Bangladesh has introduced a new base year of calculating economic growth to accommodate contribution of the emerging sectors in the basket. The estimates will now be based on 2005-06, instead of 1995-96.
“It is necessary to change the GDP base year to include financial information of various new sectors that are contributing to the economy,” Finance Minister AMA Muhith said, after launching the new base year at a meeting in Dhaka yesterday.
The country’s economy grew 6.18% in the last fiscal year in accordance with the new base year, which is 0.15 percentage point higher than 6.03% as per the old base year (1995-96), according to latest data Bangladesh Bureau of Statistics released at the function.
Per capita income also increased to $1044 commensurate with the expansion of GDP (Gross Domestic Product) in 2012-13. As per the old base year, the per capita income was estimated at $923 in 2012-13. “Economy is expanding… no doubt about it. The statistics is ‘above politics’,” the minister told reporters, in response to a question. “This is the reflection of better performance in social sector.”
He said the growth has been measured meticulously, which must be acceptable to all.
To calculate the GDP as per the new base year, new items mainly from agriculture, industry and services sectors have been included, the meeting was told.
The agriculture sector alone contributed 24 new crops, making the total number of agricultural products in the basket to 124 while nearly 150 new products and services added from the industry and services sectors.
As a result, gross value addition from the agriculture sector increased by 9%, industrial sector 5% and services sector 16%. New products like green coconut, poultry, mineral water, mining, mobile phone services and power subsectors are added to the GDP calculation.
In the financial intermediation sector, the new entrants are micro-credit, cooperative banking, Central Depository Bangladesh Limited, insurance agents and house building financing.
The saving-investment gap will fall sharply following the rise in investment in new base year calculation, said BBS, keeping the details to release later.
Planning Minister AK Khandker said updating the base year through revising the GDP estimates has become essential for reasons, including newer economic activities, progressive expansion and downsizing of different industries and economic sectors over the years.
It would facilitate the government to have a clear idea about the country’s economic trend and nature because of rebasing the year and inclusion of new products, he said.
Earlier a technical committee, led by its chairman Professor Wahiduddin Mahmud, had approved the new base year with the revision of products and services those are considered for calculation of the GDP.
In Bangladesh, the GDP base year is generally is revised every 10 years while India revising it every five years to improve the quality and accuracy of data in an updated manner as far as possible.
