Mist over GDP growth rate

Shamsul Huq Zahid | Published: May 26, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

What will be the rate of growth of the gross domestic product (GDP) of Bangladesh during the outgoing fiscal (2013-14)?
A precise figure is difficult to predict. The multilateral donors-the International Monetary Fund (IMF), the World Bank (WB) and the Asian Development Bank (ADB) have predicted it to be between 5.4 per and 5.5 per cent as against the official growth target of 7.2 per cent.
Some months back when the donors had revised downward the Bangladesh growth prospects in the current fiscal, the finance ministry took exception to it and claimedÂ that the growth would be somewhere near the target.
The country's central bank, however, appeared to be alive to the ground realities when it projected the GDP growth at around 6.0 per cent.
Late last week, Planning Minister AHM Mustafa Kamal after a meeting of the executive committee of the National Economic Council (ECNEC) disclosed the provisional estimate of the GDP growth for the current fiscal at 6.12 per cent.
Terming the GDP growth rate an 'impressive' one, the PlanningÂ Minister said with satisfaction that despite lower projections made by the donorsÂ the economy has performed well during the current fiscal.
But is the growth rate disclosed by the minister anyway linked to the summoning of the high officials of the Bangladesh Bureau of Statistic (BBS) to the planning ministry some days back?Â It was reported in a section of the media that the planning minister was not happy with the GDP estimates done by the BBS and that was why its top officials along with relevant files were summoned. No matter what the media reports did try to indicate, the planning ministry did not say anything about it.
One can take it for guaranteed that the latest provisional estimate of the GDP would be mentioned in the budget documents to be placed before national parliament during its next session.
But the provisional GDP growth figure prepared by the BBS has caused eyebrows to raise. At least one leading economist, Dr. Zaid Bakht, working at the Bangladesh Institute of Development Studies (BIDS) has raised question about the BBS estimate.
Talking to a leading Bengali daily last week, Dr. Bakht said the contribution of the services sector, usually, is almost equivalent to the combined contribution of two major sectors---agriculture and industry. The shares of the agriculture and industry are estimated at 19Â per cent and 32 per cent respectively.
According to him, the agriculture is expected to perform well this fiscal since there has been no major natural calamity and the government continued to provide necessary support to it. But the situation has been different in the case of industries sector. It continued to suffer as usual due to power and gas shortage. The normal production in mills and factories also suffered during the first half of the current financial year because of political turmoil of unprecedented nature.
Dr. Bakht expressed surprise over the growth projection made by the BBS about the services sector. He said when the industries sector has suffered badly from political troubles, there is no reason for the services sector to remain unaffected.
Explaining, he said retail and wholesale trade, transport and tourism constitute a large part of the services sector. Everybody witnessed how trade, transportation and tourism had been hit hard by the restive politics in the recent past. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) had time and again fed the media about the extent of loss being suffered by businesses due to political disturbances.
The situation has been relatively calm and stable following the January 05 general elections. But time and overall business environment are not that conducive to recoup losses of the first six months of the fiscal and surpass the last year's growth target in some cases in the second half of this fiscal.
For instance, the growth rate of retail and wholesale trade has been estimated at 6.57 per cent for the current fiscal as against that of 6.18 per cent achieved last fiscal. The transport sector growth has been estimated almost at par with that of the last year. Similarly, the construction sector is set to grow at 8.56 per cent this fiscal as against that of 8.0 per cent last fiscal. However, the construction sector growth does not match with the rate of implementation of the public sector development projects during the first three quarters of the current fiscal. The rate of implementation of ADP was only 40 per cent until March last.
The questions raised above are hard to ignore. It is expected that the BBS has sufficient reasons in its possession to substantiate the projections it has made about the GDP growth and relevant growth of other sectors of the economy.
But statistics, particularly those collected and compiled by the official agencies of a country like Bangladesh could be misleading. It is not for the first time that questions are being asked about its data. Even an influential minister raised questions about the BBS statistics relevant to the agriculture sector. Authorities concerned have assured all time and again of taking necessary programmes and measures to improve the national data collection and compiling procedures.
What does appear to be more important in the case of national data collection and compilation work is making the national statistical organization an independent entity free from interference by any quarters. In addition to that, it should be ensured that competent and adequately qualified personnel are appointed to the key positions of the BBS.
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