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.
-With New Age input
