Local think-tank Unnayan Onneshan on Saturday said that the decrease in surplus of current account would create pressure on the country’s balance of payments.
In the September issue of its monthly economic updates the UO said decline in import and import of capital machinery indicated that there was lack of entrepreneurship and productive capacity expansion.
‘Current unemployment in manufacturing sector along with declining import of capital machinery may cause the rate of growth in gross domestic product to decelerate in the current fiscal year,’ it said.
The current account balance declined by 35.22 per cent to $1,547 million in the financial year 2013-14 compared with $2,388 million in the FY13.
‘Meanwhile, the total import declined by 11.36 per cent and stood at $2,770 million in July of the FY15 compared to $3,125 million in the corresponding month of the FY14,’ it said.
The import of capital machinery reached $2,005 million in the FY12 and then came down to $1,835 million in the FY13 and stood at $1,392 million during July-January of the FY14, the think-tank said.
The UO said that the declining rate of growth in remittance inflow was creating adverse impact on the rural economy as consumption and expenditure of rural households were largely contingent upon remittance sent by their members living abroad.
The growth of remittance inflow declined by 1.61 per cent to $14,228.24 million in the FY14 compared to $1,4461.15 million in the FY13, it said.
In addition, the number of expatriates has also been on the decrease since the FY12 as the total number of expatriates stood at 6,91,000 in the FY12, whereas the number declined to 4,41,000 in the FY13 and stood at 2,64,000 in the first eight months of the FY14, the think-tank said.
‘Lax diplomatic initiatives, administrative complexity and irregularities in manpower recruiting agencies are the key reasons for such decline,’ said the UO.
It said that foreign direct investment also decreased to $1,550 million in the FY14 from $1,726 million in the FY13.
‘Inadequate inflows of FDI in Bangladesh in comparison with other countries of same economic characteristics can largely be ascribed to the lack of infrastructural facilities and recent political uncertainties in the country,’ the research organisation said.
-With New Age input