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8/10/2019 GDP trends and employment, price stability of Bangladesh for last 5 years
1/4
The macroeconomic performance of Bangladesh for last 5 years
Any economy wants to achieve 3 macroeconomic objectives:
1. High output growth
2. High employment and low unemployment3. Price level stability
This paper is showing the macroeconomic performance of Bangladesh for last 5 years.
GDP:
During 2012-13, Bangladesh achieves GDP growth rate of 6.03%, and the provisional value of it
is around Tk 10379.9 crore in 2012-13. During this period, the most contributing sectors of GDP
are Agriculture, Industrial Sector, and other service sectors. Even in the period of economic
turmoil and global financial crisis, Bangladesh maintains a stable GDP growth around and above
6%. Though the GDP is increasing in every year yet almost one third of the 160 millionpopulation of Bangladesh live below poverty level. This growth in GDP is due to development in
garments and micro credit sector. Although three fifths of Bangladeshis are employed in the
agriculture sector, three quarters of exports revenues come from producing ready-made
garments.
Fiscal Year GDP (Billion
Taka)
GDP Growth
Rate
2007-2008 3217.3 6.19
2008-2009 3402.0 5.742009-2010 3608.4 6.07
2010-2011 3850.5 6.71
2011-2012 4090.5 6.23
2012-2013 4337.2 6.03
Base Year 1995-96
3217.3
3402
3608.4
3850.5
4090.5
4337.2
0
1000
2000
3000
4000
5000
GDP Trend
8/10/2019 GDP trends and employment, price stability of Bangladesh for last 5 years
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Employment:
The second macroeconomic objective is high employment and low unemployment. By using
unemployment rate we can get to know about the number of labor force remain unemployed.
Unemployment Rate in Bangladesh decreased to 4.50 percent in 2010 from 5.10 percent in 2009.
Unemployment Rate in Bangladesh is reported by the Bangladesh Bureau of Statistics. From
2003 until 2010, Bangladesh Unemployment Rate averaged 4.6 Percent reaching an all time high
of 5.1 Percent in December of 2009 and a record low of 4.3 Percent in December of 2006. In
Bangladesh, the unemployment rate measures the number of people actively looking for a job as
a percentage of the labour force. According to another estimate, every year some 2.7 million
young persons are becoming eligible for jobs whereas only about 0.7 million of them are getting
employment. Employed persons not only consume from the economy but they also contribute to
the economy through production activities and discharge of various services.
Price level Stability:
Price stability can be
identifying by inflation
rate. Inflation rate
means sustain increase
in general price level.
During the fiscal year
2012-13, the rate of
inflation in our country
is around 7.7%, which
is 2.92% lower than the previous year. According to the Bangladesh Bureau of Statistics, it is
observed that there has been an increasing trend of inflation from 2002-03 to 2007-08. In 2008-
09, the rate of inflation came down but in 2009-10 it started moving upward and continued in FY
2011-12 and become a double digit inflation rate, Whereas During the fiscal year 2012-13, it
goes down. Point to point inflation data using the 2005/06 base broadly shows that food inflation
6.19
5.74
6.07
6.71
6.236.03
5
5.5
6
6.5
7
GDP Growth Rate
Fiscal Year CPI Rate of Inflation
2007-2008 193.54 9.94
2008-2009 206.43 6.66
2009-2010 221.53 7.31
2010-2011 241.02 8.8
2011-2012 266.61 10.62
2012-2013 287.14 7.7
Base Year 1995-96
8/10/2019 GDP trends and employment, price stability of Bangladesh for last 5 years
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has risen steadily from 1.75% in September 2012 to 9.00% in December 2013. The reasons relate
to higher distribution costs due to the frequent nationwide strikes, and the fact that Indian food
inflation has also risen sharply which is also correlated with Bangladesh food inflation. On the
other hand, point to point non-food inflation is steadily declining, having peaked in October 2012
at 11.28% and has declined steadily to 4.88% in December 2013. This is due to the adherence to
the monetary program and the recent disruptions which caused a slowdown in economic activity
and lower consumer demand (see discussion on growth above). However, the rise in food
inflation is pushing up average inflation which bottomed out at 6.06% in January 2013, rose to
6.78% in June 2013 and is 7.53% in December 2013.
The tools of Macroeconomic Policy:
Monetary Policy: The policy is concerned with the supply of money and its price.
193.54
206.43
221.53
241.02
266.61
287.14
CPI
CPI
2965
3630
4405.2
5171.1
5791.1
0
2000
4000
6000
8000
Money Supply
MoneySupply 0
24
68
1012
Inflation Rate
InflationRate
9.94
6.66 7.31
8.810.62
7.7
0
2
4
6
8
10
12
Fiscal Year
Inflation Trend
Rate of
Inflation
8/10/2019 GDP trends and employment, price stability of Bangladesh for last 5 years
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Considering the data from 2008-09 to 2012-13, we see that with the increase in money supplyinflation rate is increasing as well. Because increase money supply increase the buying power so
that the value of money will decline, price of goods & services does increase as a result inflationrise in country.
Fiscal Policy: The policy in concerned with government expenditure and income. From theeconomic review of Bangladesh, the highest amount of government income comes from tax
revenue. Last 5years data showing that the amount of tax revenue is steadily increasing and in
2013 it was 13.5% of total GDP.
The large source of government expenditure are public expenditure (9.9% of total GDP, 2013)
and Annual Development program ( 5% of total GDP, 2013).