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Import expenses exceed $30b mark in H1

Import of intermediate goods on the rise


Siddique Islam | Published: February 05, 2019 09:21:39 | Updated: February 06, 2019 21:07:52


Photo courtesy: ADB

Bangladesh's import expenses exceeded the US$30 billion mark in the first half (H1) of the current financial year (FY), 2018-19, on the back of higher imports of intermediate goods.

The overall imports stood at $30.07 billion during July-December of FY '19, up from $28.44 billion in the same period of the previous fiscal, according to official figures provided by the Customs Department of Bangladesh.

The country's imports grew by nearly 11 per cent in the H1 of FY '19, following a 48.98 per cent increase in the import of mostly construction materials as intermediate goods, the central bank said on the basis of letters of credit (LCs) settlement.

The actual imports in terms of settlement of LCs rose to US$27.32 billion during the first six months of FY '19 from $24.66 billion in the same period of the previous fiscal, according to the central bank's latest data.

"Import of construction materials, particularly scrap vessels, cement, clinker and BP sheet, pushed up the overall import expenses in the H1," a senior official of the Bangladesh Bank (BB) told the FE on Monday.

Also, import of intermediate goods such as coal, hard coke, clinker and scrap vessels etc, surged to $2.85 billion in the July-December period of this fiscal from $1.91 billion in the same period of the previous fiscal.

Different mega infrastructure projects, including Padma Bridge and metro-rail, consumed the lion share of intermediate goods, the central banker explained.

He also expressed the hope that the existing upward trend in the import of intermediate goods might continue in the coming months.

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 implementation.

Talking to the FE, senior bankers and officials said the steady growth of imports may continue in the near future following implementation of different infrastructure projects across the country.

Syed Mahbubur Rahman, chairman of the Association of Bankers, Bangladesh (ABB), told the FE, "Monitoring and supervision should be strengthened to curb the import of 'unnecessary' luxurious items for keeping the country's overall of balance of payments (BoP) situation stable."

The senior banker also said import of capital machinery may increase in the near future following implementation of special economic zones across the country.

Meanwhile, the import of capital machinery or industrial equipment used for production, has dropped by 5.0 per cent to $2.41 billion from $2.53 billion, the BB data showed.

Higher import of petroleum products also pushed up the overall import expenses during the period under review, according to another BB official.

Import of petroleum products rose by 45.66 per cent to $2.03 billion in the first six months of FY '19 from $1.39 billion in the same period of the FY '18.

The BB official also said the upward trend in term of quantity in fuel oil import may continue in the coming months following diversified use of the gasoline products, particularly for power generation.

Currently, around 70 power plants, out of a total of 127 across the country, are running with fuel oil.

Industrial raw material import also rose by 10.56 per cent to $9.60 billion during the period under review from $8.68 billion in the same period of FY '18.

Meanwhile, import of food grains, particularly rice and wheat, dropped by 54.71 per cent to $694.01 million from $1.53 billion in the same period of FY '18.

Import of consumer goods also slumped by 30.35 per cent to $2.67 billion during the period under review from $3.83 billion in the same period of FY '18, the BB data showed.

siddique.islam@gmail.com

 

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