Dhaka, Aug 26 (Representative ) Bangladesh recorded a second consecutive fiscal year of decreased imports of capital machinery, industrial raw materials, and intermediate goods, indicating a decline in private investment and a lack of new job opportunities, media reports said. Data from the Bangladesh Bank on the settlement of letters of credit (LCs) shows that imports of capital machinery, a key indicator of investment, dipped 24 percent year-on-year to $2.66 billion in FY24, which ended in June, the Daily Star reported. In the preceding fiscal year, capital machinery imports plunged by 34 percent. According to reports, the decline is a consequence of persistent US dollar shortages and increased import costs due to the devaluation of the local currency. “The decline in imports of capital machinery shows a clear path of degrowth in investment in the industrial sector, which will adversely affect employment generation,” said Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD). The data shows that investors are not interested in financing new industries or expanding existing manufacturing units, he said.
According to media reports, the central bank reported a 16% decrease in industrial raw material imports to $21.75 billion in FY24, primarily due to falling exports and slowing domestic demand amid rising inflation. The value of imported industrial raw materials dropped by 13 percent in the preceding fiscal year, the report said. Moazzem added that global demand for products exported by Bangladesh has fallen. At the same time, domestic demand has declined significantly, which is why investors do not want to take risks. “So, the contribution of the industrial sector to the country’s gross domestic product (GDP) will decline for a long time,” he said. The country’s economy has faced several challenging years in recent times due to various factors. Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said the reduction in capital machinery imports occurred as import restrictions were put in place due to the scarcity of the greenback. He attributed increases in the price of US dollars as another reason. “It reflects how much private investment declined during the past two years,” he said, adding that there was a negative impact on private sector investment while private sector credit growth slowed significantly.