Govt’s 6.51pc GDP growth calculation raises eyebrows

The country’s economy has posted a growth of gross domestic product (GDP) by 6.51 per cent in the current fiscal year (2014-15) despite political unrest for three months of the second half of the fiscal year, according to a provisional estimate of the Bangladesh Bureau of Statistics.Economists, however, termed the estimate unacceptable saying that the GDP growth at 6.51 per cent is impossible and exaggerated considering the political turmoil and vandalism for more than three months of the fiscal year.Planning minister AHM Mustafa Kamal on Thursday said that the provisional data showed GDP grew by 6.51 per cent in the current fiscal year and he blamed the political unrest, blockades, hartals and vandalism by BNP-led opposition parties for not achieving the GDP growth target of 7.3 per cent set for the year by the government.Per capita income of the country also rose to US$ 1,314 in the year from that of US$ 1,190 in previous fiscal year, Kamal said at a press briefing after the National Economic Council meeting at NEC auditorium.The actual economic growth in the last FY2013-14 finally stood at 6.06 per cent against the provisional estimation of 6.12 per cent, the data revealed by the planning ministry showed.‘GDP would grow by around 7 per cent in the year if there would not be political unrest and vandalism in some months of the year,’ he said.

But, 6.51 per cent is not also bad, he said.Adviser to the former caretaker government Mirza Azizul Islam told New Age that the rate of economic growth was unacceptable as the impact of three months political unrest was not reflected in the estimates.‘There is no credibility of such growth amid unfavorable environment as services sector, the biggest contributor to the economy, could not perform for at least three months,’ he said.The government may provide such estimates as others do not have statistics, he said.
‘GDP growth at 5.6 per cent estimated by the World Bank is logical to me. Even growth at 6 per cent seem to be exaggerated,’ he said.Kamal, however, said that the economy grew on higher growth in services and industry sectors, and remittance inflows, among other positive indicators.The Centre for Policy Dialogue earlier estimated that the country lost 0.55 per cent of the gross domestic product or Tk 4,900 crore due to the political unrest during January to mid-March in the current fiscal year.CPD executive director Mustafizur Rahman told New Age on Thursday that the GDP calculation of 6.51 per cent seemed to be an over estimation considering the loss to economies due to political unrest, the investment scenario and export performance.‘It’s a provisional data, lets see what the final calculation stands,’ he said.Different multilateral lending agencies including World Bank and Asian Development Bank earlier projected lower GDP growth for the year.World Bank in April downsized the GDP growth projection to 5.6 per cent for the current fiscal year due to the impact of political turmoil in the second half of the fiscal year from its earlier forecast of 6.6 per cent.ADB also cut its forecast to 6.1 per cent from its earlier projection of GDP growth at 6.4 per cent.According to the BBS statistics, services and industry sectors grew in the year at higher rate than that of the last year while agriculture sector saw a sluggish growth.
In the current fiscal year, industry sector grew at highest 9.6 per cent against the growth rate of 8.14 per cent in last fiscal year.Services sector grew by 5.83 per cent and agriculture sector grew by 3.04 per cent which were 5.62 per cent and 4.37 per cent respectively in previous fiscal year, the data showed.The services sector contributed the highest 56.42 per cent to the GDP in the current fiscal year followed by industry sector with 27.98 per cent and agriculture sector with 15.59 per cent, the data showed.

In last year, services, industry and agriculture sectors contributed 56.18 per cent, 27.71 per cent and 16.11 per cent respectively.The contribution of services and industry sectors to the GDP increased a little bit in the year while the contribution of agriculture sector decreased significantly.The total size of the GDP stood at Tk 15.13 lakh crore in current price in the year which was Tk 13.44 lakh crore in previous fiscal year.Kamal said that Bangladesh was one of the four countries in the world which achieved GDP growth at the rate of more than 6 per cent in four years in a row.Bangladesh’s position in the world was now 58th considering the per capita income of US$ 1,314 in nominal calculation.Per capital income based on purchase power parity is now US$ 3,190, he said.BSS statistics showed that the investment-GDP ratio also increased slightly in the year to 28.99 per cent from that of 28.58 per cent in previous year.

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