Economists sceptical as govt. says 7.65pc GDP growth

BBS data shows per capita income $1,752

Sakhawat Hossain

The government on Tuesday announced that gross domestic product in the current fiscal grew by 7.65 per cent while economists said that the claim was not ‘acceptable’ with the present rate of employment and investment.

Planning minister AHM Mustafa Kamal at a briefing made the announcement that the country’s GDP growth rate reached a new height surpassing previous best 7.28 per cent in 2016-17 because of ‘good performance of the industrial sector, exports and inflow of remittance backed by higher investment.’

The new per capita income became $1,752 in the current financial year from $1,610 in 2016-17 on the basis of provisional calculation by the Bangladesh Bureau of Statistics, he said, hoping that the GDP growth rate would increase in the final calculation.

Economists expressed scepticism about manufacturing growth of 13.11 per cent and industrial growth of 11.99 per cent shown by the bureau of statistics as those were not supported adequately by data on investment and job creation.

Former interim government adviser Mirza Azizul Islam said that the country could not obtain higher economic growth with the present rate of investment hovering around 30 per cent of the GDP. ‘We need 34 per cent investment of the GDP to achieve 1 per cent higher growth since 2011-12,’ he said. 

Mirza Azizul Islam contested the planning minister’s claim on good growth in exports and in-flow remittance. He said that both the vital macro-economic components were having growth in the current fiscal but those came against paltry and negative growth in past year.

The country’s export earnings in July-February period of 2017-18 grew by 7.38 per cent to $24.39 billion from $22.71 billion in the same period of 2016-17 and the remittance inflow grew to $13.54 billion in 2017 from $12.46 billion in the previous year.

WB, ADB, IMF suggest below 7%

Experts said that the projected GDP growth in the outgoing fiscal was higher from the initial projection of 7.4 per cent by finance minister AMA Muhith in the presentation of national budget in parliament in June 2017 and also higher from the projection by the World Bank, Asian Development Bank and International Monetary Fund which forecasted growth rate below 7 per cent.

World Bank in Dhaka lead economist Zahid Hossain said that the growth calculation by the bureau of statistics was highly questionable providing the fact of employment data of 2.3 per cent by the same agency released in February.

The big jump in growth in manufacturing and industrial sector should have empowered more youths than the bureau estimation, he noted.

The government has been facing sever criticisms since the past year for projecting 7 per cent plus growth, which, according to the policymakers, could be made possible because of production enhancement of the manufacturing sectors backed mainly by apparel exports.

The bureau of statistics provisional data showed 13.18 per cent growth in the manufacturing sector which was 10.31 per cent in 2014-15, 11.69 per cent in 2015-16 and 10.97 in 2016-17.

Zahid pointed out that the double-digit growth for successive years just on the back of production enhancement and without major breakthrough in employment and private sector investment was something ridiculous.

The economists were also sceptical about the projection of 1.10 per cent growth in production of natural gas in the current fiscal against 0.28 per cent growth in the past year and 10.11 per cent growth in the construction sector in the current fiscal against 8.77 per cent growth in the past year.

Former Bangladesh Bank governor Salehuddin Ahmed said that the bureau of statistics should come with ‘objective’ data on the highly critical issue like GDP.

The country’s agricultural sector, according to the bureau, grew by 3.06 per cent in the current fiscal against the 2.97 per cent growth in the past year. The growth of service sector slowed down to 6.33 per cent in the current fiscal from 6.69 per cent one year back. 

The bureau said that the growths of the education and financial service providers like banks and insurance also slowed down.

• Courtesy: New Age Apr 04, 2018