Import growth drops to 4.40pc in July-April [ Tritiyo Matra News ]

Import growth drops to 4.40pc in July-April

Local May 29, 2016

Import payments registered a lower growth of 4.40 per cent in the first 10 months of the current financial year 2015-16 compared with that of a 4.49-per cent growth in the same period of the FY15 because of sluggish business situation in the country and lower commodity prices on the international market.
According to the latest Bangladesh Bank data, opening of letters of credit, generally known as actual import orders, also posted a negative growth of 1.99 per cent in the July-April period of the FY16 compared with that of a positive growth of 7.36 per cent during the same period of the FY15.
BB officials told New Age on Thursday that the businesspeople were still maintaining a go-slow policy to opening and settling LCs as they thought that the country’s existing business environment, and law and orders situation were not favorable enough for business expansion.
According to the BB data, the settlement of LCs stood at $33.37 billion in the July-April period of the FY16 against $31.96 billion during the same period a financial year ago. The settlement of LCs was $30.59 billion in the first 10 months of the FY14.
The import of industrial raw materials, the major imported-product, posted a lower growth of 3.64 per cent in the first 10 months of the FY16 compared with that of a 4.16-per cent growth during the same period of the FY15.
The settlement of LCs for the industrial raw materials stood at $13.13 billion in the July-April period of the FY16 against $12.67 billion in the same period of the FY15.
Industrial raw materials are the key ingredients for increasing industrial production, but the slower growth in import of the products indicates that the country’s industrial sector maintained a sluggish trend in recent months, a BB official said.
Settlement of the LCs for petroleum products posted a negative growth of 28.79 per cent in the first 10 months of the FY16 compared with that of a negative growth of 17.75 per cent in the first 10 months of the FY15.
The import payments for the petroleum products stood at $2.09 billion in the July-April period of the FY16 against $2.94 billion in the same period of the FY15.
The BB official said the import growth for the petroleum products showed a negative growth due to lower prices of the products on the global market.
Import payments for rice and wheat declined by 25 per cent to $952 million in 10 months because of imposition of higher duty on rice import and drop in price of wheat on international market.
The BB data, however, showed that the settlement of LCs for capital machinery posted a positive growth of 12.24 per cent in the first 10 months of the FY16 compared with that of a 20.81-per cent growth in the same period a financial year ago.
The import payments for the capital machinery stood at $2.83 billion in the July-April period of the FY16 against $2.52 billion in the same period of the FY15.
The BB official said that there was no logical cause of the increase in the capital machinery import payments in the first 10 months of the FY16 as the business situation in the country remained dull.
The huge import payments for capital machinery raised suspicion of money laundering, he said.
The BB data showed that the country’s overall LC opening stood at $35.11 billion in the July-April period of the FY16 against $35.82 billion in the same period of the FY15.
The country’s import orders and payments are unlikely to pick up in the coming months if the ongoing political uncertainty and bad situation in the law and orders persist, the BB official said.
The businesspeople have been waiting for the last few years to enjoy a stable political situation and, law and orders to expand their investment, he added.