The government is to take necessary steps to stand beside the ready-made garment (RMG) industry with a ‘supportive hand’ as the crisis in the sector has deepened again with the second wave of the Covid-19 pandemic.
According to a recent report of the central bank the information has come to light.
The central bank hopes that the garment sector will gradually be able to fully utilize its production capacity. However, it depends on the direction of the business situation in the western countries due to the impact of the second wave of Corona.
The information was revealed in the special report titled 'Garment Export Quarterly Review' published by Bangladesh Bank on Sunday.
The government has already announced various incentive packages to help the garment sector to deal with the negative effects of coronavirus. Apart from implementing these, other assistance is also being provided by the government.
According to the report, garment exports have been hampered as a result of the coronavirus lockdown. With the withdrawal of the lockdown, garment production and exports began to accelerate.
The second wave of corona started in November. As a result, a limited number of lockdowns were imposed in Western countries, including Europe and America. The communication system has also started to be disrupted. At the same time, business activities are being disrupted.
First vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said, "The garment sector was hit in the first push by Corona. Later, it started to turn around again, but now the second wave has hit. Business in the United States and Europe has stalled. As a result, as shops are opening less, people are buying less clothes due to reduction in their income. As a result, garment exports are being disrupted".
He said, "The bulk export of garment takes place during the winter. But this time the winter market is not responsive as expected. As a result, demand has declined. The effect will be more in the future".
According to the report, about 20 percent of garments are exported to the United States, 54 percent to European countries, and the remaining 28 percent to other countries. Out of the total exports, 74% of garment exports to European and American countries are now under threat.
Meanwhile, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sources said that the production capacity of garment units cannot be utilized more than 60 percent now. Earlier during this time 100 percent capacity could be used.
It further said that the main source of foreign exchange earnings of Bangladesh is the export of readymade garments. 83 percent of the total export income comes from this sector. In July-September, about 86 percent of the total export income came from the readymade garments sector.
