GDP growth number surprises analysts

The economy was not as badly hurt as everyone expected by the three-month political turmoil inflicted by the BNP-led opposition alliance 

Provisional data released by the planning ministry yesterday showed the economy is on track to log in 6.51 percent year-on-year growth for the current fiscal year, which is the highest in three years.

Last fiscal year, when the country too had a similar bout of political upheaval, the economic growth was 6.06 percent, which was revised down from 6.1 percent.  The government's GDP figure is much higher than the analysts and development partners' estimates.

For instance, the World Bank revised down Bangladesh's growth forecast to 5.6 percent in light of the political developments of the January-March period.

The multilateral lender estimated that the country lost $2.2 billion (approximately Tk 17,150 crore) or 1 percentage point of GDP for the turmoil. 

Similarly, the Asian Development Bank has revised down its GDP growth forecast for Bangladesh to 6.1 percent. It did not specify the losses the incurred from the political unrest.

The Centre for Policy Dialogue (CPD) found the political unrest caused GDP losses of 0.55 percent or Tk 4,900 crore.

Interestingly, Prime Minister Sheikh Hasina herself said the country had incurred a loss of over Tk 1.2 lakh crore in the first 52 days of the unrest. 

Yet, it seems from the government data that this massive economic loss could not bring down the country's GDP growth.

“These provisional figures appear to be higher than what was indicated in term-loan disbursement, investment, revenue generation, exports and the adverse impacts of the political turmoil on manufacturing and services sectors,” Mustafizur Rahman, executive director of CPD, said.

“When the final figure will come up, we will know the real growth rate,” he added.

Salehuddin Ahmed, former governor of the central bank, echoed the same.

He said the GDP growth rate this year could be around 6 percent given the impact of the three-month political unrest. “How can this year's growth rate be 6.5 percent when investment and export are declining?” 

While briefing the media, Planning Minister AHM Mustafa Kamal said if there was no political turmoil the GDP growth rate could have been 7 percent.

He said the 6.5 percent growth is only being achieved due to the valiant nature of the truck drivers, the industrial workers and day labourers.

“They went on work despite the risks to their lives and kept the wheels of the economy rolling. As the planning minister, I am grateful to them.”

Kamal said the investment-to-GDP ratio has increased to 28.99 percent this year, up slightly from last year's 28.58 percent.  

The private and public sector's contribution stands at 22.39 percent and 6.6 percent respectively, said the minister.

Government data shows the farm sector's contribution and growth rate have gone down this fiscal year from the last. 

On the other hand, the stakes and growth rate of the industrial and services sectors in the GDP have increased this year.

The agriculture sector grew 3.04 percent this fiscal year, down from 4.37 percent a year ago.

The industrial and services sectors grew 9.6 percent and 5.82 percent respectively. 

Last fiscal year, they clocked in growth of 8.16 percent and 5.62 percent.