DHAKA, February 2024-Bangladesh's economy has sustained growth momentum for the fourth consecutive month in January 2024, driven by resilient exports, seasonal consumption surges, and strengthened agricultural supply chains, according to the latest Purchasing Managers' Index (PMI) data. While the expansion signals economic resilience, underlying challenges such as subdued market demand, rising operational costs, and energy supply instability continue to temper business confidence in new investments and expansions.
Sectoral Performance Highlights
The PMI report reveals a mixed trajectory across key sectors. Agriculture, construction, and services accelerated their growth rates in January, contrasting with a slowdown in manufacturing-a sector historically pivotal to Bangladesh's economic engine. Manufacturing activity marked its fifth straight month of expansion, albeit at a reduced pace, with declines observed in new orders, exports, factory output, and procurement of raw materials. Employment levels within manufacturing showed tentative recovery, while backlogged orders contracted at a slower rate. Notably, future business optimism across all major sectors-agriculture, manufacturing, construction, and services-cooled compared to previous months.
Textile Sector Under Pressure
A deeper analysis of Bangladesh's textile manufacturing sector, a cornerstone of its industrial landscape, underscores persistent vulnerabilities. The industry faces intensifying competition from global peers such as China and Vietnam, which dominate international markets with consistent product quality and advanced manufacturing capabilities. Domestically, political and social instability continues to disrupt supply chains, production timelines, and order fulfillment. Compounding these challenges are lagging investments in technological innovation and equipment modernization, limiting the sector's ability to penetrate higher-value markets and reduce reliance on low-margin production.
Pathways to Sustainable Growth
To revitalize textile manufacturing and broader economic prospects, experts emphasize dual priorities: policy stability and industrial upgrading. The government is urged to prioritize political stability and reliable energy infrastructure to foster a conducive business environment. Simultaneously, industry stakeholders must accelerate adoption of automation, sustainable practices, and workforce upskilling initiatives. Collaborative partnerships with academic institutions and R&D centers are critical to nurturing innovation and enhancing global competitiveness.
Looking Ahead
The trajectory of Bangladesh's economy hinges on clarity in policy direction and the effectiveness of reforms under its newly elected government. While near-term growth remains supported by export resilience and agricultural output, addressing structural bottlenecks in energy, investment confidence, and sectoral imbalances will be vital to sustaining long-term expansion.