Staff Reporter :
Bangladesh has seen a substantial decrease in import payments during the first nine months of the financial year 2023–24, according to recent data released by the Bangladesh Bank.
The decline, amounting to 16.03 percent for import letters of credit (LCs), has been attributed to a combination of a forex crunch and strict import restrictions.
These factors have particularly impacted local manufacturing sectors that heavily rely on imported raw materials.
From July to March of this fiscal year, Bangladesh’s overall import payments amounted to US$ 49.21 billion, down significantly from US$ 58.27 billion in the same period the previous fiscal year.
Customs-based imports also exhibited a downturn, declining by 15.54 percent during July-March of the current financial year, compared to a 12.37 percent fall in the same period of FY23, as indicated by central bank data.
The import cost of intermediate goods, essential for investment and production, fell by 14.2 percent over the nine-month period, amounting to US$ 29.66 billion, down from US$ 34.55 billion previously.
Similarly, imports of capital goods, crucial for investment and production, decreased by 22.5 percent in July-March of FY 2023–24. Specifically, imports of capital machinery dropped by 23.7 percent, totaling US$ 8.06 billion during this fiscal year.
Food-grain imports declined by 34 percent, while consumer goods imports fell by 18.5 percent, according to Bangladesh Bank data.
However, the reduced import opportunity could not stop the current depletion of the forex reserve, but rather create huddles to increase countries industrial production.
Over the past 34 months, the Bangladesh Bank has sold approximately $32.79 billion from its foreign exchange reserves to banks, including $13.5 billion in FY23 and $7.62 billion in FY22, in an effort to stabilise the economy. From July to December of the current fiscal year, the depletion of forex reserves amounted to $6.7 billion, and this figure surged to over $11 billion by April 22 of this year.
However, the reduced import of capital machinery, raw materials, and intermediate goods has significantly declined in the current fiscal year, which has had adverse effects on both industrial production and employment levels in the country.
The Bangladesh Bureau of Statistics (BBS) has projected a slowdown in factory output growth, estimating a drop to a mere 6.63 percent for FY24.
This marks a notable decline from the 8.37 percent growth recorded last year and a sharp fall from the growth rates of 9.86 percent and 10.29 percent observed in the two preceding fiscal years.