GDP of Bangladesh
What is GDP?
GDP (gross domestic product) is the market value of all final goods and services produced within a countries border with the given time period (generally one year). The general GDP calculation formula of expenditure approach is Y=C+I+G+X-M where, C=consumption, I=investment, G=government expenditure, X=export and M=imports.
Example: suppose Bangladesh produces only two products within its border. Those products are 100 piece shirts and 100 tons of potato. So the total GDP of this country is 100 pieces of shirt × market price of every piece of shirt+ 100 tons of potato + market price of every ton of potato. In this way we can calculate a countries total GDP.
Determinants of the gross domestic products are land, labor, capital, technology and natural resources.
Importance of measuring GDP/ GNP in Bangladesh
- Standard of living: By calculating GDP/ GNI we can learn about a countries people’s poverty level, the standard of living, per capita income, etc.
- Measurement of economic condition: By GDP/ GNI, we can determine whether it is developed, developing, or underdeveloped.
- Proper planning: Develop a proper plan and implement those is a broad issue. If we have enough data from a sector, we can make a proper plan for this sector.
- Information: We need to know the real economic condition to improve the standard of living, taking development program, and to adjust overall economic management.
- Economic policy: As a developing country, Bangladesh needs to take accurate economic policy. To take accurate economic policy this nation must have accurate data about its agriculture, industry, business, transportation, and other sectors.
- Budget: The government of BD always makes its budget according to its economic condition. It is easy to set up a budget and implement this if we have enough data.
Current year GDP of Bangladesh
Bangladesh has the 39th largest GDP throughout the world. In 2019-20, its nominal GDP is TK 27,963,782 million while in the year of 2018-19 its GDP was TK 25,424,826 million. In the year 2019-20 total population of Bangladesh is 167.56 million. Bangladesh has a higher GDP than most other countries in the world.
GNI of Bangladesh
Gross National Income (GNI) is the total amount of goods and services produced by a countries citizens at home and abroad within a given time period. The total GNI of Bangladeshi people in 2018-19 is TK 2690921 million and in 2019-20 it is 29304262. Per capita, GNI in 2018-19 was TK 160440 and in 2019-20 it is TK 174888. GDP growth rate at constant market price in 2018-19 and 2019-20 is consequently 8.15 & 5.24. The current year’s GDP growth rate has decreased due to the COVID-19 pandemic.
GDP calculation has three approaches/ method, those are Production approach, Income approach and Expenditure approach. Bangladesh uses production approach and Expenditure approach
Per capita GDP of Bangladeshi people
Per capita domestic gross domestic product means every peoples annual GDP. If we divide the total GDP of a fiscal year with the total population, we get per capita GDP.
Generally, per capita GDP = (Total GDP of a fiscal year)/(total population of that time)
The per capita GDP of Bangladesh in 2018-19 was TK 153578 and in 2019-20 it increases to TK 166888.
By per capita GDP we have knowledge about a countries economic stability and standard of living. World Bank uses per capita GDP to estimate whether the country is developed or developing one. The developed nation has higher per capita GDP and the developing or least developed country has lower per capita GDP. The total population of Bangladesh in 2019 is 167.56 million.
Estimation of GDP in Bangladesh
Bangladesh Bureau of Statistics (BBS) calculates the GDP of Bangladesh every year. They calculate nominal GDP and real GDP every year.
