The central bank discovered six types of statistical errors that boosted export numbers, resulting in a multibillion-dollar fix.
Anomalies include serial duplication problems, fabric value miscalculations, and recurrent miscounts of sample items as exports.
Bangladesh Bank wrote a note to Government agencies explaining the reason for the revision. The paper obtained by local media provides alarming peeks into the magnitude of data mistakes, which have major economic ramifications.
Several media sites reported on the discrepancies last year, but the central bank’s large correction in a balance of payments bulletin on 3rd July surprised economists and industry leaders.
To eliminate the anomalies, the central bank obtained export data from scheduled banks in the July-September period last year and verified them against statistics provided by the National Board of Revenue.
Bangladesh Bank found multiple entries, equivalent to 20 per cent of the total dataset. The ratio of multiple entries to total exports in the previous months was 14 per cent.
“So, the dataset did not give a true picture of the country’s exports,” the central bank concluded, explaining why it corrected data in the BoP for the July-April period.
According to the document, both the NBR and the Export Promotion Bureau (EPB) mismanaged export data. The statistics correction, while essential, raised concerns about the country’s economic success and the policies that surrounded it.
According to the central bank, actual exports during the July-April period of fiscal 2023-24 were roughly US $ 14 billion lower than the shipment value of items previously announced by the EPB. The disparity in export data has existed for at least 12 years, with the gap reaching US $ 12 billion in fiscal 2022-23.
The BB stated that numerous entries of goods by customs personnel at the NBR were the primary cause.
In the case of garment orders under a manufacturing process known as cutting, making and trimming (CMT), the Export Promotion Bureau calculated the prices of fabrics and all accessories, although it was supposed to take into account the making charge only. That was another reason behind inflated data.
On many occasions, sample items shipped abroad for buyers were counted as exports, which means a specific value was assigned to those elements that had no export value.
According to the central bank, sales by enterprises inside Export Processing Zones (EPZs) were counted twice: once during shipment from the EPZs to local firms and then again when exporters shipped from the ports.
According to the document, actual proceeds are frequently less than the initial value stated in the letters of credit. The EPB did not correct the discrepancy afterward. Losses stemming from stock-lot sales, discounts and commissions were not adjusted by the EPB either, according to the BB.
The central bank reached these conclusions after it investigated the causes of the growth in net trade credit, which is the difference between reported shipment values and actual money flowing into Bangladesh.
Bangladesh Bank prepares the BoP, which reflects a country’s dealings with the rest of the world, regularly using data acquired from scheduled banks, the EPB, the NBR, and other organisations.