The import of capital machinery dropped by 27.5 percentage points in the just-concluded fiscal that indicates the country's industrialisation will slow down further in the new fiscal, an expert said.
According to Bangladesh Bank's provisional statistics, letters of credit (LCs) for import of capital machinery worth US$ 1.39 billion (139 crore) were settled in the 2007-08 fiscal against $1.92 billion in the 2006-07 fiscal.
This is the first time since the 1998-99 fiscal that the country has witnessed a negative growth in import of capital machinery after a steady growth in the last one decade, said the statistics.
Bangladesh Institute of Development Studies (BIDS) research director Zaid Bakth said a massive fall in import of capital machinery indicates the country's industrialisation will slow down in the current fiscal.
'A slowdown in industrialisation due to less import of capital machinery can also be noticed in the last fiscal. But its greater impact will be visible in the current fiscal,' he said.
The employment generation opportunities will dwindle that will eventually slow down the economic growth further, he added.
The country's economy grew by 6.21 per cent in the 2007-08 fiscal compared to 6.52 per cent in the 2006-07 fiscal.
The country's overall imports, however, grew by 26.4 per cent as it imported goods worth a record $20.2 billion in the 2007-08 fiscal compared to $15.9 billion in the 2006-07 fiscal.
Zaid Bakth said the reasons behind the higher import growth are the price hike of almost all the commodities in the international markets and the higher import of rice.
Rice worth $840 million was imported in the just-concluded fiscal, which is higher by about $760 million over that of the 2006-07 fiscal.
The country's import bills for fuel oils, fertiliser, raw materials and intermediate goods also increased substantially due to the price hike of the items globally.
He pointed out that the import of goods grew just in its volume, but not in quantity, which indicates a negative growth in the real terms.
'The county had to make higher import payments for the same or less amount of goods compared to that of the previous fiscal,' he said.
Zaid Bakth refuted Finance Adviser Mirza Aziz's observation that the 23 per cent increase in the credit flow to the private sector is a good indicator of the country's economy, by mentioning that entrepreneurs had to pay higher bills on imports.
'The 23 per cent increase in the private sector credit flow in the first 11 months of the concluding fiscal happened due to higher import payments,' he said.