GDP of Bangladesh at current prices 2019-20 (Million Taka)
|Agriculture & Forestry||2,053,983||2,273,525||2,481,190||2,651,815
|Mining & Quarrying||341,270||388,837||439,638||473,352|
|Electricity, Gas & water supply||262,435||293,361||320,867||343,184|
|Wholesale & retail||2,439,581||2,798,225||3,227,223||3,602,839|
|Hotel & Restaurants||193,182||221,228||252,335||284,491|
|Transportation, storage & communication||1,870,755||2,046,300||2,260,250||2,487,678|
|Real state, renting & business||1,445,392||1,664,189||1,904,866||2,124,984|
|Public administration & defense||784,407||902,277||989,574||1,117,992|
|Health & social work||389,867||440,642||520,063||587,742|
|Community & personal services||2,142,127||2,363,779||2,609,609||2,878,271|
|Tax less subsidy||1,058,923||1,221,555||1,225,915||1,262,275|
|GDP at current price||19,758,154||22,504,793||25,424,826||27,963,782|
GDP of Bangladesh at constant year price 2019-20 (Million Taka)
|Agriculture & Forestry||1,011,725||1,046,880||1,079,907||1,102,318|
|Mining & Quarrying||163,302||174,737||185,011||193,112|
|Electricity, Gas & water supply||138,196||150,892||165,347||175,527|
|Wholesale & retail||1,274,166||1,369,139||1,480,584||1,554,955|
|Hotel & Restaurants||68,198||73,159||78,696||83,782|
|Transportation, storage & communication||1,024,633||1,092,084||1,170,557||1,243,003|
|Real state, renting & business||589,973||619,357||651,728||683,312|
|Public administration & defense||336,152||364,628||387,951||411,307|
|Health & social work||168,040||179,841||201,050||221,065|
|Community & personal services||806,529||835,977||867,061||898,368|
|Tax less subsidy||382,521||409,087||422,314||424,941|
|GDP at current price||9,478,975||10,224,375||11,057,936||11,637,396|
BBS uses the Production method and Expenditure method to calculate the overall GDP of this country. To calculate GDP with the production method, they divide the whole economy into three sectors and fifteen (15) sub-sector. Those three sectors are Agriculture, industry and service. The total GDP share of those sectors is Agriculture 13.02%, Industry 31.13% and service 55.85%. Those sectors and sub-sectors are described below-
The total GDP contribution of agriculture in 2018-19 was TK 3,223,938 million and in 2019-20 it is TK 3,476,381 million. Agriculture has two subsector-
Agriculture and Forestry
Agriculture is the most important section of gross domestic product. It is very difficult to calculate this sector. Total GDP of 2018-19 was 2,481,190 and 2019-20 it is 2,651,815. This sector has three subsectors.
Gross Domestic Product of Bangladesh at Current Prices, 2016-17 to 2019-20(p)
Crops and Horticulture
This sector calculates the wholesale price of all produced vegetables and crops. In the 2019-20 fiscal year, produced vegetables and crops were worth TK 1,830,185 million.
BBS also calculates the GDP of this sector with the current year price. In the year 2019-20 total livestock was worth TK 466,733 million.
In Bangladesh, this sector has also lack of proper data. In 2019-20 total GDP of this sector was TK 354,897 million.
Fishes abound in this country. In GDP calculation, we calculate both sources of fishes, internal source and seas. In 2019-20 total amount of this sector is TK 824,565 million.
The industry is the most important sector of a countries development. The total GDP share of this sector of Bangladesh is TK 7,538,124 million in 2018-19 and TK 8,310,896 million in 2019-20.
Minerals & Quarrying
It is a sub-sector of the industry. Bangladesh is a country of silent minerals. Its main mineral is natural gas. In 2019-20, the total earning of this sector was TK 473,352 million. It has two sub-sector,
(a) Natural Gas and Crude Petroleum (TK 139,743 million in 2019-20)
(b) Other mining and Coal (TK 333,609 million In 2019-20)
Most exporting product of Bangladesh is ready-made garments. In the year 2019-20 total GDP contribution of this sector is TK 5,252,692 million. The GDP contribution of large, medium scale and small scale industry was consequently TK 4,298,534 million and TK 954,158 million.
Electricity, Gas and Water Resources
GDP of this sector calculated by services provided to this country. The government of BD privatize some parts of this sector’s important sector. The total GDP of this sector in 2019-20 was TK 343,184 million. The GDP contribution of Electricity, Gas and water separately are consequently TK 270,168 Million, TK 55,280 Million and TK 17,735 Million.
GDP of this sector calculated from the data of personal infrastructure and government. In 2019-20, total GDP of this sector was TK 2,241,668 million.
It is the largest sector by the GDP contribution of Bangladesh. In 2019-20, its GDP contribution is TK 14,914,231 million.
WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES, MOTORCYCLES AND PERSONAL AND HOUSEHOLD GOODS
In 2019-20, the total amount of GDP of the wholesale department is TK 3,602,839 million.
Hotel and Restaurant
BBS calculate this sectors total GDP with the produced goods and services and the total GDP of this sector was TK 284,491 million in 2019-20.
Transport, Storage & Communication
This is one of the biggest sectors of GDP calculation of Bangladesh. This sector is dominated by the private sector. This sector includes road transport, air transport, water transport, currier agencies, storage institutions, postal and Telecommunications. The total GDP of this sector Is TK 2,487,678 million by the year 2019-20.
GDP of this sector calculated by the total price of produced services. This sector includes banks, insurance and other financial institutions. In the year 2019-20 total GDP contribution of this sector was TK 1,011,297 million.
Real state, Renting and other Business activities
This sector includes the total GDP of earning by selling those products and services and a total GDP of this sector in 2019-20 is TK 2,124,984 million.
