REJAUL KARIM BYRON and AHSAN HABIB

Bangladesh is no stranger to data mismatches, but a $12 billion gap between export shipments and actual receipts from abroad points to potential capital flight just before the January election.

In 2022-23, the mismatch between the actual realisation reported by the Bangladesh Bank and the Export Promotion Bureau’s (EPB) shipment figure was $12.08 billion, the highest in at least eight years.

EPB data showed that goods and services exports stood at $63.05 billion in FY23 whereas the central bank reported that Bangladesh received $50.97 billion in the same year.

Traditionally, the gap between the EPB and BB figures hovers around $4-5 billion, but it jumped in 2021-22 to $8.51 billion from $4.73 billion in 2020-21. The difference is rising in the current fiscal year of 2023-24.

The deficit in trade credit in the balance of payments (BoP) was $3.7 billion in the first four months of FY24, up from $1.3 billion a year prior. Trade credit appears on a buyer’s balance sheet as accounts payable.

“Owing to many traditional reasons, the gap exists in the data produced by the two government bodies. But the huge gap is not supported logically by traditional reasons,” said Zahid Hussain, a former lead economist of the World Bank’s Dhaka office.

He said some people may not bring their export proceeds for the lingering political uncertainty in the election year.

The instability in the foreign exchange market is handing another blow: since the rate is falling frequently, exporters are delaying the transfers to cash in on further depreciation of the taka against the US dollar.

Since exporters are not getting the real rate at present, some might be bringing in their sales proceeds through unofficial channels. As a result, the foreign currency is not coming to Bangladesh, putting the already strained foreign exchange reserve under pressure.

“The trend still continues. That is why there is a huge deficit in the trade credit of the BoP,” Hussain said.

A top official of the BB also said many exporters are not transferring sales proceeds due to expectations of a further depreciation of the local currency and the deepening political uncertainty ahead of the election slated for January 7.

The taka has lost its value by about 30 percent against the US dollar since January last year amid a sharp depletion of the foreign currency reserves caused