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Tuesday, September 3, 2013

Negative import growth after 10 years!

Bangladesh experienced negative import growth of 4.4% in FY2013 after 10 long years!

Reasons:
(i) Large negative import growth of food grains and major consumer products like edible oil and sugar.
(ii) Import bills declined for capital goods, and fertilizer.

Implications:
(i) Current account surplus widens, refers to positive impact of balance of payment surplus.
(ii) Probably, this is the basic reason why foreign exchange reserves have been rising fast, and thus appreciation pressure on Taka.
(iii) As everyone knows, lower capital machinery imports signal transitory and gloomy investment picture, probably related with the upcoming election.

Report on the issue.   

2 comments:

  1. Will a stronger Taka dampen inward remittances?

    ReplyDelete
    Replies
    1. Well, if weaker Taka encourages remittance earners to send more money to the country, then the opposite should be true as well. My personal experience tells at least that.

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