Bangladesh has witnessed a significant decline in imports, which could have both positive and negative implications for the country’s economy, according to official figures.
Import bills for the ongoing financial year’s first ten months (July-April) dropped by almost 9% compared to the same period last year, reaching $58.78 billion.
Data from the central bank reveals that purchases of intermediate goods, such as crude petroleum products, fell by 17.7% due to the foreign exchange crisis.
Imports of food grains, including rice and wheat, decreased by 4.5%, amounting to $22.03 billion during July-April.
Rice imports saw a 35.4% increase, while wheat procurement from international markets declined by 13.4%.
The imports of raw materials used by the readymade garment industry, Bangladesh’s largest export earner, also experienced a decline.
This reduction in imports comes as manufacturers face a drop in orders from key markets like Europe due to decreased demand resulting from global energy crisis-induced inflation.
Capital goods imports, including capital machinery and other equipment, fell by 18.8% to $11.28 billion during July-April.
Consequently, factories are not expanding, jeopardizing the government’s plan to increase the investment-GDP ratio in the upcoming financial year.
On the other hand, consumer goods imports rose by 1.9% to $4.92 billion, driven by increased purchases of spices, edible oil, and pulses.
The deficit in Bangladesh’s financial account further widened to $2.16 billion during July-April, compared to a surplus of $11.95 billion in the same period of the previous financial year.
Historically, the financial account of Bangladesh has been in surplus. Mansur noted that overcoming the current account deficit of $3.77 billion would be more manageable during normal times when the financial account was in surplus.
However, with the financial account now in the negative, addressing the shortage in the current account becomes challenging.