The apparel export of the country will reach $56 billion by 2026 after a strong rebound in 2024 from the ongoing slowdown amid the turmoil in the global market and local adverse factors, media reported citing the research of CAL Bangladesh, a Sri Lankan capital market financial services company, backed by deep research insights.
The research also said that a slowdown in the major apparel markets will continue in 2023, while inflation will push wage rates higher and gas shortage will increase production costs.
However, a decline in cotton prices stemming from waning global cotton consumption will likely help ease price pressures, while the high local value addition and currency depreciation will benefit apparel exporters, said the report on Bangladesh Apparel Sector titled ‘Rags First But Riches to Follow’.
Apparel exporters with higher exposure to the European markets will experience a significant dip in revenue than those with higher exposure to the US markets as Europe proved weaker in averting the Ukraine war shocks.
Despite an estimated dip in 2023, CAL expects Bangladesh apparel exports to grow at a 5.3% compound annual rate and reach $56 billion by 2026.
With dominance in cotton-based apparel, Bangladesh is increasingly focusing on Man-made fibre (MMF) to ride on a stronger global growth outlook.
Migration of global fashion retailers’ order flow from China will drive export market share expansion for Bangladesh apparel.
CAL expects Bangladesh’s export market share in major non-traditional markets to increase to 10% in 2026 from the existing share of 8%.
Also, moving up the value chain through a gradual shift toward higher-margin products will facilitate enhanced top-line growth.