Economy posts blistering growth in FY21

Despite the second wave of the coronavirus pandemic, Bangladesh's economy pulled off a stunning 6.94 per cent growth in the last fiscal year, way higher than the initial estimate.

The final figure is up 1.51 percentage points compared to the provisional estimate, thanks to the rebound of the industrial sector, especially the cottage, small, medium and large industries, according to the Bangladesh Bureau of Statistics (BBS).

The provisional estimate was 5.43 per cent. 

Planning Minister MA Mannan yesterday disclosed the final figures of the gross domestic product (GDP) after the meeting of the Executive Committee of the National Economic Council. 

Calling the growth "a miracle" amid the pandemic, the minister said, "It's a miracle that our GDP growth surged to nearly 7 per cent while many other countries took a hit."

He said that the prime minister was very happy because of the achievement and she has dedicated this to the countrymen.

The economic growth figure is much higher than the projections made by the international organisations.

The World Bank (WB) had projected that Bangladesh would have a GDP growth of 5 per cent by the end of FY2021. The International Monetary Fund (IMF) said it would be 4.6 per cent and the Asian Development Bank (ADB) put the figure at 5.5 per cent. 

Mannan said that the WB, the ADB and the IMF naturally do their projection. "But, this year, the World Bank has corrected its own projections. They have finally raised it. Our final growth is almost equal to the World Banks's projection." 

"I repeatedly say: it is our product that has been achieved by our people. We have full confidence in it. It's open to analysis," he said.    

State Minister for Planning Prof Shamsul Alam said, "We count this GDP system according to the United Nations' procedures and our national technical expert committee has overseen it."

"The IMF and the World Bank don't collect the data in the way we collect from the local level. They do it depending on some assumptions and international trade flows that are subjective. Lastly, they have used our data and updated them."

Prof Alam said the growth in national GDP was an indication that the economy had bolstered on the back of export and remittance.

"Additionally, revenue collection improved last fiscal year, indicating that businesses recovered, allowing them to pay more value-added tax and tax."

Contacted, Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, said the economic growth has been better as Bangladesh has been able to take the opportunity amid the pandemic instead of going into lockdown.

"As a result, the economy was functional with the help of some stimulus packages. There was domestic demand and external factors were also in favour of Bangladesh."

According to the BBS, the industrial sectors boomed, the service sector slightly declined while agriculture fared well.

In FY19-20, the industrial sector grew 3.61 per cent. It rose to 10.29 per cent in FY21.

Large industries surged 10.61 per cent from the provisional estimate of 6.40 per cent.

Micro, small and medium industries accelerated from 6.03 per cent to 13.89 per cent and the cottage industry expanded 10.27 from the provisional estimate of 1.6 per cent. 

The agriculture sector grew 3.17 per cent, up from 2.37 per cent a year ago.

Under the transport sector, the growth of land and water segments declined in the final estimate. Air transport contracted 2 per cent as both domestic and international flights were suspended because of the pandemic-induced lockdowns. 

Gross national income per capita rose to $2,591 in FY21 from $2,540 a year ago, showed BBS data. 

The size of the GDP expanded to $416 billion, compared to $411 billion in the primary estimate.