The readymade garment (RMG) sector started the year 2022 with a 30.36% annual growth and was turning around quite well in the post-Covid-9 period; however, then the Russia-Ukraine war in late February of last year interrupted that momentum.
Exporters said that the impact of the war may continue in 2023 and the year will be a crucial and challenging one for the apparel sector of the country.
However, the sector earned $45.7 billion by shipping apparel items in the just concluded 2022, seeing an annual growth of 27.64% from $35.41 billion in 2021.
Industry insiders said that the major challenges include the prolonged Russia-Ukraine war, mounting energy prices and fear of recession.
Moreover, 2023 is the year of the national election of Bangladesh. Rallies of the political party may create instabilities and put pressure on exports.
Speaking to the media, Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that they will face challenges in 2023 as the unit price starts to come down. Due to that, the price of the products will also start to come down.
Moreover, the demand will remain low in 2023 due to inflation, war and economic turmoil, which will impact the sector adversely.
Due to a hike in energy prices, food prices and inflation, the budget for clothing shrunk, which will also be a challenge.
He also said that to face these challenges, they should focus on inter-apparel diversification and increase efficiency, productivity and innovation.
He also said that they hope the political parties won’t demonstrate rallies that could harm the business and the economy of the country.
However, he also demanded policy support from the government that can reduce these challenges.
Speaking to the media, BGMEA Director Mohiuddin Rubel said that soon after the recovery from the shock of Covid-19, the impact of the Russia-Ukraine war began and threw the global economy into turmoil.
The main challenge is figuring out a way to overcome these barriers, he added.
He also urged all political parties to maintain a peaceful position for the sake of the country.
The industry people also said that the Covid-19 situation in China may also cause supply chain disruption.
They said that 2023 is going to be a crucial and challenging year but they are expecting a moderate export recovery in the year 2023 as sales in the western world are gradually increasing.