Mixed reaction to Bangladesh stimulus package
According to reports, there has been a mixed reaction to the financial stimulus package introduced by the Bangladeshi government on April 19. The $500 million package is designed to help the businesses cope with the effects of the current financial turbulence. However, many feel it does not go far enough and that some sectors will continue to be at a serious disadvantage.
However, those involved in the leather sector are likely to be encouraged by the package, as the main export sectors that will benefit are leather, jute and frozen goods. Approximately 13% of the total budget will be split between these sectors in a bid to turn around the trend of negative growth that has been seen in the last few months. The government has increased the cash subsidy rate for the leather and leathergoods sector to 17.5% from 15%. Exports of finished leather from Bangladesh have fallen in the last few months as a result of lower demand. Finished leather exports fell 33% to $124.7 million during the period July 2008 to February 2009 compared with $186.3 million in the corresponding period last year.
