Revising GDP and per capita income!

Dismissal of the need to revise GDP and per-capita income by the ministry of finance (MoF) due to discrepancies in export data has sparked controversy over the methods used in calculating crucial economic statistics. In a press statement, the ministry explained that the central bank typically reports export earnings based on the foreign currency actually received for exported goods and services, and the Bangladesh Bureau of Statistics (BBS) uses the central bank statistics while calculating GDP. Therefore, the statement concludes, concerns expressed in newspapers about a potential reduction in GDP growth and per-capita income on account of export data mismatch are unfounded. It is worth noting that export figures calculated by the Export Promotion Bureau (EPB) have been found to be flawed- overstated to be precise, possibly due to incorrect calculation methods. This prompted calls for a review of GDP-related data. The finance ministry's statement is now being questioned by economists, who point out significant incongruities in what the ministry claims to be a valid and authentic method.

Disagreeing with the ministry's statement, a former lead economist of the World Bank's Dhaka office, Zahid Hussain told the FE that the central bank in its data in the fiscal year 2022-23 showed Tk 5.051 trillion as export receipts while the BBS used Tk 5.908 trillion in GDP calculation, which is 16.97 per cent higher. Similarly, he adds, in the fiscal year 2021-22, the export figure used by the BBS was 13.89 per cent higher than the central bank data. Because of this mismatch, he demands that a revision of the size of GDP and per-capita income cannot but be "compulsory". Besides, he refuted the finance ministry's claim that the central bank provided export data on export receipts saying, it provided the shipment data. Executive Director, of the think tank, Policy Research Institute of Bangladesh, Ahsan H Mansur says if the BBS "really" uses central bank's data, then there is no need for revision of GDP and per-capita income. However, he adds, if the BBS uses shipment data instead of actual export-receipt data, then both the GDP and per-capita income have to be revised.

The disagreement needs to be resolved not just for the sake of data accuracy, since unreliable and conflicting data are potentially capable of misguiding policy planners. Importance of authentic data is indeed integral to government policies upon which depends the success of planning and execution. Needless to say, while absence of data in many areas is a serious problem both for the policymakers in the government as well as individual researchers, conflicting data can cause havoc by way of misdirecting decision making on the part of the government and render research findings grossly erroneous. Relevant quarters are often of the opinion that lack of coordination among different agencies of the government is primarily responsible for data anomalies.

Therefore, it is incumbent on the government to look into this as a matter of priority for bringing transparency in the methods of data accumulation and calculation so that that questions often raised about data accuracy are addressed in right earnest.