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A Sudden Big Jump in Real Export Earnings in the Ready-Made Garment Industry

The nature of earnings in the country’s textile sector has seen a sudden significant growth in the domestically manufactured garment sector. The latest data shows that from July to September of the previous year, the natural earnings in the garment sector were approximately 71 percent of the total earnings. In the same period of the previous year, the natural earnings in this sector accounted for only about 51 percent of the total earnings. Thus, in one year, the amount of natural earnings has increased by about 20 percent, according to a recent research report from Bangladesh Bank.

Although there are doubts or questions among stakeholders regarding the calculation of natural income in the garment sector. Stakeholders argue that due to the escalation of the Russia-Ukraine war, prices have risen in the United States and European Union countries, resulting in reduced purchases of goods deemed non-essential. This, in turn, reduces the sales of garments.

Again, towards the end of last year, most factories operated at 20-30 percent lower production capacity. Production has also fluctuated due to gas and electricity issues. Therefore, there is suspicion about the data on natural earnings in this sector.

On November 30, Bangladesh Bank published a report on the earnings of the garment sector. The report was prepared by the Research Department of the central bank. According to the report, in the first quarter of the fiscal year 2023-24 (July-September), the natural earnings or value addition in the garment sector stood at 8.22 billion US dollars. This calculation of natural income excludes expenses for raw materials after garment earnings.

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