Bangladesh's services sector grows fast to 54pc of GDP
Bangladesh's services sector has expanded by nearly 90 per cent over the past five years to Tk 18.98 trillion, a latest official count shows.
The size of the services sector stretching over accommodation, education, financial, transport, and wholesale and retail trading stood at Tk 18.98 trillion or nearly 54 per cent of the Tk 34.84 trillion nominal GDP (gross domestic product) in the fiscal year 2020-21. It was simply Tk 10.06 trillion in the fiscal year 2015-16, according to Bangladesh Bureau of Statistics (BBS).
This picture of the services sector came up in the new GDP measurement based on the new base year-2015-16.
However, some leading economists have difference of views over such a big leap in the services sector in the past five years since the fiscal year 2015-16. A section of economists say there was no qualitative development in the services sector during the period under review.
Human-health and social-work activities saw the fastest growth to Tk 1.186 trillion till the last fiscal year, up by 117 per cent from the 2015-16 mark.
It was followed by administrative and support-service activities, growing by 90.48 per cent to Tk 271.33 billion.
The other sectors which saw tremendous expansion are financial and insurance activities, accommodation and food services, wholesale and retail trade, repair of motor vehicles, transportation and storage as well as real estate.
The least growth in double digit was in professional, scientific and technical activities. It was nearly 61 per cent in the fiscal year 2020-21 over 2015-16.
Dr Ahsan H. Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), argues about the quality of growth. "I am not going into debate about its size, but whatever growth has been achieved is not qualitative growth," he told the FE.
He says if there had been growth in tourism, transport and education, it would mean the real development.
The growth in the informal economy was enormous. "The number of street vendors and makeshift shops has increased significantly," he says.
"Such a type of informal economy does not indicate a healthy sign of the economy." GDP measures such informal sectors through different ratios and co-efficient.
He feels e-commerce and technology-based services should have increased further. Whatever has been made is now a matter of scams and cheating activities by a number of e-commerce service-providers.
Dr Zahid Hussain, a former lead economist at the Dhaka office of the World Bank, harbours some doubts over the statistics as there was no detail or breakdown of the statistics.
He says the GDP at market prices grows at a time when it's rebased. The areas or activities added to the economy should be transparent through BBS publications.
"They provide us merely some figures or statistics," commented the economist about the quality of data.
However, Bangladesh's GDP at market prices stood at Tk 34.84 trillion with the nominal growth rate at 9.89 per cent in the fiscal year 2020-21 in consideration of the new base year.
The GDP consists of three major sectors: services, industry and agriculture. Industry sector grew by 76 per cent and agriculture 48 per cent during the last five years.
The size of agriculture was worth Tk 4.06 trillion in the fiscal year 2020-21 and the industry worth Tk 11.36 trillion.