Bangladesh's imports of capital equipment have kept declining as banks have been hesitant about financing acquisitions in light of the currency crisis and business owners have been reluctant to grow because of sluggish domestic and export sales.
According to
Export import data of Bangladesh, in the first three quarters of the current fiscal year of 2022–23, the opening of letters of credit (LCs) to import capital machinery fell by about 56% year over year to $2.29 billion.
Between July and March, LC settlement fell by 15% to $3.13 billion. In terms of LC openings, the textile, packaging, and apparel industries suffered the most, followed by the jute and pharmaceutical sectors.
This trend, according to two analysts, indicates that industry investment is slowing, which is not good news for the economy because more jobs must be created and the economy needs to increase its productive capacity to grow more quickly.
Other than these significant businesses, which make up the majority of the nation's export revenues, LC opening and settlement for other industries fell by 53% and 23%, respectively, in the first nine months of FY23.
The imports of intermediate goods and industrial raw materials also decreased. According to Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association, "the trend of LC opening and settlement declined primarily because of an abnormal hike in energy prices, the decline in export orders for clothing items, and the abnormal rise in the US dollar exchange rate due to the volatility in the economy."
According to figures from the BB, the currency reserves were $31.17 billion on April 12, down roughly 30% from $44.27 billion on the same day last year.
Rahman recommended that the government give priority to initiatives that will promote private investment, take steps to lower business costs, and enact fiscal measures in the upcoming fiscal year to encourage exports and investments.
