Dhaka, Bangladesh (BBN)– Bangladesh’s overall import dropped by 2.46 per cent in the first month of the current fiscal year (FY) 2019-20 following announcement of the national budget, officials said.
The settlement of letters of credit (LCs), generally known as actual import, came down to US$ 4.57 billion in July of this fiscal year from $ 4.69 billion during the same period of the previous fiscal, according to the central bank’s latest statistics.
Import normally falls after announcement of the national budget in June each year, they added.
“Most of the businessmen usually maintained a ‘go-slow’ policy in the months of May and June mainly due to the national budget,” a senior official of the Bangladesh Bank (BB), the country’s central bank, explained.
The central banker expects that overall import may pick up in the coming months to meet the growing demands for construction materials for implementation of the ongoing projects particularly mega infrastructure projects across the country.
“Overall import may grow moderately in the coming months of the FY’20,” Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh (ABB), said while predicating the possible import trend of this fiscal.
Mr. Rahman, also managing director and chief executive officer of Dhaka Bank Limited, said overall import fell during the period under review due to lower growth of the private sector credit in recent months.
However, import of petroleum products dropped over 62 per cent to $186.75 million in July from $492.96 million a year ago, the BB data showed.
“It’s a seasonal impact,” another BB official said, adding that fuel oils import has already rebounded in the month of August 2019.
The rising trend in petroleum product import may continue in the coming months, according to the central banker.
Import of capital machinery—industrial equipment used for production—was down by nearly 21 per cent to $ 323.75 million during the period under review as against $ 408.68 million of the previous fiscal.
On the other hand, import of industrial raw materials fell by over 6.0 per cent to $1.57 billion in the first month of FY’20 from $1.67 billion in the same period of the FY’19.
The import of industrial spares and accessories dropped by more than 4.0 per cent to $478.22 million in the first month of the FY ’20 from $ 499.23 million during the same month of the previous fiscal.
Meanwhile, import of intermediate goods such as coal, hard coke, clinker and scrap vessels etc grew by over 10 per cent to $398.94 million in July from $361.41 million a year ago for implementation of different mega infrastructure projects.
The mega infrastructure projects, including Padma Bridge, Dhaka Metro Rail and Dhaka Elevated Expressway, are consuming the lion’s share of intermediate goods, according to the BB officials.
They also predicted that the existing rising trend in construction materials along with fuel oils imports may continue this fiscal.
Imports of consumer goods also jumped by more than 32 per cent to $682.20 million in July of the FY’20 from $ 515.48 million in the same period of the previous fiscal.
However, imports of food-grains, particularly rice and wheat, dropped by 40.23 per cent to $ 93.47 million from $156.37 million.
On the other hand, opening of fresh LCs, generally known as import orders, decreased by 7.43 per cent to $4.69 million in the first month of the FY’20 from $5.06 billion during the same period of the FY’19.