Published in Daily Asian Age on Wednesday, 04 April 2018
GDP growth projected at 7.65 pc in FY18
Fakhruddin Mehedi
The Country is projected to reach a record 7.65 percent GDP growth in the current fiscal year (2017-2018), which is 0.25 percent higher than the budgetary target of 7.40 percent, yet another achievement of Prime Minister Sheikh Hasina.
Planning Minister AHM Mustafa Kamal informed the media yesterday after the meeting of the Executive Committee of the National Economic Council (ECNEC) chaired by the prime minister. He said, “The GDP growth will be 7.65 percent in this fiscal year. It’s our initial and provisional estimation.”
“Primary estimation doesn’t take into account the risk factors. In the coming days of the fiscal, natural disaster, political instability following the election or ongoing bank crisis can be a threat to the country’s growth,” said the minister. He also termed the estimation as extended reflection of growth.
But he also acknowledged that the economy of the country is going forward in various parameters. After being stuck in the 6 percent range for nearly a decade, the economy finally surpassed 7 percent economic growth in fiscal 2015-16. Bangladesh reached a healthy growth of 7.28 percent in the last fiscal year (2016-2017). According to the Bangladesh Bureau of Statistics (BBS), the growth rate in FY2016 was 7.11 percent.
Bangladesh’s economy is expected to expand to $274.5 billion by the end of the fiscal year from $249 billion last year, the minister said. The minister also informed that the country’s per capita income has increased to US$ 1752 now from US$ 1610.The provisional estimate of GDP growth was made on the basis of three main sectors agriculture, industry and services.
In the current fiscal year, the agriculture sector growth has been temporarily calculated at 3.06 percent. In the last fiscal year (2016-17), the final growth in agriculture was 2.97 percent. On the other hand, the growth in the industrial sector has increased 11.99 percent, which is higher compared to the previous year the percentage was 10.22 percent in the last fiscal year. The services sector growth is predicted 6.33 percent.
Kamal said the good growth in the industrial and sub-sectors especially in the services and housing has increased.
The services sector is making the highest contribution to the GDP growth which is 52.18 percent. The contribution of the services sector to GDP was 53.85 percent in the last fiscal year. The contribution of the industrial sector is 33.71 percent while that of agriculture is 14.10 percent compared to the last fiscal year it was 32.42 percent and 14.74 percent respectively.
The investment ratio to GDP has increased to 31.47 percent this fiscal year from 30.51 percent in the last fiscal year (2016-2017). The private investment is 23.25 percent of GDP while the public investment is 8.22 percent. The private investment was 23.10 percent against the public investment of 7.41 percent in last fiscal year.
Evaluating the projected growth, Mustafa K Mujeri, the executive director of the Institute for Inclusive Finance and Development said, “It is a primary estimation of the current fiscal year. As there are three more months to go of the fiscal year, the estimation can be up or down.”
Regarding this, Khondaker Golam Moazzem, the research director of the Centre for Policy Dialogue (CPD) has said, “The growth of industrial sector is up but the service sectors growth has declined. On the other hand, the agricultural growth has increased but it is contradictory as the country experienced flood in September last year.”
“The inflation in the country has gone high in last few months. Specially, rice price has increased last year and it is still remains the same. This is not reflected in the estimation.”
“Last few years the service sector experienced upward trend but this year it has slightly declined. This is worrisome as this sector lead employment,” the researcher said, adding that, “The current employment and the growth of this sector are also contradictory.”