Rise in import of consumer goods to spell trouble for low income: UO

Staff Correspondent | Published: 23:58, Nov 04,2017


Unnayan Onneshan, a local think tank, feared that the recent rise in import of consumer goods including rice might increase hitches of low income people whose living standard already deteriorated due to frequent price hikes in the commodity market.
The UO, in its monthly economic update projected that food inflation might stand at 9.4 per cent at the end of the current fiscal year as immediate measures for keeping the prices stable is absent.
‘Such increase in price in the commodity market coupled with reduced production of food grains, decline in real wage, and lack of employment opportunities is likely to adversely affect people’s standard of living on the one hand and threaten overall food security in the country on the other,’ the report read.
The UO report showed that during the period of July-August, 2017, fresh opening, settlement and outstanding of Letter of Credits increased by 74.27 per cent, 77.14 per cent and 41.32 per cent respectively compared to the corresponding period of the previous year.
The report said that in view of the target of export earnings of $2.78 billion for September 2017, the actual earnings fell short by 26.72 per cent, signalling the continuation of failure in mobilising revenue at the end of the fiscal year.
It also apprehended that non-diversification of export markets and lack of export competitive products might pose serious challenge to the performance of external sector.
The think tank showed that the remittance inflow in September 2017 stood at $853.73 million which declined by 39.82 per cent against August 2017 and 19.20 per cent against September 2016.
On yearly basis, the inflow of remittance declined by 14.48 per cent to $12.76 billion in FY 2016-17 compared to the previous fiscal year.
The UO thought that decline in the remittance inflow coupled with recent inflationary pressure might upset the rural economy since the remittance-recipient households in rural areas expend a significant portion of their income on consumption, health and education.
The current account balance during July-August of 2017 exhibited a deficit of $451 million compared to a surplus of $812 million during the corresponding months of 2016 due to decline in the remittance inflow and export growth, rise in import payables along with shortfall in the primary income and income from the service sector, according to the report.
It also showed that the total balance of payment in July-August of FY 2017-18 experienced a deficit of $206 million compared to a surplus of $1.17 billion in the corresponding period of FY 2016-17.

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