Export industries may face job losses: BB

Wed, Jun 3rd, 2009 10:05 pm BdST

Abdur Rahim Harmachi bdnews24.com senior correspondent Dhaka, Jun 03 (bdnews24.com)—The central bank has predicted that export-focused industries, specially the readymade garment sector, could face job losses faced with the ongoing global recession. The prediction comes in its latest quarterly report (Jun-Mar) published on Bangladesh Bank's official website on Wednesday. It said in view of the likely reduction in trade volume, inflow of workers' remittances, and foreign capital inflows in the coming days due to the economic meltdown, the economy would probably face several challenges in the near to medium term. The central bank's prediction came at a time when finance minister AMA Muhith in the last few months repeatedly said that the coming 2009-10 fiscal would be critical for the Bangladesh economy in the face of the economic meltdown. Over 2.5 million workers are working in the garment industries, according to figure from BGMEA and BKMEA, two leading garment exporters' bodies. The report cited five challenges for the economy in the coming days. It said despite slow growth in the import bill, sharper fall in exports and remittances could lead to depletion in foreign exchange reserves unless compensating flow of overseas development assistant package is arranged. If pressure on the external sector mounts, the exchange rate could depreciate losing par value of taka with some losses of real income and purchasing power. The quarterly predicted due to sagging export performance of the recession-hit world markets and weak outlook of current transfers including inflow of remittances, FDI and other ODAs, the current account as well as overall balance would face increasingly rising pressure turning the accounts into deficit. It also said that a sizable stimulus package on top of the risk of lower tax revenue collection and continuation of ongoing subsidy programmes and the need for widening other social safety network programmes may lead more than expected fiscal deficits. bdnews24.com/arh/khk/bd/2119h.