Recent Aggravation of Export Earnings in Bangladesh: Is This an Outcome of Export Subsidence of RMG Sector Due to COVID-19 Outbreak?

Abstract

Bangladesh has the 2nd largest economy in term of purchasing power parity in South Asia after India. Bangladesh is also considered as one of the fastest growing middle-income countries with a market based mixed economy. Despite of trade deficit in the current account of the balance of payment, the country has been recognized as one of the key destinations of foreign direct investment. Availability of cheap labor made the cost of production lower which makes it possible to attract foreign buyers. Export oriented RMG sector has made a huge contribution in the economy of Bangladesh. Readymade garments have been the key source of export earnings with its accolades in the foreign market. This sector also provides a greater number of job creation especially for female workers. Current pandemic outbreak has raised an unfavorable situation in the RMG sector due to the lockdown in many developed countries, especially European countries which adversely affects the total export earnings of Bangladesh. Because of that, many factories have shut down their production with a huge extinction of foreign demand for RMG products. This voluminous impact of COVID-19 in the export earning capability of readymade garments industry has shifted the trade balance into an unstable situation to create short term alarm in the economy.