Industrial imports increased by more than 26 per cent or US$1.54 billion in the first two months of the current fiscal year (FY) mainly due to a surge in capital machinery imports, officials said.
The actual imports in terms of settlement of letters of credit (LCs) rose to $7.38 billion during the July-August period of FY 2017-18 from $5.84 in the same period of the previous fiscal, according to the central bank's latest report.
On the other hand, opening of LCs, generally known as import orders, jumped 57.45 per cent to $8.33 billion in the period from $5.29 billion in the same period of FY 2016-17.
Imports of capital machinery or industrial equipment used for production went up by 37.88 per cent to $1.89 billion in the first two months of the FY18 as against $1.37 billion in the July-August period of the previous fiscal year.
"Higher imports registered in textile, garment, pharmaceutical, telecom and, energy and power sectors," a senior official of Bangladesh Bank (BB) told the FE.
He said that the imports increased substantially with the setting up of power plants and implementation of different infrastructure projects, including Padma Bridge.
The imports of industrial raw materials and machinery for industries also recorded a healthy growth during the period, indicating that the economic growth would accelerate further due to increased productivity, the central banker added.
Imports of intermediate goods like coal, hard coke, clinker and scrap vessels have increased by15.88 per cent to $625.18 million during the period from $539.49 million in the same period of the previous fiscal.
On the other hand, imports of industrial raw materials increased by 19.26 per cent to $3.05 billion during the period from $2.56 billion in the same period previous fiscal year.
Talking to the FE, another BB official said the machinery or equipment for building flyovers and for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units, particularly apparel factories, also helped increase the industrial imports.
Meanwhile, the import of machinery for miscellaneous industries witnessed a 14.95 per cent growth to $998 million as compared to $868 million in the same period of the previous fiscal.
"Different government purchases, including machinery for power plants through state-owned commercial banks, have also been included in the imports for industrial sectors," the BB official said, replying to a query.
He said the overall industrial imports might increase further in the coming months due to implementation of different infrastructure development projects across the country.
Currently, the government is implementing nine projects under a Fast-Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina.
Echoing the BB official, Abdus Salam Murshedy, managing director of Envoy Group, said the ongoing remediation, relocation and expansion activities in the country's apparel and clothing sector pushed up the overall industrial imports during the period under review.
"Some apparel industries are now going for automation for improving their productivity, contributing to boost industrial imports," said Mr Murshedy, also the president of the Bangladesh Exporters Association.
A senior banker, however, said the entrepreneurs were taking advantage of lower borrowing rates and setting up new industrial units or expending the existing ones.
"Most of the banks are now offering lower interest rates on loans to their best performing clients for reduction of their cost of funds with using the excess liquidity," said the private banker.
The weighted average interest rates on lending came down to 9.46 per cent in August 2017 from 10.24 per cent a year before, the BB data showed.
The banker also expected that the existing upward trend of the country's overall imports might continue in the coming months if the rising trend in food grains along with capital machinery imports persists.
The country's overall imports grew by more than 31 per cent during the July-August period of the FY 18 mainly due to higher import of food grains and capital machinery.
The actual import in terms of settlement of LC rose to $9.42 billion in the first two months of this FY. The figure was $7.16 billion in the same period of the previous fiscal.
On the other hand, the opening of LCs increased by 54.16 per cent to $11.25 billion during the July-August period of the FY 18 from $7.30 billion in the same period previous fiscal year.
