Bangladesh’s per capita income increased by $82 to $2,820 (equivalent to Tk3,39,211) in the fiscal year 2024-25, according to provisional estimates of the Bangladesh Bureau of Statistics (BBS) released today (27 May).
This marks a rise from $2,738 (Tk3,04,102) recorded in the previous fiscal year.
The BBS also estimates that the country’s GDP growth rate stood at 3.97% in the fiscal year 2024-25 (FY25).
According to the provisional data, the agriculture sector grew by 1.79%, the industrial sector by 4.34%, and the services sector by 4.51%.
In the fiscal year 2023-24 (FY24), the GDP growth rate was 4.22% as per the final estimate.
Speaking to The Business Standard, Dr Zahid Hussain, former lead economist of the World Bank’s Dhaka office, said, “The main reason for the decline in agricultural growth is natural disasters. The flood in August last year damaged the Aman crop.
“On the other hand, the manufacturing sector performed better than the previous fiscal year. Although the country’s instability has not fully subsided, industrial growth has been strong even amid so many challenges”
The economist further said, “However, the figures given by BBS are provisional. This level of industrial growth is possible, but only from an optimistic point of view. Given the situation we are in, it’s uncertain whether growth can be sustained in the long run based solely on exports, since exports make up only 40–45% of our manufacturing.”
“Industry also includes construction, and that sector is not doing well. This is why the industrial growth figure seems optimistic,” he observed.
Zahid Hussain said the slowdown in the services sector can be explained by disruptions.
The BBS’s direction – that growth is slowing this fiscal year compared to the last – is correct, he stated.
“That aligns with projections from the World Bank, IMF, and ADB. But there are questions about some of the numbers. For instance, the public investment figure shown under expenditure is Tk38,29,834 crore. This year, the government and state-owned enterprises (SOEs) together invested around Tk2,65,000 crore, and the revised budget shows an even lower amount.
“So where is this Tk38,29,834 crore in public investment coming from? The numbers don’t add up. Even if we include local government spending, public investment shouldn’t be that high. Local government investment is usually very low. Therefore, the public investment figure is questionable,” he noted.
“Moreover, the data presented for private investment shows growth in both real and nominal terms. But the proxy data for capital machinery shows negative growth. Both LC (letter of credit) settlement and LC openings are in the negative. A 1.76% growth in total capital formation is being shown. Are we manufacturing capital machinery domestically and investing that way? We don’t really have such a situation. So some of these projections are questionable. However, this cannot be called manipulation – rather, the forecasts are optimistic,” Zahid Hussaind observed.
Selim Raihan, professor of the department of Economics, University of Dhaka said the provisional GDP growth figures don’t seem unrealistic.
“We had expected this level of growth. The decline in growth has occurred because large-scale investments have fallen. However, when we look at the investment figures, we see that investment hasn’t actually decreased that much. Sometimes investments do take place, but the returns may not be visible,” the professor said.
He noted that agricultural growth appears to be accurate. The industrial growth that has been reported is mainly due to a recent rise in ready-made garment exports.
“But the problem lies in the methodological flaws that still persist in GDP calculation. A large portion of GDP is based on assumptions. These estimates are made using assumptions rather than updated or actual data. Because proper data is lacking, the figures are based on assumptions, which increases the possibility of errors,” said Selim Raihan, also the executive director of the South Asian Network on Economic Modeling (SANEM).
“Now perhaps there is less manipulation than before, but GDP is still being calculated using flawed methods and incorrect assumptions, just like in the past,” he said.
“These are the same issues we, the White Paper Committee, highlighted in the report. We recommended reforms, but those have yet to be reflected in the current growth estimates. The same outdated figures are still being used, with no review or revision. We had called for the establishment of an independent data commission. Without such a body, it will not be possible to ensure credible data,” the economist concluded.