GDP growth falls to 3.91% in Q4 of FY24
Bangladesh's economy grew at 3.91% in the final quarter of the fiscal 2023-24, compared to 6.88% in the equivalent period the previous year, on the back of slowdown across all the three sectors – agriculture, industries, and services.
The Q4 growth rate is also lower than that of the previous quarter of the last fiscal, according to fourth-quarter growth data released by the Bangladesh Bureau of Statistics (BBS) today.
The industrial sector saw the steepest decline – to 3.98% in April-June down from 10.16% of the year-ago period, with growth slowing in both construction and manufacturing.
According to BBS data, agriculture grew by 5.27% in April-June compared to 6.55% in the same period of FY23.
Growth in the services sector slowed to 3.67%, down from 4.82% in the final quarter of the year before, as wholesale and retail trade, financial and insurance activities, real estate, public administration, health, and education experienced declines.
Services account for more than a half of the country's GDP, while industries share about 35% and agriculture stands the lowest among the three with about 13% in the last quarter.
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Industrial sector lost its share to services and agriculture.
Economist Zahid Hussain said economic growth has slowed considerably in the industries and services sectors. Agriculture has apparently been a saviour, with an extraordinary 5.27% growth in the fourth quarter.
"Growth in industries and services suffered on both the demand and supply sides. Persistently high inflation has eroded consumer purchasing power, as nominal wage growth fell well short of inflation. Energy shortages and constrained imports depressed capacity utilisation in both industry and services," he told The Business Standard.
The then Awami League government had initially projected a 6% growth rate for FY24, which was revised down to 5.80%. The International Monetary Fund had forecast GDP growth at 5.4%, while the World Bank projected 5.2% for the fiscal year.
"The recession in growth is projected to continue, as evident from the projections for FY25 we recently saw from the World Bank, IMF, and ADB. The economy is navigating a political transition, which comes with inherent uncertainties," said Zahid Hussain, who was lead economist at the World Bank's Dhaka office.
He said contractionary monetary and fiscal policies could help growth if they have a visible effect on inflation going forward, adding, "The economy may still struggle to turn around if the law and order is not normalised, energy supply is not enhanced, and structural reforms are not geared up."
According to the BBS, following the IMF's Quarterly National Accounts Manual, when making the first GDP estimate for a quarter, not all updated information is available, making it necessary to revise the estimate once additional information is obtained later. As a result, there are some differences in the growth figures from the previous quarter.
The BBS also noted that, since the fourth-quarter estimate uses more updated data on a quarterly basis, there is a difference between the combined GDP of the four quarters estimated quarterly for the same fiscal year and the provisional annual GDP estimate for FY24, which has already been released.
According to BBS data, GDP growth at current prices is estimated at Tk13.784 lakh crore in the April-June quarter, compared to Tk12.161 lakh crore in the same period a year earlier.
