Bangladesh’s large-scale manufacturing sector (RMG) made an impressive comeback in December 2024, recording a 10.37% year-on-year growth, according to the latest data from the Bangladesh Bureau of Statistics (BBS). This marks a significant turnaround from the sluggish growth seen earlier in FY 2024-25, when the sector managed only a 3.85% increase in Q1 (July-September) reportedly.
The ready-made garments (RMG) sector – the backbone of Bangladesh’s manufacturing industry – played the most crucial role in this surge. With a weight of 61 out of 100 in the manufacturing index, its performance directly influences the overall industrial outlook. As clothing orders picked up after Q1, the sector’s revival fueled a broader economic rebound.
The quantum index for large industries jumped to 246.58 points in December 2024, up from 223.42 in December 2023. Of the 23 manufacturing subsectors, 14 posted growth, while seven sectors – including tobacco, textiles, leather, chemicals, paper, and computer-related industries – saw declines.
Beyond RMG, several industries contributed to the December boom:
✅ Beverages (+21%)
✅ Food (+10.11%)
✅ Wood & Related Industries (+15%)
✅ Printing (+19%)
✅ Electrical Equipment (+16%)
✅ Rubber (+14%)
✅ Fabricated Metals (+12.73%)
✅ Machinery & Equipment (+28.88%)
✅ Pharmaceuticals & Furniture (+4% each)
This industrial expansion aligns with the Purchasing Managers’ Index (PMI), which stood at 61.7 in December, signaling economic growth and renewed business confidence.
Despite this positive momentum, high lending rates remain a significant barrier to business expansion, according to Bangladesh Chamber of Industries (BCI) President Anwar-ul Alam Chowdhury (Parvez). He also pointed out low purchasing orders as a challenge for industrial acceleration.
Read more: Bangladesh’s Apparel Exports Surge In US And EU, But Unit Prices Take A Hit
Meanwhile, Syed Nazrul Islam, former BGMEA leader and Managing Director of Well Dress, acknowledged that although some RMG orders had shifted to India and Pakistan, Bangladesh has successfully regained its competitive edge.
Economic analysts view this growth as part of a broader recovery trend. Dr. Zahid Hussain, former World Bank lead economist in Dhaka, noted that political unrest in mid-July temporarily slowed industrial growth. However, a stabilized foreign exchange market and rising domestic demand have helped the economy bounce back.
Yet, inflation remains a stubborn challenge. While export earnings surged by 10.41% to $32.93 billion in July-February FY25, economists caution that prolonged inflation could weaken consumer demand – potentially slowing further industrial expansion.
Dr. M. Masrur Reaz, Chairman & CEO of Policy Exchange Bangladesh, linked the sector’s growth to seasonal factors and the strong rebound in RMG. With RMG expanding by over 16% in December, he expects continued improvements in the coming months.
Interestingly, he also predicted that climate change could spur further growth in the beverage sector, as witnessed during the scorching summer months last year.
While Bangladesh’s manufacturing sector has successfully regained momentum, inflation and lending rates remain key hurdles. If these challenges can be addressed, the country may be on track for sustained industrial expansion in 2025 and beyond.
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