Dhaka, Bangladesh (BBN)- Import orders for capital machinery increased by over 24 per cent in the first five months of the current fiscal, indicating that the country’s overall situation in industrial sector had started improving.
Letters of credit (LCs) worth US$685.18 million were opened to import machinery during July-November period of fiscal 2009-2010 (FY10) against $550.36 million in the same period of the previous fiscal, according to the central bank statistics.
“The data clearly shows that our entrepreneurs are placing higher orders to import capital machinery,” a senior official of the Bangladesh Bank (BB) said on Wednesday.
Most of the import orders for capital machinery were placed from different sectors including textile, readymade garment, pharmaceuticals and packaging industry, the BB official added.
Both the BB officials and experts expect that the upward trend of fresh opening LCs for machinery import might continue in the near future because of recovery of major economies from the global meltdown and restoration of confidence of the country’s business community.
Former BB chief economist and currently director general of the Bangladesh Institute of Development Studies (BIDS) Mustafa K Mujeri forecasts the capitalmachinery imports to rise further from the second-half of this fiscal, as he sees the global economy is showing signs of recovery.
“We expect that local entrepreneurs will move forward to making fresh investment in different sectors as major economics are gradually recovering from the global meltdown,” he said, adding that the overall economic situation may improve further in the January-June period of this fiscal.
However, settlement of LCs, generally known as actual import, for the capital machinery fell by 14.12 per cent to $575.71 million during the period under review from $670.37 million of the corresponding period of the previous fiscal due mainly to the global recession, the BB’s data showed.
Manufacturers said they don’t see any sizable increase in machinery import orders until the economic health of the rich nations improves further and the government removes some key infrastructural bottlenecks.
“The import of capital machinery will pick up as soon as the government ensures adequate gas and power supply to factories,” an industrialist told BBN in Dhaka.
BBN/SS/SI/AD-14January10-10:08 am (BST)