Analysts attribute robust manufacturing, service sectors to increased GDP
DHAKA, – Economists and financial analysts tend to attribute the robust manufacturing, service and infrastructure sectors to Bangladesh’s steady GDP growth surpassing this year neighboring India though the Covid-19 pandemic slowed down the global economy.
World Bank’s main lending arm International Monitory Fund (IMF) earlier this week released its latest “world economic outlook” (WEO) saying Bangladesh was in a better position in many indicators than India while it was set to surpass India in terms of per capita Gross Domestic Product (GDP) in 2020.
Several Indian analysts said the pandemic onslaught on India was much harsher than that of Bangladesh, massively slowing down the economic growth there, while economists in Bangladesh preferred to see the development as the outcome of stability over the years and the appropriate political agenda.
Former Bangladesh Bank governor Dr Mohammad Farashuddin stressed that the time-fitting steps on the part of the government saved largely the economy from the pandemic onslaughts and said Prime Minister Sheikh Hasina exclusively deserved its credit.
He said Bangladesh’s economy bounced back quickly from COVID-19 pandemic related impacts due to time-befitting measures as “life and livelihood have to go hand in hand” is the policy of Prime Minister Sheikh Hasina to overcome the outbreak of the epidemic in the country.
“It’s an individual achievement of Prime Minister Sheikh Hasina,” he said, particularly appreciating her monitoring and direction for economic affairs in line with her envision of turning Bangladesh into a developed nation by 2041.
Former finance adviser to the past caretaker government Dr Mirza Azizul Islam said Bangladesh performance was “very good” in terms of GDP among its South Asian neighbors “but we have to move forward sustaining the growth”.
He said since the COVID-19 posed a challenge for the growth, the authorities concerned needed to provide more focus on disbursement of government-announced stimulus packages for the cottage, micro, small and medium enterprises (CMSMEs) sectors.
The premier issued 31 instructions and announced over 21 stimulus packages of Taka 112,663 crore which is 4.3 percent of the total GDP to offset the COVID-19 impact, acclaimed by the businessmen as well.
Financial analysts highlighted a comparison of Bangladesh and Indian performance in terms of GDP achievements looking into the related factors and found enhanced women participation in labour forces to have played a key-role in advancing the economy.
The data shows women’s participation in Bangladesh workforce to be 32 percent compared to 20 percent in India.
They also observed that Bangladesh now depends more on industry and services sectors compared to agriculture while the neighboring country still struggled to vitalize industrial sector as its GDP was still largely dependent on agriculture.
According to the WEO India’s per capita GDP is likely to fall by 10.5 percent to US$ 1,877 — the lowest in 5 years — while Bangladesh is expected to see its per capita GDP to grow by 4 percent to $1,888.
The business analysts initially feared the pandemic to cause a major setback particularly in external trading as more than 90 percent orders for the garments manufacturers were cancelled.
But the RMG sector managed the buyers’ orders to be reinstated while consumption in the internal market was increasing as well to offset the pandemic impacts on job market simultaneously.
The export earnings in July to August this year were $6,878 million, which was 246 percent higher than $1,985 million in April to May period and higher than $6,732 million recorded in July to August period of 2019.
The remittance inflow also rose by 76 percent to $4,562 million in July-August from $2,598 million in April-May and 50 percent from $3,042 million in July-August in 2019 while exports and remittances are main contributors to growth.
Economists pointed out several other crucial factors like electricity supplies, communication infrastructures, political stability and food self-sufficiency should be regarded as other guiding factors for enhanced GDP.
Dhaka Chamber of Commerce and Industry (DCCI) President Shams Mahmud said Bangladesh’s economy continued to overcome different crisis since 2008 under Sheikh Hasina’s leadership.
“Bangladesh is one of the first countries to announce stimulus packages after COVID-19 outbreak and the stimulus is playing vital role to overcome the virus impact,” he said, adding that the country already also overcome the losses of frozen food exports caused by the super cyclone Amphan.
International Business Forum of Bangladesh (IBFB) president Humayun Rashid echoed Shams saying “wheel of economy” continued to roll defying the pandemic.