Pandemic drags down Bangladesh services exports by 5.56pc in FY20

The coronavirus pandemic has dealt a heavy blow to Bangladesh's service exports as it continues to roil the economy.

Export earnings from the sector totalled $8.5 billion in fiscal year 2019-20, missing the target by nearly 28 percent and marking a 5.56 percent year-on-year drop, according to the official data released on Monday.

The government had set a target of $8.50 billion for FY20, having earned $6.69 billion from service exports the year before.

"Considering how the COVID-19 pandemic has shattered the global economy, it's only normal that its impact would be felt in the export sectors," Ahsan H Mansur, the executive director of Police Research Institute, told bdnews24.com.

The researcher also pointed out that the trade in goods dipped by 17 percent in the last fiscal year.

But Mansur provided a grim outlook for exports in the coming months. "Although there was a slight increase in exports in July, the first month of the new financial year, it is unlikely that this trend will continue in the coming months."

"This is because the export earnings in July were made from the orders that buyers had initially suspended in March, April and May before reordering them. That's why I don't see much hope for the export of goods and services in the months ahead," he said.

The figures released by the Export Promotion Bureau or EPB at the end of FY20 on July 5 showed that the earnings plunged by 17 percent from the previous year.

Bangladesh earned $416.3 million from service exports in June of FY20, which was 18 percent less than the same month of the previous fiscal year and 41.22 percent short of the target, according to the latest data.

In total, the sale of different services amounted to $6.13 billion in the previous fiscal year, of which $5.06 came directly from the service sector. It means that the sector was responsible for 98 percent of total exports.

On Aug 4, the EPB released the data for the export of goods in July, the first month of the new fiscal year (2020-21).

It showed that Bangladesh's export earnings rebounded with around 0.6 percent year-on-year growth in July after slipping for six months in a row due to the coronavirus pandemic.

The country exported goods worth $3.91 billion last month, beating the target by 13.4 percent. The figure is also higher than that of any month in the last fiscal year that ended on Jun 30.