There is a $14.2 billion mismatch in Bangladesh’s export earnings during the July-May period of FY2023-24, shows an analysis of the Balance of Payments (BoP) report which includes data from the Bangladesh Bank (BB) and the Export Promotion Bureau (EPB).
EPB data showed that the country’s overall export earnings were $51.54 billion in these 11 months FY24. However, BoP data showed that the amount for the same period was $37.34 billion.
The central bank released the BoP report on Wednesday.
EPB data showed 2.01 per cent export growth in the first 11 months of FY24, but the BoP data showed 5.9 per cent decline at the same time, compared to the July-May period of FY2022-23.
Analysis of the BoP and EPB data showed that there is also a $10.81 billion mismatch in the readymade garment sector’s export earnings during this period of FY24. EPB data shows that the amount was $43.85 billion while BoP data showed the amount was $33.04 billion.
In the BoP report, BB said that the National Board of Revenue (NBR) revises and provides the export shipment data to BB and EPB by adjusting multiple entries. The central bank is using the new data from April this year.
Using the new data has led to huge mismatches in export earnings, pushing up the country's trade balance deficit sharply since April.
During the July-April period, trade balance was -$18.70 billion, which rose to -$20.22 billion in July-May of FY24. In the July-May period of FY24, import payment was $57.56 billion.
BB in the BoP report said that the export (f.o.b) has been adjusted for exports from EPZ to Bangladesh, CMT (cutting, making and trimming) exports, etc. Besides the import (f.o.b) has been adjusted for freight, goods procured in ports, etc.
CAB and financial account
Meanwhile, due to the export earnings data mismatch, BoP’s current account balance (CAB) has seen deficit and financial account has been positive from April this year.
CAB showed $5.88 billion deficit during the July-April period of FY24 and it increased to $5.98 billion in the July-May period of FY24.
The net trade credit deficit had narrowed during the July-April period of FY24 because the BoP calculation is now based on the revised data of exports, instead of provisional data, in line with the International Monetary Fund’s (IMF) conditions.
The country’s financial account was $2.08 billion positive in the July-April period of FY24. It was $2.306 billion positive in the July-May period of same year.
The net trade credit was $2.17 billion negative during the July-May period. It was $1.66 billion negative in the July-April period of FY24.
The net foreign direct investment (FDI), which is calculated in financial account, saw 3.6 per cent growth to $1.55 billion in the July-May period of FY24, compared year-on-year.
Overall balance
The portfolio investment was $111 million negative. However, such investment by non-resident Bangladeshis (NRBs) was $87 million positive during the July-May period of FY24, compared to the same period of FY23.
Net aid inflow has increased slightly to $4.93 billion during the July-May period of FY24, at a time when the country is facing a persistent USD shortage.
But the foreign loan repayment growth is higher than the borrowing growth. During the July-May period of FY24, Bangladesh received $6.78 billion medium and long-term loans — which was 2.8 per cent higher than figures posted during the same period of FY23.
Against this borrowing, the country repaid $1.84 billion during the July-May period of FY24, a 16 per cent rise from the same period of FY23. The BoP error and omissions show $2.33 billion in July-April of FY24, which was $2.61 billion in the same period of FY23.
The overall balance deficit in BoP was $5.88 billion during the July-May period of FY24. It was $8.80 billion in the same period of FY23.
The overall balance deficit has to be met from the reserves by BB. As a result, the reserves fell to $18.64 billion in July-May of FY24 as per the IMF’s BPM6 method, which was $23.64 billion in the same period of FY23. This amount can meet four months of the country’s import payments.
