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Dhaka Tribune

Bangladesh’s industrial growth plunges to 4-year low amid import curbs

BBS data reveals a slowdown in factory output growth, with estimates showing a drop to 6.66% for FY24

Update : 26 May 2024, 06:56 PM

The recent decline in imports of capital machinery, raw materials, and intermediate goods has had a significant negative impact on both industrial production and employment levels in Bangladesh.

Data released by the Bangladesh Bureau of Statistics (BBS) last week revealed a slowdown in factory output growth, with estimates showing a drop to 6.66% for FY24.

This is a notable decline from the 8.37% growth recorded last year and a sharp fall from the 9.86% and 10.29% growth rates observed in the two preceding fiscal years.

This has had adverse effects on both industrial production and employment in the country.

According to Bangladesh Bank data, overall imports fell by 15.5% to $49.22 billion in the July-March period of the current fiscal year, compared to $58.27 billion in the equivalent period the year before.

Central bank data show that the import of industrial intermediate goods dropped by 14.2% to $29.66 billion in July-March, down from $34.55 billion a year ago. Intermediate goods are typically used in the production of finished products in industry.

The import of other intermediate goods had decreased by 20.2%.

Clinker imports were worth $715 million in the first nine months of this fiscal year, compared to the previous year's $927 million.

Similarly, imports of oil seeds dropped by 10.1%, followed by chemicals by 7.2%, fertilizer by 47.4%, plastics and rubber by 13.8%, and iron, steel, and other base metals by 8.7%.

Imports of the country's main export item, apparel-related goods, fell by 9.1% year-on-year in the first nine months of FY24.

A breakdown shows that raw cotton imports decreased by 24.9% to $2.58 billion from $3.44 billion a year ago.

Additionally, yarn imports dropped by 10.2%, textiles and articles thereof by 8.2%, staple fibre by 6.1%, and dyeing and tanning materials by 3.1%.

The import situation for capital goods is also quite dire, with inbound shipments falling by 22.5% to $8.07 billion in the period from July to March, compared to $10.41 billion a year ago.

Within this category, the import of capital machinery decreased by 23.7%, dropping to $2.85 billion from $3.73 billion in the same period of the previous fiscal year. Imports of other capital goods fell by 21.8%.

According to the workforce survey data for January-March 2024 published by BBS, the number of unemployed people in the country is 2.59 million, an increase from 2.47 million in December.

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