Import rebound still remains elusive as a double-digit contraction was recorded in five months of this fiscal with consumer goods accounting for the deepest dip by nearly 27 per cent.
Economists feel such import fall, evidently following belt-tightening amid dollar dearth, casts further impacts on market and economic situations.
Such import contraction creates a double bind--it stokes consumer-price inflation and may lead to industrial-production deflation for want of raw material and machinery.
Official statistics show the country's import volume fell over 14 per cent during the July-November period year on year to US$27.5 billion in terms of the opening of letter of credits. During the same period a year before it was $32 billion.
This drop is mainly due to import compression as the Bangladesh Bank has been discouraging import, especially of luxury goods.
Economists and businesspeople say lower-than-necessary imports have downstream economic implications as the supply chains get into volatility for want of adequate supplies, as is evident from what is dubbed 'price anarchy' prevailing in markets.
Supply of consumer goods like cereals, edible oils and so took a knock as the import category recorded a fall of 27 per cent to $2.6 billion year on year in July-November 2023 according to LC-opening data.
The import of capital goods also plunged, by nearly 17 per cent to $969 million, with its implications on production chain as well as domino effect on the market.
The LC opening for intermediate goods also dropped nearly 17 per cent to $1.9 billion during the period, which may affect industrial production.
Another squeeze on economic activity comes from fuel front -- petroleum imports registered a fall by over 7.0 per cent to $4.0 billion during the period under review over its corresponding period a year earlier.
And industrial raw-material imports declined by 11.62 per cent to approximately $9.2 billion.
Import in the 'others' category dropped by 13.6 per cent to $8.7 billion.
Bangladesh mainly makes cash import, accounting for around 60 per cent of the turnover. Import on buyer credit, loans and grants as well as IDB loan also takes place.
Economists and manufacturers find two main reasons behind the sharp fall in imports. Dollar shortage is one as the banks are unwilling to open LCs. They also identified higher inflation, which helps trim import of some luxury goods, and upcoming general election as the reasons.
Dr Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh (PRI), attributes dollar shortage to the downturn in capital-machinery imports.
"The number-one reason is dollar shortage," he says, explaining the crunch situation.
The implication of this is that the productive capacity of the economy will not increase, and it may hit the GDP.
"Foreign-exchange reserves remained under pressure. The dollar-market volatility is the key reason as many banks are not willing to open LCs against imports," Dr Mansur says.
Chairman and CEO of Policy Exchange of Bangladesh Dr M Masrur Reaz terms continuous fall in imports "good" when the balance-of-payments situation is considered.
"But the overall BoP situation is not good as its current-account surplus shrank during July-October period."
The economist notes that the global commodity market is favourable as prices over there have eased. Bangladesh is failing to make import because of dollar.
He says the import compression on the other hand is impacting the revenue collection.
Anwar-Ul Alam Chowdhury Pervez, managing director of a leading textile corporate -- Evince Group -- told the FE that the main reason for drop in imports is dollar crisis.
"Banks are not showing interest in LC opening," says the leading businessman.
jasimharoon@yahoo.com