Public Administration and Defence
This sector calculates GDP by total spending in this sector. In 2019-20, the total spending of this sector was TK 1,117,992 million.
It is one of the most important spending sectors of the Bangladeshi government. The education sector also calculates total GDP by its spending and total GDP in 2019-20 was TK 818,936 million.
Health and social services
This sector also uses expenditure approach. In 2019-20, the total GDP expenditure of this sector was TK 587,742 million.
Community, social and Personal services
This sector also calculates its GDP by expenditure method. The total expenditure of this sector in 2019-20 was TK 2,878,271 million.
Expenditure based GDP
GDP of expenditure category at current price level 2019-20(p)
|Domestic demand (1)+(2)||20,781,861||24,395,224||27,089,356||29,766,601|
|Resource balance (3)-(4)||-1,033,704||-1,945,084 -||-1,554,170||-1,678,083|
|Gross Domestic Exp. at m.p.||19,748,157||22,450,140||25,535,186||28,088,518|
|Gross Domestic Product at m.p.(5)||19,758,154||22,504,793||25,424,826||27,963,782|
|Statistical Discrepancy (6)||9,997||54,653||-110,360||-124,736|
|Net factor income from abroad (7)||849,010||1,026,283||1,136,096||1,340,480|
|Gross National Income at m.p. (8)=(5)+(7)||20,607,164||23,531,076||26,560,922||29,304,262|
|Net current transfers from abroad (9)||3,530||4,950||2,148||2,111|
|Gross Disposible National Income (10)=(8)+(9)||20,610,694||23,536,026||26,563,070||29,306,372|
|Gross Domestic saving (11)=(5)-(1)||5,004,595||5,138,924||6,362,165||7,077,060|
|Gross National saving (12)=(10)-(1)||5,857,135||6,170,157||7,500,409||8,419,651|
|Current Account Balance (13)=(12)-(2)-(6)||-181,164||-913,851||-415,926||-335,493|
GDP of expenditure category at constant price level 2019-20(p)
|Domestic demand (1)+(2)||9,605,348||10,670,032||11,273,984||11,843,728|
|Resource balance (3)-(4)||-250,491||-590,269||-376,930||-379,460|
|Gross Domestic Exp. at m.p.||9,354,857||10,079,763||10,897,054||11,464,268|
|Gross Domestic Product at m.p.(5)||9,478,975||10,224,375||11,057,936||11,637,396|
|Statistical Discrepancy (6)||124,118||144,612||160,882||173,128|
|Net factor income from abroad (7)||407,313||466,261||494,118||557,853|
|Gross National Income at m.p. (8)=(5)+(7)||9,886,288||10,690,636||11,552,054||12,195,249|
|Net current transfers from abroad (9)||1,694||2,249||934||878|
|Gross Disposible National Income (10)=(8)+(9)||9,887,981||10,692,885||11,552,989||12,196,128|
Factors not included in GDP
- Gains or losses from capitals
- Intermediate goods or services
- Goods and services from free of charge
- No consideration of previous production and transaction
- Interest on public debt
- Illegal activities
Problems of measuring GDP/ GNP in Bangladesh
You have to face problems in measuring GDP in every methods.
- Self-employed: In BD, some people are self-employed or farmers work on their own land. They consume their own product. It is not possible to calculate the price of those.
- Product exchange system: The product exchange system is available in the villages of Bangladesh. The value of those exchangeable items is not the same. It is hard to identify those.
- Double counting problem: It is a common problem in every country. Sometimes, the value of a product can be calculated on the primary level and final goods. The calculation of double-time of a product creates the double-counting problem.
- House ownership: If the owner stays in his own house, he needn’t pay any rent. It is very hard to determine the rent of all houses.
- Wages in terms of product prices: In Bangladesh, we not only pay wages to laborers with money but also pay with products. It is tough to know the original value of those products.
- Devaluation of women’s work: most of the Bangladeshi women works as a housewife. They don’t get any wages for their work. Devaluation of women works to decrease the total GDP.
- Statistical error: In Bangladesh, statistical error is common. Here you may experience complexity in data collection, lack of training, lack of skilled data collectors, lack of cooperation between data-collecting institutions etc.
- Occupation: In Bangladesh, many people perform business with a job. It is hard to find accurate income for those people.
- Data manipulation: Many people of our country don’t want to dispose of their accurate income. They want to hoax income tax. So, they provide false information.
Solutions to these problems
- Develop a statistical system.
- Avoid double counting problem
- Make a stable price level
- Specializations of occupations
- Provide accurate data on international trade
- Stop corruption, speed money system.