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Decent GDP growth amid extraordinary circumstances
Rejaul Karim Byron and Md Fazlur Rahman
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In the end, the final data from state-run Bangladesh Bureau of Statistics (BBS) shows the economy grew at a respectable 5.2 per cent last fiscal year, when large swathes of the global economy plunged into recession for the outbreak of coronavirus from Wuhan, China.
The Washington-based multilateral lenders -- the World Bank and the International Monetary Fund -- forecasted that the economy would grow between 1.6 per cent and 3.8 per cent in fiscal 2019-20 for the pandemic-whiplash, while the Asian Development Bank said the Bangladesh economy would expand at 4.5 per cent.
But, the economic locomotive of Bangladesh appears to have outpaced all projections.
Finance Minister AHM Mustafa Kamal credited the GDP growth rate to the uninterrupted economic activity before the onslaught of the coronavirus.
“Our economy was growing normally in the first seven months of the fiscal year and the growth during the period was added to the economy,” he told The Daily Star over the phone last night.
All the broader sectors -- agriculture, industry and service -- expanded, albeit at a slower pace, showed data from BBS.
“We had projected 8.2 per cent growth but we achieved 5.2 per cent. A lot of difference has been caused by the pandemic,” he said.
This, however, is the lowest GDP growth rate in 11 years.
Zahid Hussain, a former lead economist of the World Bank’s Dhaka office, remains sceptical about the BBS figures that were released yesterday.
“It is very difficult to construct a credible narrative of fiscal 2019-20’s GDP growth based on the details provided by the BBS. It appears that the BBS has not used all available data in preparing the preliminary estimates.”
However, this time the preliminary estimates could have benefitted from the availability of data on the key GDP components for the whole year, unlike in previous years when they had to be based on data covering the first 6-7 months.
In fiscal 2019-20, the industrial sector bore the most brunt among the broader sectors as the pandemic forced the government to close factories to tame the rogue virus.
It slowed by half from the previous fiscal year to expand at 6.48 per cent. The service sector grew 5.32 per cent, in contrast to 6.78 per cent a year earlier.
The agriculture sector’s growth slowed to 3.11 per cent, 81 basis points less than in fiscal 2018-19, according to constant prices data of the BBS.
Constant prices enable measurement of the actual change in output regardless of inflation.
Within the agriculture sector, the agriculture and forestry sub-sector slid 1.07 percentage points to end the year at 2.08 per cent. The fishing sub-sector grew at 6.10 per cent, sliding 11 basis points.
The manufacturing sector gave up 8.36 per cent to end the fiscal year at 5.84 per cent, which was 14.20 per cent earlier.
Large and medium-sized industries grew 5.47 per cent because of the collapse in demand at home and abroad. Small industries lost 3.37 per cent to grow at 7.78 per cent.
The electricity, gas and water supply sub-sector fell to 6.16 per cent from 9.58 per cent in the previous year.
Within the service sector, wholesale and retail trade expanded 5.02 per cent, down from 8.14 per cent.
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Firoz Ahmed
Bangladesh posted 5.2 per cent GDP growth for fiscal 2019-20, which is rather high for a year that coincided with a pandemic. Unlike in other countries, citizens did not strictly follow stay-at-home orders, with cars out in full droves during general shutdown and keeping the wheels of the economy chugging along. The photo was taken in the first week of May in capital’s commercial hub, Motijheel.