Bangladesh’s trade deficit reached $20.22 billion for the July-May period of the financial year 2023-24, according to Bangladesh Bank.

Initially reported at $4.74 billion for the July-March period of FY24, the deficit surged to $18.7 billion by July-April due to adjustments made by the central bank and National Board of Revenue, which addressed discrepancies in export data.

This correction revealed that actual export earnings were approximately $12 billion lower than previously reported.

Bangladesh Bank data indicated export earnings of $37.34 billion for July-May, while the Export Promotion Bureau (EPB) had reported $51 billion for the same period.

The correction recalibrated various economic indicators, leading to confusion over economic data, including balance of payment figures.

As a result, the financial account shifted from negative to positive, while the current account shifted from positive to negative in the July-April period of FY24.

The financial account recorded $2,080 million for July-May, down from $5,515 million in the July-April period of FY23.

Previously, it had shown a deficit of $9,258 million for July-March FY24.

The current account recorded a deficit of $5,982 million for July-May, compared to $12,020 million for July-April FY23, reversing from a surplus of $5.8 billion in July-March.

The trade deficit was $26.02 billion for July-May FY23.

According to Bangladesh Bank officials, EPB statistics were based on customs house data, which often included duplicate export entries due to procedural issues.

The corrected data reduced discrepancies between reported exports and actual repatriation of goods, significantly decreasing trade credit and shifting the financial account from a deficit to a surplus.

Foreign direct investment inflows declined by 6.5 per cent to $3.8 billion for July-May compared to the previous year.

Foreign portfolio investments were negative at $111 million, compared to $38 million negative in the same period of the previous financial year.

In response to a severe dollar crisis, Bangladesh Bank sold nearly $34 billion to banks over the past 36 months.

As of June 30, the country’s foreign exchange reserves stood at $21.8 billion, according to International Monetary Fund guidelines.

The interbank dollar rate rose to Tk 118 after the central bank increased the rate by Tk 7 on May 8.

The deficit in trade services expanded to $3,475 million for July-May FY24, compared to $2,849 million in the corresponding period of the previous financial year.