is good reason for Dhaka to remain hopeful for the year ahead as well as exports account for 20 percent of Bangladesh’s GDP, while clothing in particular contributes around 80 percent of all exports. In fact, according to the World Bank, the country’s GDP is expected to grow to 6.7 percent this year, which will make Bangladesh one of the fastest growing economies in the world.
That said, the road ahead is not completely clear for the industry. With the EU being a principle recipient of garments, accounting for 61 percent of exports, there is the continued slowdown of European economies to consider.
Moreover, growing competition from Vietnam, which will grow fervently once the Trans Pacific Partnership is ratified some time this year, could threaten Bangladesh’s current global ranking. As such, Bangladeshi manufacturers will be forced to enhance productivity levels in order to maintain their competitive advantage.
Yet, even with these challenges ahead, as global trade picks up in the coming years, demand for Bangladeshi garments is also expected to increase, thereby prompting much-needed economic growth for the developing state.