Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 717 Sun. June 04, 2006  
   
Front Page


Politicised GDP growth rate


Centre for Policy Dialogue (CPD) yesterday said governments estimate higher GDP growth rate in the election years to show a bright picture of economy but later the rate is revised downward when a new government assumes office.

The revised GDP estimates were lower than the preliminary ones in eight out of 11 fiscal years between FY95 and FY05. A 5 per cent difference between the estimate and revised rate is acceptable, but the differences were wider.

"There is a tendency of politicising the GDP growth rate in the election years," Debapriya Bhattacharya, executive director of the CPD, said presenting a report on the state of country's economy in FY 2006 at its office in the capital.

Raising questions about the government methodologies of calculating the growth rate, Debapriya said: "How does the government estimate the growth rate when necessary data of investment and employment are not available?"

He said a common trend was observed during the last two election years that the outgoing government's higher GDP (Gross Domestic Product) performances were revised downward by the new government.

In the election years the governments revise the growth rate upward, Debapriya said adding that the revised estimate of GDP was higher than the preliminary one in the FY 2000 before 2001 general election.

Similar tendencies were found during the last two years -- FY 04 and FY 05. "GDP was revised upward in FY 04, the first ever above 6 per cent," he said.

However, GDP growth rate for FY01was significantly revised downward from 6.04 per cent to 5.27 per cent by the new government.

Bangladesh Bureau of Statistics (BBS) in its preliminary estimation predicts 6.72 per cent growth rate for FY06. "What will happen to the preliminary estimate of FY06 if a new government takes office?" asked the CPD executive director.