CPD has cast doubt over the economic growth data of the last year saying it was politically motivated

The Centre for Policy Dialogue (CPD) Sunday said the growth figure has simply become a number mismatching reality. The think-tank said there is no scope to use the number except for political purposes.

At a virtual press conference, CPD claimed that the provisional data and data from other organisations, used by the Bangladesh Bureau of Statistics (BBS) to estimate 5.24 percent GDP growth in the 2019-20 fiscal year, does not reflect the latest economic reality amid the Covid-19 pandemic.  

CPD said the economy had been experiencing a slump even before the pandemic struck; while the growth registered negative in the last three months of the 2019-20 fiscal year due to the virus spread.

"Against the backdrop, it is impossible that total growth crossed 2.5 percent in the last year," said the think-tank.

CPD Senior Research Fellow Dr Towfiqul Islam Khan presented the keynote papers at the conference. He said, "The Quantum Index of Industrial Production (QIIP) for large and medium manufacturing industries dropped 24.5 percent until last April."  

"Exports dipped by 51.2 percent in April-June. The 76.8 percent ADP [Annual Development Programme] implementation also dragged down the year-on-year spending in the pandemic. Therefore, the GDP growth estimation is not realistic," he added.         

He further said that the data of private sector credit growth, import of capital machinery, revenue collection, and operating expenditures of the government also does not support the reported growth.  

"For many countries, GDP has shrunk substantially. Pakistan in FY2020 (July-June) is likely to register negative 0.4 percent GDP growth. The economy of Vietnam during January to June of 2020 was able to grow by only 1.81 percent," he added.

"In view of the above, even if the Bangladesh economy could have grown by 2.5 percent in FY2020, it is likely to have been one of the fastest growing economies in the world," said Towfiq.

CPD Executive Director Dr Fahmida Khatun said though the growth rate was calculated based on economic performance of the first nine months before the pandemic arrived, it is being presented as the annual growth of the last year.

She claimed the BBS report was prepared on provisional and inconsistent data and does not reflect the virus crisis. Formulating policies for poverty alleviation, minimising inequality, labour and employment generation are not possible if an accurate GDP growth rate remains unavailable.  

"Such reports also could hinder foreign assistance," she commented.    

Dr Fahmida said the growth rate has merely become a number used for political purposes. The figure will not deliver anything if the poverty and inequality rates do not fall and employment is not generated.    

Dr Mustafizur Rahman, distinguished fellow of CPD, said five percent growth requires the economy to grow over 11 percent in the previous nine months; if 90 percent economic activities continue in the fourth quarter, which is unrealistic.

He continued, "What changes did the economy undergo suddenly that the investment rose even during the pandemic? And why was the growth slowed then; even with the heightened investments?"        

The government would not have been required to announce virus stimuluses if investment in the industrial sector and production had not dropped, he said.

CPD Research Director Khondaker Golam Moazzem said poverty would not have gone up if per capita income had actually risen as the BBS claims. And the government would not have been required to come up with cash incentives, relief and extra allocations in social safety.      

"Additionally, if the investment had remained intact, defying virus fallout, the government would not have had to declare employment and investment-friendly stimulus packages," he said.