High volume of construction material import main factor
Siddique Islam
The overall import for industrial sector grew by over 10 per cent in the first quarter (Q1) of this fiscal year (FY), 2018-19, following a 21.31 per cent increase in import of construction materials as intermediate goods, officials said.
The actual import for the sector in terms of settlement of letters of credit (LCs) rose to US$9.67 billion in the July-September period of FY 19 from $8.77 billion in the same period of the previous fiscal, according to the central bank' latest report.
On the other hand, opening of LCs, generally known as import orders, increased by 11.78 per cent to $11.03 billion in the period under review from $9.87 billion in the same period of FY 18.
"Import of construction materials, particularly scrap vessels, cement, clinker and BP sheet, increased significantly in Q1 of FY 19 for implementation of different mega infrastructure projects," a senior official of the Bangladesh Bank (BB) told the FE.
He also said the ongoing execution of Padma Bridge and metro-rail projects consumed the lion share of intermediate goods.
"We expect that the existing upward trend in import of intermediate goods might continue in the near future also," the central banker added.
Currently, the government is implementing ten prioritised projects under the supervision of a Fast Track Project Monitoring Committee, headed by Prime Minister Sheikh Hasina, for ensuring their quick execution.
Import of machinery or equipment for building many flyovers as well as for balancing, modernisation, rehabilitation and expansion (BMRE) of a number of industrial units, particularly in apparel sector, has also contributed to the rising trend of industrial import, he explained.
However, the import of industrial raw materials for industries rose by 11.44 per cent to $4.70 billion in Q1 of this fiscal from $4.21 billion in the same period of the previous fiscal.
The central banker hoped that the higher import of industrial raw materials will help boost productivity in near future.
In Q1 of FY 19, the import of machinery for miscellaneous industries witnessed an 8.81 per cent growth to $1.33 billion compared to $1.22 billion in the same period of the previous fiscal.
Talking to the FE, another BB official said government purchases, including machinery for different power plants through state-owned commercial banks, have also been included in the import for industrial sector.
On the other hand, import of capital machinery or industrial equipment used for production, dropped by 3.39 per cent to $1.24 billion in the July-September period of FY 19 ahead of the general polls from $1.29 billion in Q1 of FY 18.
The declining trend in capital machinery import may continue until the new government comes in power, the central banker opined.
Businessmen are maintaining a 'go-slow' policy for setting up new industrial units or for BMRE of the old units ahead of the national election to avoid possible risks, he added.
