Bangladesh fears export trouble amid global financial meltdown

October 11th, 2008 - 5:54 pm ICT by IANS  

Dhaka, Oct 11 (DPA) Businesses and policymakers in Bangladesh said Saturday they fear that the global financial crisis might cause a slump in the country’s export earnings as its major export destinations are severely hit by the meltdown.Businessmen said their buyers in Europe and the US have already started delaying new orders, and economists predict a higher fiscal deficit because of lower foreign capital inflow and external funding to the impoverished South Asian country.

More than 76 percent, or $10 billon, of Bangladesh’s export earnings come through the sale of ready-made garments.

“Many buyers are unusually delaying for their next orders while many others were asking for price cuts,” Fazlul Haq, president of Bangladesh’s Knitwear Manufacturers and Exporters Association, told local media.

He added at least 60 percent of garment shipments are made to European markets, so the financial turmoil there poses a serious threat to Bangladesh.

The country has shown robust export growth in the last months, but garment manufacturers said that the devaluation of the dollar, erratic power and gas supply and increased production costs put them on the edge.

Economists want regulators to watch the developments in the global financial markets and plan contingency measures in advance as the implications of a global recession may be felt on a number of domestic fronts.

“Foreign aid will be dwindling and there will hardly any foreign direct investment because of the trouble,” predicted economist Atiur Rahman, a professor at Dhaka University.

The country’s interim administration thinks that the economy is still in no need of a quick rescue package.

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