The US $ 10 billion overstatement in exports will negatively impact Bangladesh’s foreign exchange reserves, GDP growth, and per capita income and necessitate a reassessment of government policies based on faulty data, economists warn.
Also, they say that misleading economic data could lead both domestic and foreign investors to make poor investment choices, undermining business confidence and development in the country.
“Direct impacts will be on the foreign exchange reserves as exports and remittances are the primary sources of forex for Bangladesh,” said Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue.
She said that impacts will be on all other economic indicators, be it GDP size, growth rate, or per capita income. Indirectly, investments and employment might be affected as investors look at a country’s growth and consumers’ purchasing power, Fahmida noted.
“It is a grave concern,” said Dr Selim Raihan, professor of economics at Dhaka University, regarding the incorrect export data. “It means that the data we see about GDP, growth rate, or balance of payments may not be accurate.”
Selim Raihan, executive director of the research tank South Asian Network on Economic Modelling (Sanem), stated that the discovery of this anomaly in exports implies that the ongoing economic crisis is worse than it appears. He also mentioned that the current economic recovery attempts would be impeded.
“Also, the Government should revisit the proposed budget to ensure it is based on accurate estimates,” said Dr Raihan.
Terming data manipulation as a very bad practice, Dr Salehuddin Ahmed, former governor of the Bangladesh Bank, said a significant reduction in export figures might impact foreign exchange reserves and exchange rate as well.
Dr Salehuddin Ahmed, former governor of the Bangladesh Bank, described data tampering as a very undesirable practice and stated that a considerable decline in export figures could have an influence on foreign exchange reserves as well as the exchange rate.