Net RMG export ratio at all-time high of 71.5%

Bangladesh’s readymade garment (RMG) net exports increased significantly in the April-June quarter, contributing positively to the country’s trade balance. Net exports – total exports minus raw material imports – surged to an all-time high of 71.5%, reaching $8.4 billion in that quarter, meaning that apparel makers added more local value to their export products. As a result, the country’s trade deficit narrowed by 48% in FY23 compared to a year ago. According to central bank data, the total export in the RMG sector in the final quarter of FY23 was $11.74 billion. Out of this amount, $3.35 billion was spent on the import of raw materials for these products, accounting for 28.5% of total earnings. That is, net exports or domestic garments added a value of $8.4 billion. This is about 39% higher than the same quarter of the previous fiscal year. According to the central bank report, in FY23, the RMG sector made a significant contribution of 10.35% to the country’s GDP. The sector has shown signs of recovery after the pandemic. However, challenges like the ongoing Russian-Ukraine war and its resultant impact on supply chain disruptions, the global inflation hike, and monetary policy tightening by the Fed may badly impact the progress of this sector.

Source: https://www.tbsnews.net/economy/rmg/net-rmg-export-ratio-all-time-high-715-680734

7 new industrial parks, centred on Padma Bridge, planned in southern districts

The Bangladesh Small and Cottage Industries Corporation (Bscic) plans to set up seven large industrial estates in the country’s southern region over the next three years, banking on the improved communication system made possible by the Padma Bridge. As part of the plan, between 2023 and 2026 the corporation will invest Tk8,000 crore from government funds to build these establishments on 2,000 acres of land in Faridpur, Jashore, Madaripur, Narail, Magura, Shariatpur and Pirojpur, with a target of creating 14-15 lakh fresh jobs. Currently, there are 21 industrial estates in 18 districts of the south-western region of the Padma Bridge, operating under the Bscic. But these estates are small in size and were built on a minimum of 10 acres of land to a maximum of 50 acres of land.

Source: https://www.tbsnews.net/bangladesh/infrastructure/7-new-industrial-parks-centred-padma-bridge-planned-southern-districts

Most banks in tight spot amid liquidity crunch

A majority of banks in Bangladesh are facing difficulties in running their day-to-day banking activities owing to a tightening liquidity caused by the dragging foreign currency crisis, slower deposit growth and lacklustre loan recovery. This has forced lenders to turn to the call money market, a short-term money market that allows large financial institutions to borrow and lend, to secure funds in order to meet their payment obligations. On Thursday, the transaction on the overnight interbank call money market stood at Tk 9,449 crore, the highest since August 11 last year when it amounted to Tk 9,706 crore. Multiple factors such as slower deposit growth, a weak pace of loan recovery and the purchase of dollars by banks from the Bangladesh Bank to clear import bills have brought about the current situation. Deposit growth decelerated to 8.40 percent in the last fiscal year of 2022-23 from 8.90 percent the previous year. Non-performing loans (NPLs) totalled Tk 131,620 crore in March, marking a 16.02 percent increase year-on-year, BB data showed. The volume was 8.80 percent of the total credits disbursed in the banking sector.

Source: https://www.thedailystar.net/business/economy/news/most-banks-tight-spot-amid-liquidity-crunch-3392836