GDP slashed to 11-year low at 5.2pc in outgoing FY20

The country’s gross domestic product has been revised downward to provisional 5.2 per cent in the outgoing fiscal year due to the COVID-19 outbreak, said the finance division officials.

The revised GDP projection is an 11-year low since the country obtained 5.05 per cent growth in 2008-09, largely featured by the anticorruption crackdown from the military backed caretaker administration.

The revision is also 3 percentage point less than the original GDP projection of 8.2 per cent made by the finance minister AHM Mustafa Kamal in his first budget in parliament in last June.  

At a meeting with prime minister Sheikh Hasina on the day, Mustafa Kamal placed the revised GDP growth of the current fiscal of 20019-20, said the finance division officials.

While he apprised the PM of the adverse impacts of the pandemic, Mustafa Kamal expected an economic turnaround in the new fiscal with 8.2 per cent GDP projection, they said.

The revised growth rate of 5.2 per cent is much higher from the projections made by International Monetary Fund and the World Bank.

Both the multilateral donor agencies made a bleak projection setting the country’s gross domestic product growth below 3 per cent in the outgoing fiscal due to the coronavirus pandemic fallout.

Reacting to the WB’s prediction, Mustafa Kamal had stated that though GDP growth of the country would decline like the other countries due to the COVID-19 pandemic, but the economic growth of Bangladesh would be above 6 per cent.

Former Bangladesh Bank governor Salehuddin Ahmed said that the GDP growth in the outgoing fiscal would be more than 5 per cent.

Former lead economist Zahid Hussain of the WB Dhaka Office said that the GDP projection made by the WB and IMF was realistic since many other countries like China and India were looking to avoid negative growth.

Earlier, the Economist Intelligence Unit said that Bangladesh’s GDP growth would slow down to 3.5 per cent in the current fiscal due to preventive measures taken by governments to curtail the movement of people to check the spread of the virus since March 26.

Over a month-long shutdown has led to a demand-side shock to private consumption — the primary driver of economic growth in Bangladesh and the closure of factories and businesses resulted in a supply-side shock, too.

It is reported that income by the readymade garment sector, which accounts for over 80 per cent of the country’s export and earned $40 billion last year, declined 84.86 per cent to $ 366.58 million in April, compared to $2.42 billion during the same month of the last fiscal year.

Inflow of remittance dropped to a three-year low to $1.08 billion in April as the global economy has come to a halt due to the coronavirus pandemic ravaging most of the countries, including the major destinations where Bangladeshi migrants work.

Remittance in April was the lowest since May of 2017 when the country received $1.077 billion in remittance.

However, Bangladesh is expected to make a bumper harvest of boro, single biggest staple accounting more than one third the country’s rice productions.

News Courtesy: www.newagebd.net