RMG faces stiffer competition, rising cost: BB

Bangladesh’s garment exports increased 11 percent year-on-year to $10.10 billion during the April-June quarter, the Bangladesh Bank said yesterday in its quarterly review.

However, the central bank warned that the sector faces rising production costs and stiffer competition from rival exporting countries amid persistent global economic uncertainty and geopolitical tensions.

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“Going forward, export diversification, value-added production and enhanced productivity will be crucial for sustaining growth and strengthening the resilience of the RMG industry,” said Bangladesh Bank in its quarterly review of the apparel sector.

BB said RMG’s net exports, determined by subtracting RMG raw material import value from RMG export value, rose to 62 percent during the final quarter of the fiscal year 2025-26. The growth rate was 57 percent during the same period a year ago.

As per BB data, nine countries, including the United States, Germany, the United Kingdom, Spain and the Netherlands, were the top destinations for Bangladesh’s RMG exports during the quarter, together accounting for $7.24 billion, or 72 percent of total RMG exports.

Including this quarter’s shipments, total apparel export earnings for FY26 stood at $38.97 billion, up a modest 1 percent year-on-year, said BB.

The RMG sector’s share of Bangladesh’s nominal GDP - which measures a country’s economic output using current market prices – in FY26 declined to 7.82 percent from 8.52 percent the previous year, according to central bank data.

Meanwhile, knitwear exports rose 10 percent year-on-year in the April-June quarter, helped by a temporary rebound in international demand, higher shipments to major markets and favourable shipment timing around Eid-ul-Azha, according to the report.

“However, the recovery remained fragile amid subdued global apparel demand, intensifying competition in major markets, rising production costs and uncertainty over US trade policy,” the report said.

The modest growth recorded in the fourth quarter of FY26 stemmed partly from base effects and shipment timing rather than a sustained improvement in underlying global demand, it added.

Earnings from woven garment exports grew 12 percent year-on-year, driven by renewed shipments to major Western markets, particularly the United States, following a prolonged period of falling exports.

The report said, “Weak demand in the European Union posed a major constraint for Bangladesh, due to lower apparel demand and increased competition from rival suppliers.

“While exports to non-traditional markets remained subdued, a relatively resilient performance of the USA and Canadian markets offset this.”

Looking ahead, the central bank said the near-term outlook for the RMG industry remains moderately positive, supported by global apparel demand, competitive position in the international market and continued improvements in sustainability and compliance standards.