Import expenditure saw a drastic fall of 62 percent year-on-year, in April, as business activities remained closed during the Covid-19 shutdown.
Bangladesh spent $1.9 billion for import purposes in terms of Letters of Credit (LC) settlement in April – which was $5 billion in the same period last year.
The nosedive in import expenditure shows that exports will remain down in the coming months, which will ultimately hit the government's revenue, said industry experts.
The LC opening figures show that import expenditure will further worsen in the coming months.
In April this year, LC opening dropped by 70 percent, compared to the same period last year, according to the Bangladesh Bank data released on Sunday.
Cancelled garment industry orders primarily account for the slump in import expenditure, said a senior executive of a private bank.
Export earnings declined by 83 percent in April, according to the central bank's data.
As export earnings continue to slump, a slowdown in import expenditure will give the Bangladesh Bank some breathing space to manage the balance of payment, the banker said.
Global Data has recently made a forecast that Covid-19 will wipe $297 billion from the global apparel market in 2020 – a 15.2-percent decline as compared to 2019.
"Given that the apparel industry's global market size is of about $2 trillion, a loss of about $300 billion is very logical," says Dr Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
The Bangladesh apparel industry will face a drying-up of orders in the next three months, except for June, he said, adding that exporters may have some orders for June but there will be a gap for two months – July and August.
Apparel exports may reach 60 percent of last year's export earnings, the economist predicted.
Due to the effects of Covid-19, some small and medium factories will be out of business while many other factories will have to change their business models for their survival, he further said.
He assumed that the fall in export earnings will reduce import pressures. At the same time, a fall in oil prices on the global market will also reduce import expenditures in the coming days.