World Bank says Bangladesh economy may grow 6.4% in FY 2017-18
The World Bank has revised upwards its growth forecast for Bangladesh and said the economy is expected to attain a 6.4 percent growth in current fiscal.
In last June, the bank predicted a 6 percent growth for the financial year.
The revised growth forecast came at the global lender’s half-yearly report ‘Global Economic Prospect’ released on Wednesday.
However, the government eyes an economic growth of 7.8 percent in the 2017-18 fiscal year.
Earlier, the bank predicted a 6 percent GDP growth in the 2016-17 fiscal which has now been revised at 7.2 percent.
In the last fiscal year, the government, was as usual, in disagreement with the World Bank as the agency makes a conservative forecast while the government tries to put an ’embellished’ economic picture.
According to the Bangladesh Bureau of Statistics or BBS, the GDP growth in the 2016-17 fiscal was 7.28 percent but the global lender said it did not cross 7 percent.
“Bangladesh’s growth in FY2016/17 (July-June) was 7.2 percent, exceeding the June forecast owing to higher-than-expected outturns in the manufacturing and services sectors,” the bank said in its new report.
“Robust private consumption was complemented by strong public investment growth,” it added.
Strong growth in investment in the public sector coupled with the issue of consumer demand growth has played a big role in this regard, believed the WB economists.
However, some economists and researchers question the growth figures as the exports and remittance inflow dropped while floods damaged crops last year.
Selim Raihan, a professor of economics at Dhaka University, argued that there was a ‘gap’ in 7.2 percent growth prediction.
Prof Selim, who is also the executive director of South Asian Network on Economic Modeling or SANEM, said the indicators, based on which the BBS counts growth, have inconsistencies.
It is ‘a little difficult’ to match the government’s accounts, considering the export earnings, remittance inflow, agriculture and private sector investment.
For example, he said, the government showed 10 percent manufacturing growth.
“A large portion of this sector is the readymade garment sector, which experienced below 2 percent growth in export. We are inclined to think that the other sectors enjoyed huge growth, but that’s not the case,” he said.
“The World Bank has its own indicators for initial estimation, but in the final accounts, it has no way but to depend on the country’s statistics. That’s why contradictions remain in the final accounts,” Prof Selim said.
“Yet,” he added, “on the whole, their prediction is more or less consistent.”