Bangladesh economy is going to cross a record 8 percent growth mark in the current fiscal year, powered by high performance in manufacturing and service sectors, the finance minister has claimed.

Despite a dip in the farm sector performance, the GDP growth in 2018-19 is likely to be 8.13 percent, up from 7.86 percent the previous year, according to the provisionary figure from the Bangladesh Bureau of Statistics (BBS).

Finance Minister AHM Mostafa Kamal released the data yesterday after a meeting of the National Economic Council at the planning ministry.

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“All 15 components of the GDP have increased, especially the significant rise in export receipts and investment. As a result, we may cross 8 percent growth,” Kamal said.

“We are expecting a double-digit growth in the next three years,” he added.

Zahid Hussain, lead economist at the World Bank's Dhaka office, agrees that the recent growth has been driven by manufacturing and construction.

Ahsan H Mansur, executive director of the Policy Research Institute, a think-tank, said the revenue collection and private sector credit growth did not match the government estimate.

“The GDP growth is not consistent with the revenue collection, which is weak and does not match the economic growth,” Mansur said.

Normally, the private sector credit growth indicates economic growth, but here too the performance is weak, the economist said.

The economy has been growing riding on manufacturing growth, and the manufacturing sector is mainly export-led. But the export growth is below the GDP growth estimated by the government, he noted.

Bangladesh's export is mainly dependent on garment sector. But in the first eight months of the current fiscal year, garment export grew by 14.17 percent against the expectation for 20 percent, he pointed out.

Also, private investment increased marginally by just 0.1 percentage point of the GDP while public investment by 0.2 percentage points, he said.  

The ratio of private investment in the national GDP was 23.4 percent in the current fiscal year, according to the provisional data from the BBS. Last fiscal year, the ratio was 23.26 percent.

On the other hand, the ratio of public investment in the national GDP was 8.17 percent, which was 7.97 percent in the previous fiscal year.

“The growth therefore appears to have come from increased efficiency of capital as indicated by a decline in the incremental capital-output ratio from 3.97 last year to 3.88 this year,” Zahid said.  

“Explaining the increased efficiency of capital is a bit of a puzzle, particularly when viewed against Bangladesh's rather low and almost unchanged ranking on the Ease of Doing Business and Global Competitiveness Index indicators,” he added.

The government's provisional estimates show the industries sector grew 13.02 percent this fiscal year compared to 12.06 percent the previous year.

The provisional figures are based on data from the last six to eight months. The final estimate will be disclosed in September.

The services sector grew 6.5 percent this year, up from 6.39 percent a year ago, according to the BBS data.

Data also show that the farm sector grew 3.51 percent in the current fiscal, down from 4.19 percent last year.

Talking to reporters, the finance minister said Bangladesh had been continuously achieving GDP growth at over 7 percent for the last several years. And last year, the growth rose close to 8 percent despite the global economic volatility.

This year's high GDP growth is the outcome of the last several years' continued growth, he said.