Energy machinery boosts spending

Dhaka,  Fri,  22 September 2017
Published : 15 May 2017, 00:14:01
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Energy machinery boosts spending

Imports rise 11pc in July-Mar
Siddique Islam


The country's import expenditure increased by more than 11 per cent or US$ 3.41 billion in the first nine months of the current fiscal year (FY).

The import of capital machinery jumped nearly 53 per cent during the period, contributing to the substantial rise in overall imports, officials said.

But the capital machinery for the energy and power sector contributed most part of the expenditure, they added.

A senior central bank official said machinery for other sectors and intermediate goods for industrial consumption also increased substantially, showing signs of boosting production in the country in future.

The expenditure calculated on the settlement of letters of credit (LCs) rose to $ 33.63 billion during the July-March period of the FY 2016-17 from $ 30.22 billion of the same period last FY, according to the central bank statistics released Sunday.

The import orders, as reflected by in LC opening figures for the period, also rose by 13 per cent to $ 35.67 billion in the first nine months of FY 2017 from $ 31.56 billion during the corresponding period of the last FY.

The imports might increase further, as soon as the April figures would be made available, due to increased imports of Ramadan essentials, said the official.

However, the import of capital machinery or industrial equipment used for productions rose to $3.83 billion in the July-March period of this FY against $ 2.51 billion of the same period of FY'16.

The upward trend in capital machinery import might continue in the coming months due to implementation of different ongoing infrastructure development projects in the country, said the central banker.

He further said the higher import particularly for the energy and power sectors mainly contributed to rise in overall capital machinery imports.

During the period, the import of capital machinery for power and energy sectors jumped by more than 220 per cent to $ 1.20 billion from $ 376.04 million in the same period of the FY'16.

The capital machinery imports for other sectors like apparel and clothing, pharmaceuticals, food processing and ship building also increased substantially during the period, the BB official added.

Meanwhile, World Bank's lead economist in Dhaka office Dr Zahid Hussain raised question about the utilisation of the imported capital machinery in the manufacturing sector.

"There was 64.8 per cent growth in capital machinery import between July and January period of the FY'17. But there are questions whether all of those are utilised for manufacturing purpose," Dr. Hussain told a press briefing, releasing the WB's Bangladesh Development Update report in Dhaka Sunday.

He expressed doubt whether there were cases of "over-invoicing" in the name of capital machinery import and whether the country's investment was really boosting, it needed to look into.

Meanwhile, the import of intermediate goods like coal, hard coke, clinker and scrap vessels increased by 13.22 per cent to $ 2.83 billion in the first nine months of this FY from $ 2.50 billion during the same period of the FY'16.

Import of industrial raw materials grew by 2.90 per cent to $12.19 billion during the period from $ 11.85 billion during the same period of the FY'16.

During the period, import of machinery for miscellaneous industries witnessed an 8.28 per cent growth to $3.44 billion from $ 3.17 billion of the same period of the previous FY.

However, import of petroleum products dropped by 1.74 per cent to $1.89 billion during the July-March period of FY 17 from $ 1.93 billion in the same period of the previous FY.

"Lower prices of petroleum products in the global market have contributed to easing import payment pressure on the economy," another BB official explained.

Import of consumer goods increased by 9.48 per cent to $ 3.82 billion in the first nine months of this fiscal from $3.49 billion during the same period of the FY'16, the BB data showed.

Food grain imports, particularly of rice and wheat, increased by 4.87 per cent to $ 913.13 million during the period of the FY'17 from $870 million during the same period of the previous fiscal.

    siddique.islam@gmail.com
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