Soaring global inflation to erode apparel demand
Apparel manufacturers yesterday expressed concerns over an alarming rise in global inflation, citing that increasing prices may affect the purchasing power of end-consumers in export destinations and cause demand for garment items to fall.
The Russia-Ukraine war has led to an increase in food and oil prices while the risk of an economic recession is also increasing in several countries, including those in Europe, said BGMEA President Faruque Hassan.
Entrepreneurs are struggling with rising production costs and supply chain challenges, he told a press conference organised by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at The Westin Dhaka marking the upcoming 37th IAF World Fashion Convention.
The challenges include a crisis of raw materials, rise in fuel oil, gas and electricity prices and an abnormal increase in container and ship rentals, he added.
In this context, Bangladesh's strategy should not be to look at the current growth in garment exports but on how it can create new ones to further enhance competitiveness, he added.
He believes the model followed by the industry in the last four decades would make it difficult to achieve desired growth.
Reducing lead time should be cost effective and investment in unique backward linkage sectors has to be increased, he said.
More attention needs to be paid on product and market diversification, technology upgradation and skill development and services, he said.
Tariff and tax rates should be kept constant for a period of five years to help investors and traders adopt and implement plans, said the BGMEA president.
The BGMEA is working on creating new markets in several countries outside Europe, such as in South Korea, India and even China, Faruque said.