The export data for July-April period of FY24, compiled separately by the Bangladesh Bank and Export Promotion Bureau (EPB), show a significantly wide $13.8 billion gap.
It should be noted that the central bank had recently begun compiling the data under the BMP-6 method as per International Monetary Fund (IMF) prescription, while the EPB collects provisional data from the National Board of Revenue (NBR).
In May this year, the EPB had announced that Bangladesh secured $47.47 billion in earnings through exports in the July-April period of FY24, with a year-on-year growth of 3.93 per cent.
The figure under the exact same period however dropped to around $33.68 billion when the Bangladesh Bank used the BPM-6 method. This indicates that the EPB may have declared excess export earnings amounting to $13.8 billion.
According to the central bank, the country failed to retain export growth in the July-April period of FY24, and witnessed a 6.8 per cent year-on-year negative growth.
The apparel sector, which makes up the lion’s share of Bangladesh’s export sector, posted $29.68 billion in earnings during the same period, which is 6.7 per cent lower year-on-year.
The EPB, however, declared that the sector earned $40.49 billion with a 4.97 per cent year-on-year growth.
This downturn could not have come at a worse time, as Bangladesh is already navigating through a persistent USD shortage, high inflation, and the apparel sector implemented a new wage structure last December, and minimum wages hike by 56.25 per cent.
Industry insiders and experts said they previously raised questions over EPB’s export information as these do not reflect the real situation. They lauded the BPM6 method for publishing such data.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem said, “We found that the EPB data did not represent reality in December 2022, and I had challenged the information instantly.
“From then, we have doubted any data published by the EPB.”
“Finally, the central bank gets with the programme. It is now proven that the EPB misguided the government, businesses, the nation, as well as the international community by providing misinformation. Those behind such fabricated data must be punished.”
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President (Finance) Md Nasir Uddin said, “There is no way to do a smooth business. We are navigating troubled waters due to harassment by a section of NBR officials, and the countrywide crisis of gas and electricity.
“Customs officials are now charging multiple folds higher as bribes than previous. Since this April, the gas pressure in industrial areas has slipped almost to zero, and we are facing up to 7-8 hours of load-shedding daily. That is why our production capacity is down 60 per cent.”
In an announcement, the central bank said the NBR revises the export data, and provides it to the central bank and EPB by adjusting multiple entries. The central bank compiles this data based on local sales and CMT (cutting, marking and trimming) as per the BPM-6.
An EPB official, on condition of anonymity, however said, “We collect data from the NBR as well, though it is provisional. We mention this in our monthly export data reports.”
Bangladesh has been experiencing a severe forex reserve shortage since the end of 2022.
In order to stabilise the macro-economy, the government is taking a $4.7 billion loan from the International Monetary Fund (IMF) to improve the forex reserves position. The international lender is now playing the role of saviour with a bunch of prescriptions.
Balance of Payments and International Investment Position Manual, IMF Sixth Edition, commonly known as BPM6, is also a key condition by the international lender to calculate Bangladesh’s macroeconomic data.
Although the central bank previously did not disclose the actual figure of exports despite huge controversy, they finally followed the real amount of Bangladesh’s total exports.
Policy Research Institute of Bangladesh (PRI) Executive Director Ahsan H Mansur said, “Cash incentives are linked to export values.
“The government should investigate why there is a big mismatch of export figures between two agencies, and find out whether anyone is benefitting from this. I however believe that this particular issue has no links to money laundering.”
Imports down 12.3%
According to the central bank, the country secured 12.3 per cent to $52.37 billion year-on-year negative growth in imports in the July-April period of FY24. In the same period of FY23, the country imported goods worth $59.74 billion.
When the country fell into the forex crisis, the central bank took a stronger position on imports to keep the reserves healthy. The monetary authority increased the LC (letter of credit) margin for almost all goods by up to 100 per cent, except for essential commodities.
This move is intended to discourage the opening of new LCs for luxury item imports. But the reserve shortage is persistent, and current net reserves stood at $16.77 billion, according to July 2 data from the central bank.
