Capital machinery import surges 81% in six months

In the first six months of the current fiscal year, import of capital machinery has increased by 81 percent year on year amid Covid-19 pandemic.

According to the central bank data, during July-December period, machines worth $2.76 billion have been imported in the country as against $1.52 billion import during the corresponding period of the earlier fiscal.

Industry insiders think this import growth of heavy machinery indicates that the country gets back the momentum of pre-pandemic industrialisation.

“As the pandemic regulations were relaxed, machinery imports grew substantially. Besides, the government has set a target to export $80 billion from various economic zones by 2024. So, if the situation gets normal, import of heavy machines will go up,” Rizwan Rahman, President of Dhaka Chamber of Commerce and Industry (DCCI), told the Business Insider Bangladesh on Sunday.

However, he sees better prospects for Bangladesh export trade as overseas economies like the US and the European Union are now set to reopen.

“This is a very good sign that the economy of the country is recovering gradually. Increase of capital machinery import indicates that the investment is growing in the country, consequently, industrialisation. And most importantly, our employment opportunities will be swelling up,” Dr Ahsan H Mansur, Executive Director of the Policy Research Institute of Bangladesh, told the Business Insider Bangladesh.

He, however, warned that the government has to be extremely cautious about the money heists in the pretext of paying import bills. The dishonest businesses drain the money taking the advantage of high cost goods import.

Mansur said checking such manipulation is very difficult but the government should do it sincerely as there are a number of mega projects going on and dozens are on the pipeline. So there is a huge chance to siphon off money.

However, a big fall was registered in the FY 2020 when the machinery imports plunged by nearly 34 percent year on year to $3.58 billion. The pandemic was responsible for this, experts said. But the capital machinery had reached 5.46 billion in FY 2018, the highest in recent years.

In 2017 fiscal year imports stood at $4.85 billion, in 2018, $5.16 billion, in ’19 $4.75 billion and in ’21 $4.33 billion, respectively.

When the pandemic started affecting investment and businesses in the last quarter of FY 2020, many struggled hard to continue production and dropped their planned industry expansion.

To achieve the target of 7 to 8 percent GDP, investment and industrialisation should be materialised according to the plan, believe the experts.