Bangladesh Economy

[RΛIDEN]

This thread is for all topics covering Bangladesh economy and relevant discussion about the subject

 

[RΛIDEN]

Hi @Waz

Kindly make this a sticky thread.

Thank you

 

[RΛIDEN]

What to expect from Bangladesh economy in 2024​

The year 2023 was indeed one of the most difficult ones in the recent history of Bangladesh economy, as it exhibited its weaknesses on various fronts. Supply disruptions and the spike in the prices of fuels and other commodities in the global market—caused by global events—pushed up costs worldwide, leading to high inflationary pressure. However, although several countries have now been successful in reining in inflation through appropriate policy measures, Bangladesh is still struggling to do the same. Additionally, the country is now faced with multiple challenges such as a fragile banking sector, financial account deficit, volatility in the exchange rate, and depleting foreign exchange reserves. Due to these challenges, the macroeconomic stability that Bangladesh enjoyed for a long time due to high growth, relatively low inflation rate and strong external sector has been weakened.

What to expect from Bangladesh economy in 2024

The year 2023 was indeed one of the most difficult ones in the recent history of Bangladesh in terms of economic performance.

www.thedailystar.net

 

[RΛIDEN]

Renowned European Brand Kale Enters Bangladesh​

(MENAFN- Bangladesh Monitor) Dhaka : Kale Ceramics, a Turkish manufacturer which brought a technological breakthrough with the world's finest and lightest porcelain tile Kalesinterflex, opened its doors in Bangladesh.

Renowned European Brand Kale Enters Bangladesh

Dhaka : Kale Ceramics, a Turkish manufacturer which brought a technological breakthrough with the world's finest and lightest porcelain tile Kalesin

menafn.com

 

[RΛIDEN]

 

[RΛIDEN]

Bangladesh to become 20th largest economy by 2038​

Bangladesh is slated to become the 20th largest economy in the world out of 192 countries by the year 2038, according to a London-based think tank Centre for Economics and Business Research

https://www.dhakatribune.com/business/335517/cebr-bangladesh-to-become-20th-largest-economy-by

 

[c14-Isotope]

How $10b export data error throws economic assessment off

So, now with the NBR correction, a new shocking reality has hit us hard – our exports are not as much as was touted​

Infographic: TBS


The truth is finally out here. Our exports are not as much as they are shown. It is at least $10 billion less

The mystery of export data mismatch was finally resolved yesterday after the National Board of Revenue (NBR) corrected its estimates of exports it had been erroneously showing inflated for the last few years.

This has thumped down exports figures for the last nine months by a huge $10 billion, showing a negative growth in reality instead of positive growth perceived so far.

It was this far believed that more than $12 billion mismatch between shipment and realised value of exports was because of slow realisation of export receipts. Exporters always doubted the rosy export figures.


So, now with the NBR correction, a new shocking reality has hit us hard – our exports are not as much as was touted.

The latest Balance of Payments (BoP) statement for July-April of FY24 revealed that the financial account swung to a surplus of $2.2 billion, reversing from a historic deficit of $9.25 billion a month earlier. Indeed, the financial account turned positive after two years of being negative.

This shift follows the adjustment of inflated export figures by $10 billion for July-March of FY24, according to the Bangladesh Bank.

Exporters were often blamed for not bringing their export proceeds into the country. Failure to repatriate these proceeds leads to a shortfall in expected inflows, adversely affecting the financial account balance.


However, the reality is that the export figures recorded by the NBR were hugely inflated.


After the major correction, export earnings, which initially showed 5.53% year-on-year growth in July-March, have now turned negative at 6.8% in July-April, according to the latest BoP released on Wednesday on the Bangladesh Bank website.

In July-March of FY24, total exports were registered at $40.8 billion which declined to $30.9 billion after the NBR had corrected the export data entry. In July-April, total exports registered at $33.6 billion, which was $2.4 billion less than the $36.13 billion recorded in the same period of the previous year, according to corrected data.


On the other hand, the negative export growth turned the current account balance to a deficit of $5.7 billion in July-April which previously showed a surplus of $5.7 billion in July-March.

At the same time, the trade deficit, which narrowed to $4.7 billion in July-March, widened to $18.6 billion in July-April following data corrections by the NBR. According to the new calculation, the current account deficit registered $15.7 billion in July-March, as per Bangladesh Bank data.

