Current account in the red after several months’ surplus
BB turns to NBR for correcting trade data as EPB provides 'fictitious figures'
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Bangladesh sees its current account dip deeper, with the deficit counting US$ 5.7 billion as of April, after nine months of surplus as the country's foreign trade tips the balance.
The deficit was seen $3.3 billion at the end 2023 fiscal year, according to the central bank of Bangladesh.
The trade deficit, a major component of the current-account shortfall, as of April, was $18.7 billion, in a fast rise from $15.8 billion in March.
"Given the sizeable deficits in April, we continue to expect the overall current- account deficit to worsen more in the coming months as the export demand remained subdued," says Dr Ahsan H. Mansur, executive director of the Policy Research Institute of Bangladesh or PRI.
On the other hand, he adds, import payments will surge in the coming months as well, with the prospect of widening the gap further.
Dr Mansur mentions that there were anomalies in the data of EPB and the central bank at last corrected the trade data.
People familiar with the developments in the central bank told the FE that the export data that the Bangladesh Bank used were provided by the EPB.
And the export promotion bureau had been showing more than $12 billion worth of "fake" figures.
They allege the EPB cooks the boobs and shows higher figures by raising its entries.
The higher export data which actually do not come into Bangladesh had multiple impacts on the balance of payments (BoP) accounting. For example, it had turned the financial account negative and current account positive.
However, BB from now on will take the data from the National Board of Revenue or NBR.
As a result, the financial account which remained in negative territory for long also turned into surplus at $2.23 billion during the period under review.
Export receipts were recorded at $33.68 billion, down by 6.8 per cent, during July-April period, according to official data. Import payments also down by 12.3 per cent to $55.37 billion during this period of the fiscal year 2024 that ended on June 30.
Worker-remittance inflow, however, was recorded positive at $19.12 billion or 7.8 per cent up over the corresponding period.
In the meantime, the overall balance of payments was recorded $5.57-billion deficit during the July-April period.