Bangladesh’s GDP slows

AFP DHAKA May 23, 2012

Bangladesh’s economy is forecast to have grown at 6.32 percent in the fiscal year to June, a slowdown from last year’s expansion, dragged by a “saturated” farm sector, officials said Wednesday.

The government had projected seven percent growth in Gross Domestic Product (GDP) for the 2011-12 financial year, but a meagre two percent expansion in the key agriculture sector means the growth has fallen short of expectations.

“The Bangladesh Bureau of Statistics (BBS) has estimated that the economy will grow at 6.32 percent in the current financial year,” the government’s statistics secretary Riti Ibrahim told AFP.

The BBS revised its figures for 2010-11 growth upwards to 6.71 percent from a provisional estimate of 6.66 percent.

Ibrahim said industries remained the main driver of growth, expanding by around 10 percent while services sector, the largest component in the impoverished economy, grew at six percent.

“But growth in the farm sector has slowed down to around two percent. The sector is saturated. Farm productivity has reached an optimum level as we are losing huge areas of farmland every year due to growing population,” she said.

The BBS growth estimate was higher than the 5.5 percent forecast made by the International Monetary Fund (IMF), but it is in line with the projections made by the Asian Development Bank and the World Bank.

“Given the global scenario, it’s decent growth compared to other developing nations,” World Bank economist Zahid Hussain told AFP.

But he warned that the country would face future challenges if there was no significant improvement in its infrastructure and in tackling the acute energy crisis.

Bangladesh will announce its annual budget on June 7.