Bangladesh's industrial production hits 4-year low: Reports

Data from the Bangladesh Bureau of Statistics (BBS) revealed that factory output growth slowed to 6.66 per cent for FY24, down from 8.37 per cent last year, and sharply lower than the 9.86 per cent and 10.29 per cent growth rates of the earlier two fiscal years.

According to Bangladesh Bank, overall imports fell by 15.5 per cent to $49.22 billion in the July-March period of the current fiscal year, compared to $58.27 billion in the same period the previous year.

Ahsan H Mansur, executive director of the Policy Research Institute, explained that despite falling global prices, Bangladesh struggles to finance imports due to a dollar crisis and pressures to maintain foreign exchange reserves and pay dues.

This has led to reduced production, stagnant investment, and slower overall growth.

Mansur, a former IMF economist, emphasised that increasing foreign exchange inflows through exports, remittances, and budget support is crucial even as he noted that without stable dollar exchange rates and positive financial accounts, investment stagnation will deteriorate, worsening unemployment and economic frustration.

Meanwhile, data underlined a 14.2 per cent drop in the import of industrial intermediate goods to $29.66 billion in July-March, down from $34.55 billion the previous year. The import of other intermediate goods decreased by 20.2 per cent even as clinker imports fell to $715 million from $927 million, oil seeds dropped by 10.1 per cent, chemicals by 7.2 per cent, fertiliser by 47.4 per cent, plastics, and rubber by 13.8 per cent, and iron, steel, and other base metals by 8.7 per cent.

Imports of apparel-related goods, Bangladesh’s main export item, fell by 9.1 per cent year-on-year in the first nine months of FY24 even s raw cotton imports decreased by 24.9 per cent, yarn by 10.2 per cent, textiles by 8.2 per cent, staple fibre by 6.1 per cent, and dyeing materials by 3.1 per cent.

Meanwhile, Jahangir Alamin, former president of the Bangladesh Textile Mills Association (BTMA), attributed the low import of raw cotton and yarn to inconsistent electricity and gas supplies, which reduced production.

He also noted that many factories had existing stocks, leading to decreased imports.

Capital goods imports also saw a decline, with shipments falling by 22.5 per cent to $8.07 billion from July to March, compared to $10.41 billion the previous year.

Within this category, capital machinery imports dropped by 23.7 per cent.

The import decrease has negatively impacted investment, production capacity, employment, and GDP growth even if according to the BBS workforce survey for January-March 2024, the number of unemployed people in the country also rose to 2.59 million from 2.47 million in December.

Fibre2Fashion News Desk (DR)