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Dhaka Tribune

Bangladesh's economy faces sluggish growth with a decrease to 3.78%

Economic growth was much higher at 7.08% during the same period of the previous fiscal year (October - December, 2022)

Update : 15 Apr 2024, 09:58 PM

Bangladesh experienced a slowdown in its economic growth, with a decrease to 3.78% in the October-December period of the 2023-24 fiscal year. This decline, the slowest in at least three quarters, was primarily due to a sharp drop in manufacturing output growth caused by decreased domestic consumption and sluggish export performance. 

The services sector also saw a substantial reduction in growth, halving during the quarter, which partially offset a slight increase in agricultural production. These figures were reported by the Bangladesh Bureau of Statistics (BBS) in its quarterly estimate of gross domestic product (GDP).

Comparatively, economic growth was much higher at 7.08% during the same period of the previous fiscal year (2022). 

The BBS released its estimate amid forecasts from international agencies predicting below-average growth for Bangladesh's economy. The World Bank (WB) recently projected a relatively subdued GDP growth of 5.6% for the current fiscal year, down from the average annual growth rate of 6.6% prior to the Covid-19 pandemic. 

The WB also anticipates continued slower growth in the next fiscal year (2024-25), at 5.7%, driven by a modest recovery in private consumption supported by inflation moderation.

According to the national statistical agency, industrial production expanded by 3.24% in the October-December period of 2023, a significant drop from 10% growth during the same period a year ago. This slowdown in industrial output, which constitutes 37.57% of the economy, marks the lowest growth rate in the past five quarters. The BBS introduced quarterly GDP calculation as a condition of a $4.7 billion loan from the International Monetary Fund to Bangladesh.

This report is the second release of quarterly GDP estimates, which measure the value of goods and services produced within an economy over a specific period. 

BBS reported a 4.65% growth in farm production during the October-December period, up from 4.22% a year earlier. Meanwhile, the services sector, which represents half of the GDP, saw growth of 3.06% in the second quarter of the fiscal year, compared to double that rate recorded a year ago.

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