Al Amin :
The country’s Gross Domestic Product (GDP) witnessed a decline to 5.78 percent in the last fiscal year (2022-23), primarily driven by significant setbacks in the industrial and service sectors, as revealed by the final data from the Bangladesh Bureau of Statistics (BBS). However, the official figures indicate a rise in the growth of the agriculture sector to 3.37 percent during the fiscal year, compared to 3.05 percent in the previous fiscal year (2021-22).
According to BBS data, the growth rate of the industrial sector decreased to 8.37 percent during this period, down from 9.96 percent in FY 2021-22. Experts attribute this decline to factors such as the sharp depreciation of the local currency against the US dollar, reduced investments, and disruptions in exports and imports of raw materials.
Similarly, the growth rate in the service sector also experienced a decline to 5.37 percent from 6.26 percent in FY 2021-22. The services sector contributes approximately 53 percent to the country’s GDP, while the industrial sector constitutes about 36 percent and the agriculture sector about 11 percent.
Experts said that the reason behind the decline in growth is due to the sector grappled with a sharp fall in the value of local currency against US dollar, lower investment, exports and imports of raw materials.
On the other hand, growth in service sector also declined to 5.37 percentage points from 6.26 percentage points was in FY 2021-22.
The services sector accounts for about 53 per cent of the country’s GDP, while the industrial sector constitutes about 36 per cent and the agriculture sector about 11 per cent.
Dr. Zahid Hussain, former lead economist of the World Bank’s Dhaka office, highlighted the steady decline in the industrial sector’s contribution to GDP, attributing it to energy and dollar shortages, which have disrupted both investment and production.
Bangladesh has been grappling with an energy crisis since the onset of the Russia-Ukraine conflict, leading to import controls on non-essential and luxury items and halting the purchase of liquefied natural gas from international markets to preserve foreign currency reserves.
These measures affected the importation of primary energy sources, consequently disrupting electricity production and causing nationwide power outages, further impacting production.
“The contribution of the industrial sector to GDP is steadily declining due to energy and dollar shortages. Because, the shortage of two disrupted investment and production,” he told The New Nation.
Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), noted the significant impact on the industrial sector, with many factories facing challenges in importing sufficient raw materials, resulting in decreased production.
He emphasized that the manufacturing sector, a key driver of Bangladesh’s economy, typically maintains double-digit growth.
“So, their production fell. Although, the growth of the manufacturing sector is a key driver of Bangladesh’s economy and it usually remains at double-digit,” Mansur said.
Additionally, BBS data indicated a decline in GDP growth to 6.7 percent in the first quarter (July-September) of the current fiscal year (2023-24),
compared to 8.76 percent in the corresponding period of the previous fiscal year.
While the Bangladesh economy had shown signs of recovery from the adverse effects of the Covid-19 pandemic, with GDP growth reaching 7.88 percent in FY 2018-19 before declining to 3.45 percent in FY 2019-20, it rebounded to 6.94 percent in FY 2020-21 and 7.10 percent in FY 2021-22. However, the economic growth in FY 2022-23 was hindered due to the Russia-Ukraine crisis.
According to the final BBS data, the GDP at current market prices stood at Tk 44,908,417 million in FY 2022-23, compared to Tk 39,717,164 million in the previous fiscal year.
