Dollar shortage affecting raw materials import for industrial production

01 January 2023

Record export earnings and increase in remittance inflow have even failed to bring stability to the country's macro-economy. Economists and businesses said imports of goods are still being hampered due to dollar shortage as the entrepreneurs could not bring necessary raw materials from abroad due to letter of credit (LCs) complications, which is affecting industrial production.
The prices of essential commodities, especially non-food items, are still on the rise due to a supply crunch in the local market amid the slowed economy caused by the Russia-Ukraine war. Although, government agencies have taken various initiatives to keep the prices stable, the sufferings of the common people are yet to be decreased.
The country's export earnings, based on readymade garment shipment, achieved a milestone of $5 billion in November. According to the Export Promotion Bureau (EPB) data, the overall export earnings were $5.09 billion in the last month. In the history of Bangladesh, such a large amount of export income has never come in a single month. On the other hand, remittance inflow increased to $1.59 billion in November compared with that $1.55 billion in the same month in the past year.
Despite this, the manufacturers are worried about increasing production due to the shortage of raw materials and the energy crisis. Even, many factories have been shut down in recent times. Recently, the businesses have expressed their concern over LC complications at a meeting of the advisory committee of the Commerce Ministry. Requesting the government to resolve the LC complications in order to keep the supply of consumer goods normal in the coming Ramadan, businesses said that the import of consumer goods will be hampered if the crisis is not resolved.
LCs cannot be suspended randomly on the excuse of money laundering. Those who launder money should be identified and punished. Despite the increase in investment and employment, the expected production and sales activities could not be achieved.

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