It is unexpected to have such a major error in significant data, said Dr Ahsan H Mansur, economist and executive director of the Policy Research Institute (PRI).

He said there would be major consequences on two indicators – the export-to-GDP ratio and debt servicing payment calculations – following the revision of export data.

The decline in export calculations will reduce the export-to-GDP ratio and increase the burden of debt servicing, he added.

"While we believed our export performance was good, the data correction reflects that our real performance was poor," he said.

He said the government should inquire whether the incorrect export entries benefited any individuals or groups as exporters get incentives against export earnings.

How the correction was made in export data entry

The correction was made following widespread criticism regarding the substantial gap of $12.2 billion between the shipment and the realised value of the country's exports.

The Bangladesh Bank prepared the BoP statement by adjusting the mismatch in export values within trade credit, which is a component of the financial account. As the trade credit showed a $12.2 billion negative in July-March, it affected the financial account, turning it into a deficit and causing concerns for the central bank.

The International Monetary Fund (IMF) also raised concerns with the Bangladesh Bank about the substantial negative trade credit, which has contributed to the financial account remaining in deficit in FY24.

In its second review report on the $4.7 billion loan package, the IMF also addressed significant delays in the repatriation of export proceeds as a major factor behind the large negative trade credit that led the financial account in deficit.

Exporters were also claiming for a long time that the export figures of the Export Promotion Bureau (EPB) were not correct.

Stakeholders say the double counting of exports inflates the country's export figures, making it difficult to assess the true performance of the export sector.

This misleading data is the result of two different methods of calculating export numbers by the NBR and the EPB.

However, following corrections by both agencies, export earnings now show negative growth.

Explaining the massive change in the financial account, the Bangladesh Bank in its BoP statement mentioned that the NBR revises and provides the export shipment data to the Bangladesh Bank and the EPB by adjusting multiple entries.

A senior executive from the Bangladesh Bank said the NBR is the source of export data and thus bears sole responsibility for the substantial data entry mismatch that has led to the deficit in the financial account.

Efforts to reach NBR chairman Abu Hena Md Rahmatul Munim via phone and WhatsApp messages regarding this issue were unsuccessful.

How $10b export data error throws economic assessment off

So, now with the NBR correction, a new shocking reality has hit us hard – our exports are not as much as was touted

www.tbsnews.net

 

[CPTPLANET]

Lmao “error”

 

[Afif]

$14b export data puzzle is unnerving​

You can lie with data or illuminate the truth with data. And there's something in between -- half-truths.

A $14 billion correction in export figures by the central bank is necessary because it addresses one economic half-truth.

But half-truths are unnerving.

The data revision that came on Wednesday through a regular update on the balance of payments raises disturbing questions about the country's economic performance and the policy that revolved around it.

The shocking revelation has sent economists scrambling for answers, but there are more questions than answers as the authorities are almost silent.

What's clear is that the discrepancy in export figures again underscores the importance of accurate macroeconomic data. A lack of statistical accuracy can upend many indicators. The calculation of gross domestic product is one of them.

Such a big discrepancy is "unbelievable", said MK Mujeri, an economist and former director general of the Bangladesh Institute of Development Studies.


Export and import data calculation is a simple task, but big mistakes such as this by officials raise questions over the authenticity of other components of the economy. "Entire GDP estimates should be revisited," said Mujeri.

His stance concurs with the views expressed by other economists.

"If the ratio of this discrepancy has significantly increased over time, then that should necessitate revisiting the growth estimates," said Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh.

With the disclosure, some other issues came to a head as well.

The statistical revision suggests that Bangladesh Bank and the finance ministry have finally accepted that no significant export earnings are retained abroad as exporters have claimed for years. That means the trade deficit is much larger than originally presumed. That also indicates that the target of reaching $110 billion in exports by 2027 is far from realistic.

"In other words, we should now formulate a more realistic export strategy and identify what exact constraints are hindering our export performance," Ashikur said.

The difference between export figures calculated by the Export Promotion Bureau and Bangladesh Bank persisted for at least 12 years, with the gap crossing $12 billion in fiscal 2022-23.

