Fears more price hike
Zarif Mahmud: Dollar crisis was seen in the country since the beginning of last year. To deal with it, the government and Bangladesh Bank imposed restrictions on imports from the beginning of the last financial year. LC opening of various products is regulated. There was no immediate impact on imports. In this, the import growth was positive from July to September of the last financial year. It was a downward trend though.
The direct impact of import restrictions started mainly from October last year. Import growth turned negative that month. Since then, the growth of imports could not return to a positive trend. Imports have been experiencing negative growth for 12 consecutive months till September this year.
According to the data of Bangladesh Bank, the import amount in the first month of the fiscal year 2022-23 was $6.338 billion, which is 23.28 percent more than the previous fiscal year (2021-22).
In the first month of that year, $5.141 billion worth of goods were imported. In the next two months, August and September, import growth gradually declined.
Among them, the import growth in August was 11.96 percent and in September 2.86 percent. Imports in those two months were $7.375 billion and $7.192 billion respectively.
In October of the last financial year, the growth in imports was 6.41 percent negative. According to the report, imports in October 2021-22 were worth $7.111 billion. It decreased by $6.655 billion during the same period of last financial year. Accordingly, imports decreased by $456 million. The negative trend of import growth eased slightly in November last fiscal year. Imports in that month amounted to $7.592 billion, which is $263 million or 3.35 percent less than the same period of the previous fiscal year.
Negative growth in imports reached double digits since December. Imports in the country in that month were $6.043 billion, which is $2.394 billion or 28.37 percent less than the same period of the previous year. In December 2021-22, the goods were imported worth $8.437 billion.
The third quarter of the last fiscal saw the highest negative streak in import growth. Imports fell the most in that quarter. It was mainly at that time that the dollar crisis became apparent. Bangladesh Bank initiates various supervision in LC opening. The central bank also rejected several LC applications.
According to Bangladesh Bank, imports in January, February and March were $6.372 billion, $4.624 billion and $6.085 billion respectively. Compared to the same period of the fiscal year in that month, the negative growth is less by 23.48 percent, 44.45 percent and 21.23 percent respectively. In the third quarter (January-March) of the financial year 2021-22, imports were $8.327 billion, $8.325 billion and $7.725 billion respectively.
It is known that the import growth was negative at the end of the last financial year due to non-normalization of dollar supply and negligence of banks in opening LCs. According to the data of Bangladesh Bank, last April imported goods worth $5.226 billion; which is $2.496 billion or 32.32 percent less than the same period of the previous year. In April of that fiscal year, the import was $7.721 billion.
In the next two months (May and June), the import growth decreased to 11.15 percent and 33.52 percent respectively. Imports in those two months were $6.465 billion and $5.097 billion respectively. Imports during the same period of the previous financial year were $7.276 billion and $7.666 billion respectively.
The total import of goods in the outgoing fiscal year was $75.062 billion, which is $14.101 billion or 15.81 percent less than the previous fiscal year. Imports for the fiscal year 2021-22 were $89.162 billion.
Meanwhile, even after a year and a half, the government and Bangladesh Bank could not bring the dollar crisis under control. The steps taken for this have also failed. This has deepened the crisis, due to which the import growth has been negative even in the first quarter of the current financial year.
According to the data of Bangladesh Bank, in the first month of the current financial year, imports decreased by about $1 billion or 15.04 percent. Imports in July of FY 2023-24 were $5.385 billion, compared to $6.338 billion in the same period of the previous fiscal year. Imports in the following month (August) were $5.248 billion, which is $2.128 billion or 28.85 percent less than the same period of the previous year. In August of the last financial year, the goods were imported worth $7.375 billion. And last September, the import of goods was $5.277 billion, which is $1.915 billion or 26.62 percent less than the same period of the previous year.
The total import in the first three months of the current financial year (July-September) was $15.909 billion, which was $20.905 billion in the same period of the last financial year. In other words, imports decreased by $4.996 billion or 23.90 percent in three months.
Businessmen said that after the start of the Russia-Ukraine war, the prices of food products and fuel increased in the world market. If the cost of importing these products increases abnormally, dollar crisis occurs. On the other hand, production in the country continues to be hampered due to gas and electricity crisis. Again, the government-imposed strictures on opening LCs.
On the other hand, when inflation increases in different countries of the world, the demand for export products decreases. From this year, various countries started coming out of inflation and other crises. However, the dollar crisis in Bangladesh is not going away. There is no worry about the supply of gas and electricity. Inflation is stuck around 10 percent. All in all, sustaining a business has become difficult for many.
When asked, Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatim said that there is no business expansion in the current situation. Because production is being disrupted due to gas crisis. Due to reduced demand in the global market, purchase orders have decreased. The capacity of production is not being used. As a result, imports of both capital equipment and raw materials have decreased. Because of this, exports will suffer in the future. There will not be new employment, rather employment will decrease as a result of factory closures. All in all, the economy is headed for a major crisis.
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