GDP growth overstated by up to 1.3 points since FY15

Detailed summary

Bangladesh’s GDP growth was overstated by 0.7 to 1.3 percentage points annually from FY2014-15 onwards, largely due to inconsistencies in manufacturing data, unverified tax…

Bangladesh’s GDP growth was overstated by 0.7 to 1.3 percentage points annually from FY2014-15 onwards, largely due to inconsistencies in manufacturing data, unverified tax figures, and unreliable administrative records, according to a forensic audit by a government panel.

It identified seven major sources of overestimation: factories’ self-reported production figures, the use of tax collection data to estimate industrial output, inflated export figures, unverified production data from state-run monopolies, flawed construction estimates, mechanical projections for small industries, and incorrect subsidy adjustments.

The seven-member panel presented its initial findings at the BBS headquarters in Dhaka yesterday, seeking feedback from stakeholders.

Experts said the findings underscore the need to restore the credibility of official statistics, as inaccurate GDP estimates can distort economic priorities and lead to flawed policy decisions.

Officials said steps had been taken to improve the consistency of official data, including the introduction of an integrated system to strengthen tax data reporting and the decision to use Bangladesh Bank’s export figures as the authoritative source.

The discrepancies largely involved secondary and administrative data rather than information collected directly through Bangladesh Bureau of Statistics (BBS) surveys, said Prof AK Enamul Haque, director general of the Bangladesh Institute of Development Studies (BIDS) and a panel member.

About 60 percent of the data comes from the BBS, while 40 percent comes from secondary sources, according to him. “It is very important to triangulate data from secondary sources, particularly when unusually large increases are observed,” he said.

The findings also suggest the economy was portrayed more favourably than it actually was during the Awami League government’s tenure, when reported GDP growth climbed to nearly 8 percent.

“The overestimation was intended to serve political interests and promote a…

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