Economists have long been referring to the puzzle. Finally, the central bank woke up and reconciled the mismatch for the July-April period of fiscal 2023-24. As a result, exports fell 6.8 percent during this period, a sharp contrast with a 3.93 percent growth shown in the EPB's figures released earlier.

What's more, Bangladesh runs the risk of reputational damage abroad. The country's image as a garment powerhouse defined by the sheer volume of shipments will be seriously dented. Clothing exports, which make up about 10 percent of the economy, are an important indicator that sets the country apart from its peers.

SOME ESTIMATES ARE OBSOLETE NOW

It is going to create serious data chaos. Whatever Bangladesh has estimated in the past has now become "mostly irrelevant", said Fahmida Khatun, executive director of the Centre for Policy Dialogue.

The EPB publishes figures based on the data from the customs department. Apparently, for procedural reasons or otherwise, the customs department took into account the same export data more than once in many cases, known as double or triple counting.

As per the EPB data, exports were $47.47 billion in the July-April period of fiscal 2023-24. However, the amount stood at $33.67 billion after the correction, according to data released by the central bank on Wednesday.

But it's not clear for how long such wrong data entry has been going on.

Good policy framing depends on authentic data. Poor quality data gives wrong signals to the policymakers.

"If policymaking is done based on unreliable data, then policies become irrelevant and defunct," Fahmida said. Unfortunately, citizens have been misled about the real economic situation due to such anomalies perpetuated by government organisations, she said.

These errors show the extent of data governance or a lack of it in Bangladesh. Without quality information, informed policy-making is difficult, said MA Razzaque, chairman of the Research and Policy Integration for Development.

The export data mismatch will have an impact on GDP estimates because value addition from exports is included in the GDP calculation. The ratio of value addition is nearly 60 percent. So, the GDP impact will be as much as $6 billion, Razzaque said.

Md Deen Islam, associate professor of economics at Dhaka University, said this correction would lower the GDP growth rate, with exports contributing less to overall economic output, GDP growth rates for the period will need to be revised downward, and future projections for economic growth will need to be adjusted to reflect the more accurate export figures, potentially leading to more conservative growth estimates.

The significant revision could create temporary confusion and mistrust among stakeholders, including businesses, investors and international partners, he said.

"Revisions might lead to questions regarding the credibility and reliability of economic data published by national agencies," he added.

Deen Islam said policymakers may need to reassess their strategies to stimulate economic growth and stabilise the macroeconomic environment as the revised export figures indicate a significant decline.

However, the reconciliation of export data provides a more accurate picture of Bangladesh's economic landscape, which is crucial for effective policy-making and strategic planning, said Deen Islam.

Birupaksha Paul, a professor of economics at the State University of New York, said it was a positive move toward a proper accounting of the balance of payments.

A senior official of the EPB said it does not produce export data. The agency compiles export data based on numbers it receives from the customs wing of the National Board of Revenue and the central bank.

"We only see export data once the goods are shipped. If any consignment is returned, the EPB does not have the chance to find that out," he said, adding that it is monitored by the BB and NBR.

"Still, if we need to correct any data, we will do it," said the official. There is a committee comprising representatives from the EPB, the BB, the NBR and other agencies.

The EPB is yet to release data for the July-June period of FY24 although it usually publishes the figures early every month.

Saiful Islam, executive director of Bangladesh Bank, said from now on, the central bank will base the calculation on the corrected export data.

Asked about the previous mismatch in data between the BB and the EPB, he said there was no problem with the past data. There was a problem with the method of reporting. He did not elaborate.

Despite the big reset, the economy's health remains unchanged. The correction addresses anomalies but does not fundamentally alter the economic landscape.

বাংলা​

How did EPB’s export data vary so much from Bangladesh Bank’s?​

Exporters dismayed by massive discrepancy in govt's export data, concerned about such high export data when their own experience was telling them otherwise

Publish : 04 Jul 2024, 09:21 PMUpdate : 04 Jul 2024, 10:02 PM

Exporters in Bangladesh said mismatch between Export Promotion Bureau (EPB) and Bangladesh Bank’s (BB) export data was the result of hiding the true numbers by inflating export earnings.

Once the central bank used the International Monetary Fund (IMF)'s BPM-6 approach and made this data available, many began to notice the discrepancy between this data and EPB’s.

