Export and remittance growth give the economy hope

The fiscal year 2022–2023 ended with record-high export earnings and remittance inflows, easing pressure on foreign currency reserves and giving Bangladesh's economy a significant boost.

The fiscal year saw exporters earn $55.56 billion, up 6.67 percent from the previous year and setting a record for the highest export revenue in American history.

Additionally, remittances increased in June, reaching a 35-month high of $2.19 billion sent home by expatriates in advance of Eid ul Azha.

In comparison to the prior fiscal year, this represented a 2.75 percent increase, bringing the total amount of remittances received to $21.03 billion.

According to economists, these encouraging trends will increase Bangladesh's foreign exchange holdings.

Former Bangladesh Bank governor Dr. Atiur Rahman noted that the country's external accounts showed positive developments in the just-completed fiscal year, with both remittances and export earnings posting growth.

Dr. Rahman pointed out that exports increased by 6.67 percent and remittances increased by 2.8 percent despite the economic turmoil. Although he was upbeat, he believed that the numbers could have been higher if the nation had embraced market-driven solutions sooner.

He emphasized the need for the proposed monetary policy to be implemented immediately and praised the 'corridor system' for its positive start.

"If necessary, we may raise the spread to give the banks a little more breathing room so that the financial system is more competitive. The banks must receive more money from the risky borrowers, he said. He also demanded that the foreign exchange rate policy be put into effect right away. The chair of the development think tank Unnayan Shamannay, Dr. Atiur, added, "Multiple exchange rates must converge to a single rate as early as possible."

The country's economy, which is navigating an uncertain global economic landscape, can take heart from these record export and remittance figures.

According to Dr. Atiur Rahman, innovation in foreign exchange operations is essential for luring in more foreign direct investments.

He praised Bangladesh Bank for allowing foreign businesses to keep their funds and profits in accounts in foreign currencies, protecting them from currency conversion losses.

Dr. Atiur emphasized that foreign investors still have to overcome numerous bureaucratic obstacles in order to obtain permissions or clearances. He emphasized the significance of making one-stop services operational in a meaningful way, despite the fact that the Bangladesh Investment Development Authority (BIDA) has established them.

He also mentioned how inconsistent electricity supplies have prevented export revenues from growing more quickly. According to reports, the government is working hard to improve the state of the electricity supply, which should have a positive effect on export revenues for the current fiscal year.

Geopolitical tensions are affecting our ability to export, said Dr. Atiur. However, Bangladesh will undoubtedly experience an early return to external account stability if we can coordinate the implementation of our monetary and foreign exchange rate policies with a consistent supply of energy.

With Eid approaching, Dr. Mohammad Abdur Razzaque of Research and Policy Integration for Development (RAPID) described the export revenue as "impressive" and the growth in remittances as expected.

He cited changes in exchange rates and government incentives as the causes of the increase in remittances.

Dr. Razzaque recommended that export data from the Export Promotion Bureau (EPB) be matched with Bangladesh Bank transactions for a more accurate evaluation of global trade. He praised Bangladesh Bank for keeping up good transaction records despite the declining trends in the international export market.

According to the EPB, companies exported goods worth $5.03 billion in just June, up 2.51 percent from the same month last year. $21.61 billion was transferred overall through legal channels, an increase of 3% from the previous year. However, export revenue was $2.44 billion, or 4.21 percent, below the target of $58 billion.

According to EPB data, the export of ready-made clothing totaled $46.99 billion, a 10.27 percent increase from the prior fiscal year. However, in the fiscal year 2022–2023, export sales of leather and leather goods fell 1.75 percent to $1.22 billion.