8/10/2019 Macroeconomic Performance of Bangladesh

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Macroeconomic Performance of Bangladesh

Achievement of economic success is burning issue in the developed countries as well asdeveloping countries also. How economic success can be measured? To evaluate the

performance of an economy, there are a few key variables such as gross domestic product(GDP), the unemployment rate and inflation rate work as instruments to achieve themacroeconomic goals. Let see, how the key instruments are used to measuring theeconomic performance of Bangladesh.

The most comprehensive measure of the total output in an economy is the gross domestic product (GDP). Economic growth in Bangladesh and other countries is calculated as the percent change in the GDP from one year to the next. It measures whether production hasincreased or decreased, and by how much. Looking across many countries and over long

periods of time, the average rate of economic growth is about 2-3 percent per year. That

changes from year to year as theeconomy goes through recessionsand expansions. However, if aneconomy routinely grows atabout 5 percent or more per year,this is a substantial rate ofeconomic growth. Economicgrowth of 7-8 percent isextraordinary. The substantial

rate of GDP attracts the foreigninvestors. Last two years,Bangladesh faces lower GDP growth than 2011 although it does not decline below 6

percent. While the whole world faced economic recession in 2007-08, Bangladesh had keptits growth rate above 5 percent. It is a great achievement as a developing country likeBangladesh.

Consumption level of Bangladeshi people is increasing day by day that leads to lowsavings. National savings decreases consecutively form 2011 to 2013.Investment dependson savings. Increasing rate of investment leads to high output growth, low unemploymentmeans high employment rate. Both public and private investment rises year to year. Privateinvestment contributes more than public sector. If we are able to increases the portion ofthe public sector in investment, we will be more strengthen and stable to face the economicdownturns as well as we will be able to reduce the trade deficit to others countries.

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8/10/2019 Macroeconomic Performance of Bangladesh

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Trade deficit represents the imports amount exceeds the export amount. Trade deficit isrising year to year in our country because of less productivity compare to increasing

population rate, political turmoil and instability. Other reason could be more dependenceon service sector rather than production or manufacturing sector. Interestingly, Last yeartread deficit reduce to 299.1 billion from 632.4 billion. It happens because of increasingmanufacturing production from 18.96 percent to 19.54 percent and rising export. So, it isthe right time Bangladesh to give more emphasis on manufacturing sector as a developingcountry.

Government incomes of Bangladeshi residents are rising year to year due to participate innational revenue, pay tax. In last year, Government income has risen 12.5% to 13.5%.Thistrend has shown since last consecutive years. If this trend will continue, Bangladesh cangive its budget my managing its fund. We hope we there will no budget deficit.

The contribution of manufacturing sector in GDP is gradually increases form18.42% in2011, 18.96% in 2012 to 19.54% in 2013 respectively. If it increases in same trend, itresults higher output, higher employment rate as well as contributes in GDP significantly.

The contribution of agriculture sector in GDP falls down year to year. In 2003 contributionof agriculture sector was 18.22% but it goes down to 14.33%. Out of total labor force still45 % labor force employ in agriculture sector. It should not be a right time to convertwhole economy in service sector based. Government should come forward to tackle theissue in no time.

Taking recent economic and financial sector developments into account the MonetaryPolicy stance in H2 FY14 (half two of FY 14) emphasizes much on controlling inflationinstead of growth, and targets a monetary growth path from that aims to bring averageinflation down to 7 percent. Food inflation has risen steadily from 1.75% September 2012to 9.00% December 2013.The reason relate to higher distribution cost due to frequentnationwide strikes and the fact that Indian food inflation has also risen sharply which isalso correlated with Bangladesh food inflation.

International pressures, Inflation, political instability, environmental calamities affect

Bangladesh economy every year although it is surprising that it keeps the GDP growthabove 5.55% which is praise worthy in whole world. It is achieved because of hard-working human resources of Bangladesh. After all, economic performance of Bangladeshis really commendable. We hope that we will lead the world in future.