Import drops to $32.35b in FY13 on dull businessAKM Zamir Uddin
The country’s import bill payment registered a negative growth of 7.06 per cent in the fiscal year 2012-13 compared with that of an 8.96-per cent growth in the FY 2011-12 because of decreased import of capital machinery, industrial raw materials and food grains.
According to the Bangladesh Bank data released on Wednesday, the settlement of letters of credit or actual import bill payment stood at $32.35 billion in the FY13. The LC settlement in the FY12 was of $34.81 billion, or 8.96 per cent higher than the figure of the FY11.
An economist and a business leader said the political unrest was responsible for the negative growth in the import.
They said the lower import of capital machinery and industrial raw materials had hit the country’s GDP growth in the last fiscal year and the downward trend would also put an adverse impact on the GDP growth projected for the current fiscal year.
Former Federation of Bangladesh Chambers of Commerce and Industry president AK Azad said the existing political unrest was mostly responsible for the declining trend in the import growth in the FY13.
‘The businesspeople have taken a “wait and see” approach in expanding their investment due to the current political uncertainty. So, the import of capital machinery and industrial raw materials decreased massively in the last fiscal year,’ he told New Age on Wednesday.
In this situation, the liquidity in the banking sector increased significantly in the last few months as the businessmen are now reluctant to take loans from the banks, Azad said.
‘I fear that the actual GDP growth in the FY13 might not cross 5.5 per cent, much below the government’s target of 7.2 per cent.’
According to the Bangladesh Bureau of Statistics, the country’s provisional GDP growth was 6.03 per cent in the last fiscal year.
The BB data showed that the growth in settlement of the LCs for industrial raw materials and capital machinery registered a negative growth — 2.50 per cent for industrial raw materials and 15.85 per cent for capital machinery — in the FY13.
The growth in settlement of LCs for industrial raw materials was 9.65 per cent and that for capital machinery was 22.95 per cent in the FY12.
The settlement of LCs for industrial raw materials was of worth $13.03 billion and that for capital machinery $2.11 billion in the FY13.
LC settlement for industrial raw materials was of worth $13.37 billion and that for capital machinery $2.51 billion in the FY12.
Bangladesh Institute of Development Studies research director Zaid Bakht said the country’s investment sector was now facing a crisis due to the lower import of capital machinery and industrial raw materials.
‘There is no scope to be complacent about the $16 billion foreign exchange reserve of the country as the reserve has increased amid lower import payments,’ Zaid told New Age on Wednesday.
‘I fear that the import of
capital machinery and the industrial raw materials might drop further in the months to come as the political violence would worsen ahead of the national elections.’
The recent financial scams in the banking sector have also played a role in the declining trend in the import payment, Zaid said.
Most of the scheduled banks have now taken cautious policy in opening fresh LCs which discouraged their clients to expand investment, he said.
Besides, the banks are not giving bills of acceptance for back-to-back LCs easily due to a lack of confidence among them, he said.
The BB should take initiative to restore the confidence among the banks, he said.
The BB data showed LC settlement for food grains (rice and wheat) in the FY13 posted a negative growth of 28.25 per cent from a negative growth of 53.56 per cent in the FY12.
LC settlements for food grains in the FY13 were of worth $664.28 million against $925.87 million in the FY12.
The import of food grains decreased significantly in the period due to bumper harvests in the last few seasons.
The BB data showed that the opening of overall LCs also registered a negative growth of 2.84 per cent in the FY13 compared with that of a negative growth of 4.01 per cent in the FY12.
LCs worth $35.98 billion were opened in the FY13 against LCs worth $37.03 billion opened in the FY12.
comments powered by Disqus
Bangladeshi shrimp exporters on Wednesday expressed hope that they would be benefited because of imposition of additional duties on shrimp import by the US traders from four Asian countries, including India and Vietnam, and South American country Ecuador. Bangladeshi exporters would be able to increase its export... Full story
The Bangladesh Telecommunication Regulatory Commission is likely to modify the 3G auction process, bowing down further to the demand of the mobile phone operators, said BTRC officials. They said the operators were lobbying with the commission high-ups to turn things into their favour including elimination of phased auction system and price of unsold block. Full story
Bangladesh Bank has asked the scheduled banks to let businesses to allow export of their products by submitting export forms and shipping bills if they do not have letters of credit. To this end, the BB issued a circular to the banks’ head office or principle office... Full story
Prime minister Sheikh Hasina on Wednesday urged Brazil to import world-class Bangladeshi products like jute, RMG, leather and leather goods, ceramic and pharmaceuticals. The prime minister made the request when newly appointed Brazilian ambassador to Bangladesh Wanja Campos da... Full story
Bangladesh Bank’s financial inclusion policy has yet to get momentum as the number of inactive farmer accounts which were opened with a Tk-10 initial deposit increased notably in the last quarter of the just concluded financial year on year-on-year basis, said officials of the central bank. Full story
Dhaka stocks ended flat on Wednesday, the last trading session of the week, amid volatile trading as political clashes panicked the investors. The benchmark general index of the Dhaka Stock Exchange, DSEX, finished at 3,983.46 points, adding just 4.11 points, or 0.10 per cent. Full story
The government has embarked upon a plan to set up a ‘BSCIC Printing Estate’ outlaying Tk 187 crore at Barbarta under Sirajdikhan upazila of Munshiganj district, according to the Ministry of Industries. The estate, first of its kind, would have 419 industrial plots and create 17,000 job opportunities during the project period of four years. Full story
The eurozone finally escaped on Wednesday a crippling 18-month recession which has cost millions of jobs and tested the single currency to the limit but deep doubts cloud the outlook. The European Commission was quick to warn that tough structural reforms, including unpopular austerity policies, must be pursued without let-up if the recovery is to last. Full story
The head of Fonterra’s New Zealand milk products business resigned on Wednesday, less than two weeks after the world’s biggest dairy exporter said some of its products could contain a bacteria that can cause botulism. Fonterra, New Zealand’s biggest company, said Gary Romano resigned as managing director of NZ... Full story
India’s inflation accelerated sharply to close to six per cent in July as a weak rupee pushed up import costs, data showed Wednesday, deepening worries about the slowing economy. The Wholesale Price Index, India’s closest-watched cost-of-living gauge, rose to 5.79 per cent from a year earlier, up... Full story
A host of foreign pharmaceutical and baby formula firms have been investigated by Chinese regulators in recent weeks, but analysts say they have become convenient scapegoats for consumer anger over high prices and safety scares. The domestic companies that are the main culprits behind a... Full story
The dollar was under pressure on Wednesday after a weaker-than-expected US retail sales report, while euro trading focused on fresh eurozone economic growth data due later in the day. In afternoon Tokyo trade, the greenback changed hands at 98.14 yen, slipping from 98.22 in New York Tuesday afternoon. Full story