Exporters said as the Export Promotion Bureau (EPB) is responsible for publishing export data, the institution should have been more cautious and transparent in publishing the numbers as overstated data ultimately impacted them.
Industry insiders also said that along with the EPB's exaggerated data, the invisible balance was not submitted to Bangladesh Bank, hence unnecessarily drawing allegations like money laundering.
They had been expressing concern over EPB's export data, saying that it did not accurately represent the volume of trade they were seeing.

Behind this mismatch

On Wednesday, officials of the central bank said the EPB publishes figures based on the data from the customs department. Due to procedural reasons, the customs department took into account the same export data more than once in many cases, which is known as double or triple counting.
They said that even when shipments were rejected by the customs, they were still considered while preparing the export data. As a result, the EPB data showed higher exports than the actual sales in the global markets by local exporters. The gap has been adjusted as per the recommendation of the IMF's $4.7 billion loan program.
A major discrepancy was found in the export data published by EPB and as a result, the National Board of Revenue (NBR), Bangladesh Bank and EPB jointly decided that the data by NBR will be considered as the final data in the case of exports earnings.
However, due to this decision, the export earnings of the country decreased significantly, which was shown as inflated in the EPB data.
According to the Balance of Payment data published by the central bank on Wednesday, the export earnings of Bangladesh in July-April period of FY24 stood at $33.67 billion, a decline of 6.8% from $36.14 billion from the same period in FY23.
According to the EPB data of July-April period of FY24, the merchandise export earnings of the country was $47.47 billion, which was 3.93% higher than $45.68 billion.
This indicates a major discrepancy in the export earnings of the country, meaning the EPB may have declared surplus export earnings amounting to $13.8 billion.
The readymade garment (RMG) sector, which makes up the lion’s share of Bangladesh’s export sector, earned $29.68 billion in July-April of FY24, which is 6.7% lower year-on-year, said the corrected export data.
However, the EPB declared that the sector earned $40.49 billion with a 4.97% year-on-year growth.
Industry insiders said that although the EPB collects preliminary data from the National Board of Revenue (NBR), the central bank has just started gathering data using the BPM-6 approach as per the prescriptions of the IMF.

What exporters say

Exporters said that they had been saying this for a very long time, that EPB data was fabricated. But their views were not taken into account. Finally, the real facts have been revealed, they also said. Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that he has been talking about this since 2022.

“In November of 2022, exports crossed $5.13 billion, then the highest export in a single month in the history of the country. But we did not export so much then. I didn't know how export increased to such heights,” he also said.
Then, exports were shown at the $5 billion mark for several months which was incorrect. He went on saying that the data proved that exporters were not in a good condition now.

He also said 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.

Talking to Dhaka Tribune, Md Nasir Khan, vice-president of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), said that the monthly EPB data just shocked them.
“The condition of industries was shaky, while production declined regularly. But we didn’t know how exports kept increasing each month,” he added.
He also said that this misinformation affected the industry and its stakeholders.
Such an erroneous show of inflated export data by a responsible organization is unexpected and frustrating, he added..
Mohiuddin Rubel, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Dhaka Tribune that the fabricated export data concealed the real situation of the industry.
“As the actual situation was concealed, it prevented us from planning for the future. If we know the actual situation, we can bargain with buyers, can prepare for a future groundwork, entrepreneurs wouldn’t expand the industries and the new entrepreneurs wouldn’t invest,” he added.
Now the industry in a “zero” position, he went on saying that as per government rules, they are dependent on EPB for data, but if they provide fabricated and exaggerated data, then it is unexpected and ultimately hinder the industry.
The industry insiders also said that for a long period, there was more than a $10 billion gap between the export data provided by the EPB and the central bank, and based on the EPB data, various parties have been blaming them of laundering money under the guise of exports.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI) said the export data has been miscalculated and it should have been fixed earlier.
“The revision in the BoP is the result of this change in accounting methodology. Now, it's clear how well our exporters are doing. But due to this, the financial account turned positive but the current account went negative again. So, it is not good news for us,” he added, saying that although there are some positive signs in the economy, it will take some time to bring down inflationary pressure.

