The Gross Domestic Product (GDP) growth rate for Bangladesh in the second quarter (October-December) of the current fiscal year sharply declined to 3.78%, marking a significant drop from the 7.08% recorded during the same period in the previous fiscal year, as reported by the Bangladesh Bureau of Statistics (BBS) in its quarterly GDP growth report.
Analysis of the report found a deceleration of 2.23 percentage points of growth from 6.01% in the first quarter of the current fiscal year, primarily attributed to a sluggish pace in the industrial sector, influenced by various pressures and challenges.
The report unveiled that the industrial sector saw a meager growth rate of 3.24% during the October-December period of the current fiscal year, starkly contrasting with the robust 10% growth witnessed in the corresponding period of the previous fiscal year and representing merely one-fifth of the impressive 14.49% growth recorded during the same period in the fiscal year 2021-22.
The growth for the service sector also halved to 3.06% in the second quarter of the current fiscal from 6.62% in the same period of the last fiscal. Whatever the agriculture sector growth increased slightly from 4.22% of the Q2 in the last fiscal to 4.65% in the Q2 of the current fiscal year.
About 90 percent of the country's total output comes from the industry and services sector, according to BBS sources. The major decline in growth in these two sectors has had inversely impacted on the entire GDP, said experts and economists.
Entrepreneurs have cited a multitude of factors contributing to increased production costs for goods and services. These complications include fluctuations in exchange rates, a crisis in dollar availability for importing materials, and rising expenses in gas, electricity, and transportation.
Concurrently, aggregate demand has been suppressed by the diminishing purchasing power of consumers grappling with the escalating inflation trend.
Consequently, the industrial sector's production has declined, facing constraints from both demand-side pressures and supply-side limitations.
The BBS report further revealed that the size of the GDP in terms of current price reached at Tk1309894.9 crore in the second quarter of the current fiscal year, which was Tk11,26,948 crore at the same period in the last fiscal year. The GDP calculated with the market price increased by 16.23%.
On the other hand, GDP calculated with the fixed price reached at Tk8,45,800.6 crore from Tk8,14,985.6 crore from the previous fiscal marked only 3.78% of growth.
Dr. Fahmida Khatun, executive director of the Center for Policy Dialogue (CPD) said the industrial sector faced sluggish growth in the last quarter comparing with a regular growth of over 10% for the past few years. Overall reduction in growth is reflection of lower industrial growth.
"There was a large growth in GDP at market prices, GDP at constant prices increased slightly. This shows that even though industrialists cannot increase production much, consumers have to spend more money," she said and explained that higher inflation played a vital rule to prevent economic growth.
Anwar Ul Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries (BCI) and the former president of the BGMEA said the cost of doing business increased manifold for different reasons.
Many micro, small and medium enterprises used to offer jobs to people but now they cannot run their units because of the high cost of business, he said.
