Published in The Financial Express on Sunday, 7 June 2015.
Contribution of farm, service sectors to GDP declines
Plea to offer incentive prices to farmers
Contribution of the largest labour-employing agriculture and service sectors to the country’s Gross Domestic Product (GDP) declined in the financial year (FY) 2014-15 compared to the previous year, government statistics revealed.
However, share of the industrial sector to the GDP increased in the outgoing FY’15.
The GDP represents the aggregate value of goods and services produced in an economy.
Despite having record crop production, share of the farm sector to the GDP declined by 0.54 percentage points in FY’15 than that of FY’14.
According to the Bangladesh Economic Review 2015, published by the finance ministry, the agriculture sector’s contribution to the country’s GDP (in the current price and base year FY’2005-6) declined to 15.96 per cent in FY’15 from 16.5 per cent in FY’14 which was 16.77 per cent in FY’13.
However, the growth of the farm sector in terms of the GDP also witnessed a 1.33 percentage point decline in FY’15 than that of FY’14.
The growth of the sub-sector crops and vegetables was only 1.3 per cent in the outgoing financial year in terms of the GDP which was 3.78 in FY’14 over that of FY’13.
Experts attributed the decline to fall in prices of some major crops and increase of the share of industrial sector.
The share of the industrial sector to the country’s GDP at constant price increased marginally by 0.87 percentage points to 30.42 in the FY’15 from 29.55 per cent in FY’14, according to the Economic Review data.
Meanwhile, the share of the service sector in the GDP also declined by 0.33 percentage points to 53.62 per cent in the current fiscal year from 53.95 per cent in the FY’14.
Agriculture economist Dr Mahabub Hossain said that decline in the growth of the crop sector declined due to the price debacle of some key produces including potato, paddy, vegetables etc.
He said production of both food and cash crops has shown a very good trend in the outgoing financial year but in many cases, farmers got no satisfactory outcome. He said farmers should be given incentive prices for their crops and this also will help improve the overall economy of the country.
Farm economist Golam Hafiz Kennedy said the country’s industries and service sector will gradually increase and the farm sector will face labour shortage in the coming days.
“So necessary subsidy should be provided to farmers to keep them engaged in agriculture which is compulsory for ensuring food security of the country,” he said.
Additional director (research) at the private think-tank Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said although contribution of the industrial sector to the GDP has been boosted a little bit, fall in service and agriculture sectors has affected the overall economic growth.
“Growth of the wholesale and retail trade remained static while transportation sector declined in the outgoing fiscal affecting the service sector,” he said.
He said: “Our study has found that due to the political turmoil from January to March, the wholesale and retail trade sector incurred Tk 4.48 billion, tourism Tk 8.25 billion, transport Tk 7.44 billion and banking Tk 1.56 billion losses.”
He said the government needs to boost private investment for achieving higher economic growth target in future.
“Political stability is equally important for attaining inclusive economic growth,” he said.