From July through September, GDP growth fell to 1.81 percent. The increase in the corresponding quarter of the last fiscal year was 6.04 percent. Previously, during the October-December timeframe of the 2020-21 fiscal year, the GDP growth rate dropped to 0.93 percent. This data is disclosed in the revised report issued by the Bangladesh Bureau of Statistics (BBS).
It is thought that the political shifts linked to the mass-uprising and interruptions in industrial output significantly affected the GDP. Experts indicate that in the initial quarter of the fiscal year, obstacles like floods and labor disputes also impacted total production. Nonetheless, as uncertainty has waned, they anticipate that growth will revert to a more favorable trend in the upcoming quarter.
Professor Mustafizur Rahman, Distinguished Fellow at the Center for Policy Dialogue (CPD), said to Bonik Barta, "During the initial quarter of the fiscal year, there were difficulties including student protests, flooding, and labor strife. This affected total investment and job opportunities. When juxtaposed with the same quarter from the previous year, the data at that point frequently appeared exaggerated, prompting us to question it. As a result, in comparison to that period, the increase seems significantly diminished. Nonetheless, uncertainty has now diminished. We anticipate that growth will revert to a more favorable trend in the upcoming quarter.”
As per the most recent data from the BBS, the industrial sector has seen the most significant drop in growth during the first quarter of the ongoing fiscal year. Between July to September, the increase in this sector was only 2.13 percent, while it was 8.22 percent during the same timeframe of the prior fiscal year. Moreover, the agricultural sector experienced an increase of 0.16 percent, a decline from the 0.35 percent recorded last year. The services sector increased by 1.54 percent, in contrast to 5.07 percent the year before.
As per the preliminary figures for the ongoing fiscal year, the GDP is measured at BDT 12.66 trillion. In the initial quarter of the last fiscal year, it amounted to BDT 11.70 trillion. Previously, the World Bank forecasted that Bangladesh's economic growth would decrease to 4 percent in the medium term. Before that, the World Bank had predicted a growth rate of 5.70 percent. In April, the ADB mentioned that by the end of the ongoing fiscal year, Bangladesh's growth might reach 6.6 percent. Nonetheless, by September, this prediction was adjusted downward to 5.1 percent.
Businessmen, nonetheless, assert that in order to address the present circumstances, it is essential to ensure political stability, implement investment-friendly policies, manage inflation, and undertake effective measures to rebuild trust in the banking industry. Furthermore, it is crucial to bolster ongoing reform efforts to guarantee sustained economic stability. If these actions are carried out successfully, the economy's growth can be revitalized.
Taskeen Ahmed, the President of the Dhaka Chamber of Commerce and Industry (DCCI), mentioned to Bonik Barta, "The decline in the GDP growth rate to 1.81 percent in the first quarter of this fiscal year raises concerns about the nation's economy. The DCCI asserts that key factors contributing to the growth decline are political instability, elevated inflation, rising loan interest rates, and slow private sector investment. The industrial sector, especially, has faced the greatest effects of this crisis, resulting in a decrease in production efforts.”
Following the governmental shift, if the law and order scenario deteriorates, instability will affect the nation’s key export sector, the garment industry. Employees in sectors like pharmaceuticals also held demonstrations with different requests. Consequently, factory proprietors had to stop production on multiple occasions. Throughout this time of interrupted production, owners also reported canceling 15-20 percent of their orders. This time also saw disruptions in development projects. Consequently, the initial quarter of the fiscal year experienced the least execution of the ADP. The trend in revenue collection was negative. Owing to unfavorable developments in several economic indicators, total national output declined.
Business leaders say that the country's law and order situation has still not reached the desired level. Additionally, the gas crisis and the diminishing impact of private sector loans from banks are preventing investment from increasing, which is affecting industrial growth as well.
In this regard, Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Bonik Barta, "If the gas crisis is not resolved, investment will not increase. Loans from banks have also decreased. Moreover, with the new definition by Bangladesh Bank, the amount of non-performing loans will increase, making it difficult to repay loans. However, if Trump comes to power, trade conflicts with China may increase, creating business opportunities in our country. But the question is how much we can capitalize on that opportunity. To take advantage of that opportunity, we first need to resolve our crises."