A national initiative has got underway to develop a new index aimed at providing a more representative estimation of economic activities by way of capturing accurate extent of burgeoning services sector.
Sources said Bangladesh Bureau of Statistics (BBS) initiated efforts to collect inputs and frame the index.
For framing the new economic parameter, styled Quarterly Index of Services Production (QISP), data collection began on March 11. The first report is expected to be published by June.
Currently, the national statistical agency measures industrial production through the Index of Industrial Production (IIP).
However, it believes the IIP falls short of adequately capturing the full scope of economic activities, as the services sector’s contribution to the economy has been rising rapidly.
The statistical agency says the shift in consumption trends, particularly the growing demand for services and consumption, cannot be accurately reflected under the IIP.
“The IIP is no longer adequate,” BBS notes.
It says there is need for a more precise measure of short-term economic activity by incorporating growing services sector.
“With rapid urbanisation and Bangladesh’s increasingly open economy, new services and technologies are driving the expansion of the services sector, making it imperative to track their growth separately,” according to the BBS note on its undertaking.
The QISP will cover key services industries, including insurance, mobile phone and mobile financial services (MFS), tourism, aviation–including private sector-land-port services, chartered accountancy, education sector, health services, research organisations and postal services.
It is expected the new index will offer policymakers and businesses a clearer understanding of the services sector’s performance, allowing for better economic planning.
In this index upgrading Bangladesh is following the example of neighbouring India, which introduced a similar indicator in 2012.
The services sector’s share in GDP is 52.72 per cent, as of 2023-24 fiscal year, making it the dominant force in the country’s economy.
The introduction of the QISP is expected to provide a more comprehensive and timely assessment of this critical sector.
jasimharoon@yahoo.com