Growth jumps by 4.48% in second quarter, but poor left more vulnerable

Economists believe that this type of growth is not pro-poor

Bangladesh’s economic growth has increased by 4.48%, a huge jump from the growth of 1.96% registered in the first quarter of last year.

Compared to the second quarter last year, the growth is still seen – from 4.47% to 4.48%, according to a report released by the Bangladesh Bureau of Statistics (BBS) report today (8 April) on Bangladesh’s economic growth in the second quarter (October-December) of the current fiscal year. 

This huge jump largely banked on industries, where the sectoral growth from the first quarter to the second jumped from 2.44% to 7.10%. 

The growth in manufacturing, however, doesn’t mean things are easy. 

Compared to the second quarter last year, it is evident that growth has fallen in agriculture and service sectors.

Economists believe that this type of growth is not pro-poor.

‘Worrying trend’

Speaking to The Business Standard, Dr. Mustafa K. Mujeri, Executive Director, Institute for Inclusive Finance and Development (InM) said, growth in the second quarter of the fiscal year was mainly due to the industrial sector.

“This means, the growth of the industrial sector is pulling the entire growth. Growth in the agricultural sector is very low, which is very worrying.”

He said food security and income of people in rural areas were related to the agriculture sector, and would be impacted.  

Besides, the lack of growth in the agricultural sector means that low-income and poor people in rural areas are in a very exploitative state, he said. 

“The rural population is already suffering due to inflation, floods, natural disasters, and not getting fair prices,” he said. 

He also pointed out the service sector – which grew around 5.52% in the first quarter last year, cooling toi 3.61% in the fourth quarter, before reaching 2.41% in the first quarter this year. 

According to BBS data, it now stands at 3.78%.

“The service sector is also a very large sector. Many poor and low-income people are associated with this sector. The nature of growth is not poverty-friendly. If this type of growth continues, the poor and rural population will not suffer,” he said.

Regarding the growth of the industrial sector, this economist said it occurred because production in the industrial sector was low in the past months, especially after August last year. 

“Growth in this sector was also low in the first quarter of the current fiscal year. Now, demand for products has increased. Stocks of manufactured products have also decreased. All in all, it can be said that demand-driven growth has occurred in the industrial sector, which increased growth in the industrial sector.”

According to the BBS report, according to the provisional estimate for the second quarter of the current fiscal year, the GDP size at current prices is Tk14,043 billion.

In the second quarter of the 2023-24 fiscal year, it was Tk12,676 billion.