CPD questions government’s economic growth estimate

The provisional figure of GDP growth for fiscal 2016-17 is perhaps overestimated, the Centre for Policy Dialogue has said in a report.

Staff Correspondentbdnews24.com
Published : 27 May 2017, 12:09 PM
Updated : 27 May 2017, 12:14 PM

As estimated by the Bangladesh Bureau of Statistics or BBS, economic growth is expected to reach 7.24 percent in the year ending Jun 30. It was 7.11 percent in the previous fiscal year.

This will be the third time in the country’s history over the last two decades that GDP growth would cross the 7 percent mark.

At the same time, for the current fiscal year, Bangladesh’s per capita gross national income or GNI has been projected to be about $1,602, which is $138 higher than the preceding year.

“It needs to be considered that the provisional estimate of GDP has been prepared with limited available information and did not consider more recent trends in key macroeconomic correlates,” the Dhaka-based research organisation said. 

For example, the provisional estimate of BBS has predicted a strong growth of agriculture -- 3.4 percent this fiscal year, up from 2.79 percent in the previous.

This accelerated growth is predicted to be driven by strong performance of crops and horticulture which, in all possibility, has not considered the loss of Boro output, according to the report -- the State of the Bangladesh Economy, which was launched on Saturday.

Besides, the value addition of manufacturing sector has been estimated with first five or six months of data which could not capture the falling growth rate of export earnings in the latter months, the CPD said.

Also, the estimates have been prepared with an assumption that the entire government budget earmarked for the outgoing fiscal year will be implemented.

“Nevertheless, even if the provisional figures are perhaps overestimated, the GDP growth outcome for FY2017 may still be recognised as quite respectable, particularly when compared to global developments,” the CPD said.

The domestic savings-GDP ratio is expected to rise by about 1.1 percentage points to 26.1 percent in the current fiscal year.

On the contrary, the national savings-GDP ratio is projected to decline by 0.5 percentage point to 30.3 percent in FY2017 in the backdrop of the large current account deficit.

The CPD said this may be the first time in the recent history of Bangladesh when national savings and total investment as a share of GDP have come this close.