EPB unwilling to take the blame

However, it was not possible to get an official statement from any official of EPB in this regard.
This reporter was unable to reach EPB Vice-Chairman Anwar Hossain despite repeated attempts.
Contacted, EPB Secretary Bibek Sarkar said the matter was beyond his jurisdiction, and asked to contact Abu Mukhles Alamgir Hossain, director of policy and planning, but he was also unavailable despite multiple calls.
Md Akhtaruzzaman, deputy director of the policy and planning wing, said: "Contact the director. I am busy with other work,” before hanging up.
However, an official of EPB, requesting anonymity, said that they collect data from the NBR as well. It is provisional data and they mention this in their monthly export data reports.
“I cannot tell you something more as it is beyond my jurisdiction. However, discussions are going on among us at the office and we will be able to provide an official statement soon,” he added.

 

[EugeneP]

The Balance-of-Payment position and Foreign Exchange Reserve is public information as every USD is held in a U.S. Security, Euro is held in EU security etc., so the issuer of the security knows who holds what. These are all computer accounts now at NY Fed (for USD). For example,

Bangladesh Bank

www.bb.org.bd

Tells every USD, EU, JPY etc., that Bangladesh Bank has. So, how can a 10 billion discrepancy crop up? It is like my bank account suddenly shrank by $100,000. Looks like some exporters were reporting unrealized revenue that they have to now write off. It is like I had loaned $100,000 to my dead-beat brother-in-law and now I realize he won't ever pay me back and I consider it as bad debt.

 

[Afif]

In a nuthsell, Bangladesh actual Export was around $51 billions last year, but Government Export Promotion beauru showed it as $62+ billions.

Similar/even worse data mismatch ($14 billions) has also been observed this year.

But that just tip of the iceberg. It is does not merely question credibility of other government agencies and their stats, we all know very well they are also complicit in similar data fabrication. It's just that there is no way to prove it.

Personally, I recently got to talk to an economist who is a professor at an university.

He told me that, BD's actual GDP figure is likely to be around $400 billions. And it is inflated by more 10% in government published figure. ($450 billions, lol)

Also, government significantly manipulated the latest census. (I knew it before, the actual population numbers could be as high as 190 millions.)

That's puts our actual GDP per Capita just above $2000. Lol. Our GDP per Capita never surpassed the Indian one. They were running with the fake story for years. @UKBengali (bruh, )

@Bengal71 @Arthur @Joe Shearer and @Nilgiri (I swear if you tell me, I told you so....)

@Al-Zakir bro, there is another thread with similar report. But this one is more accurate, comprehensive and in good faith. I request you to keep it and delete the other one. Or you can merge that one with this.

Also, please keep the upcoming trolls in check.

 

[UKBengali]

We need to hold our horses here and not be too despondent.

BD per capita PPP which does not rely on export figures or nominal values shows similar numbers to India. The average BD'shi now has similar living standards to the average Indian.

This is an issue of course and it is good that it has come to light and partly explains why forex reserves have halved in the last 2-3 years.

There is little evidence of data fudging on purpose but fault statistical assumptions made by BBS, and the fact this has come to light and been openly published shows that BD still has robust transparency in its financial data.

Awami League now needs to adjust industrial policies to get BD exports back up again. Setback of course but not a sign of a terminal weakness in BD economy.

PS - We also need to remember that these numbers do not include service exports which come to about another 6 billion US dollars annually now.

 

[Afif]

We need to hold our horses here and not be too despondent.

You don't even live here. Easy for you to say.

BD per capita PPP which does not rely on export figures or nominal values shows similar numbers to India. The average BD'shi now has similar living standards to the average Indian.

No, everything needs to be recalculated again. Read the article.

PS - We also need to remember that these numbers do not include service exports which come to about another 6 billion US dollars annually now.

It actually does.

 

[UKBengali]

No, everything needs to be recalculated again. Read the article.

Forget the article and understand how GDP per capita PPP is calculated. Where is the reference to exports or anything else like nominal here?

Purchasing Power Parity (PPP) - Economics Help

Definition and explanation of Purchasing Power Parity 0 a theory which suggests that exchange rates are in equilibrium when they have the same purchasing power in different countries.

www.economicshelp.org

"Purchasing power parity will involve looking at a basket of goods to determine effective living costs. The purchasing power parity is determined by dividing a basket of goods in one country, by the cost of basket of goods in another."

 

[SoulSpokesman]

Looks like a toolkit to destabilise the Bangobandhovi SHW govt. Regards