Delayed data shows how pandemic dealt a blow to Bangladesh economy

Bangladesh's economic growth for the recently concluded fiscal year 2019-20 has been revised down to 3.51 percent, the lowest in three decades, the latest data from the Bangladesh Bureau of Statistics showed.

The government had previously reported 5.24 percent GDP growth in FY20, with the coronavirus pandemic ravaging the economy for at least a third of the financial year.

The onset of the pandemic in March 2020 dealt a crippling blow to daily life and the economy, with industrial output, particularly the manufacturing along with the services sector suffering the biggest year-on-year slump in FY20.

With the COVID crisis showing signs of abating in the latter half of 2021, economic activities began to pick up gradually after the country exited a months-long nationwide lockdown.

The government had initially set a GDP growth target of 8.2 percent which was later revised down to 6.1 percent in light of the pandemic.

However, hopes of an economic revival were dashed as a second wave of the pandemic began to sweep across the country in March.

Accordingly, provisional estimates have now put the GDP growth at 5.47 percent for FY21, according to the BBS data.

Based on the BBS forecast, the size of the GDP is Tk 30.11 trillion in FY21, which was Tk 27.39 trillion the year before.

Commenting on the matter, economist Ahsan H Mansur said the latest GDP estimates are 'more realistic than years past.'

"No one has any control over the pandemic. It has hit all sectors of daily life and the economy.

"It is feared that the pandemic could lead to a negative growth of about 10 percent in India," Mansur pointed out. "It is good to hear that Bangladesh's economy is growing more than 5 percent.”

PUSHED INTO THE DITCH IN ONE BLOW

After record 8.15 percent growth in 2018-19 fiscal year, Finance Minister AHM Mustafa Kamal had set the target at 8.2 percent for FY20, but the coronavirus began spreading in the Chinese city of Wuhan in December 2019 and snowballed into a pandemic in no time.

Lockdowns in most parts of the world and travel restrictions already brought the global economy to its knees when the pandemic struck Bangladesh in March 2020, forcing the government to shut everything down by the end of the month.

The wheel of economy halted for over two months at the time. Although factories reopened, production slumped due to a huge drop in orders with international trade decreasing.      

The government, however, had initially reported a 5.24 percent growth in 2019-20 fiscal year despite the situation, drawing suspicion from many economists.

Now the BBS data shows a 1.7 percentage drop in GDP growth of that fiscal year from the initial estimate.

According to the latest report, the main credit goes to the agriculture sector for keeping the economy running at that time. The sector grew by 4.59 percent in 2019-20 compared with a 3.92 percent growth in the previous fiscal year.

The industries sector slumped to a 3.52 percent growth from 12.67 percent. Growth of large, medium and small industries dropped to 1.8 percent only from 14.2 percent.

Services sector slipped to a 4.16 percent growth against the previous year’s 6.78 percent.

FY21 ESTIMATES

In 2020-21 fiscal year, the BBS estimates that the growth in the agricultural sector dropped to 3.45 percent while industries growth increased to 6.12 percent.

The services sector saw a rise in growth to 5.16 percent, according to the estimates.   

The Gross National Income or GNI per capita increased to $2,227 from $2,024.

The national investment dropped to 29.92 of the GDP from previous fiscal year’s 30.47 percent.