DHAKA: Bangladesh’s economy has grown at its highest rate in decades, driven by resurgent exports and a strong performance by the usually sluggish farm sector, officials said Tuesday.
The economy expanded by 6.66 percent in the 12 months to June, the fastest pace since the early 1970s when it was boosted by recovery following Bangladesh’s victory in its war of independence with Pakistan.
The Bangladesh Bureau of Statistics, which announces annual growth figures a month before the country’s financial year ends in June, also revised its figures for 2009-10 growth upwards to 6.07 percent from a provisional estimate of 5.54 percent.
“The 6.66 percent growth is the highest in recent decades,” BBS chief Shahjahan Ali Molla told AFP.
An official at the Bangladesh Bureau of Statistics said it was the fastest rate of growth for Bangladesh since 1973-74 when the economy grew by 9.59 percent.
Bangladesh has targeted growth of seven percent for the next financial year beginning on July 1.
Last year’s growth was powered by the country’s resurgent manufacturing sector and higher crop yields, the secretary of the government’s general economic division, Shamsul Alam, told AFP.
“Manufacturing was driven by an impressive 42 percent export growth in garment products. Agriculture also shone because of record outputs of rice, wheat and some other crops, thanks to favourable weather,” he said.
The World Bank had projected a 6.3 percent growth rate for Bangladesh, with a population of 150 million people, which is still one of the world’s most impoverished nations, with nearly 40 percent of people living below the poverty line.
According to the statistics bureau, manufacturing expanded by 9.51 percent overall with major industries clocking 10.41 percent growth as garment shipments soared following a dramatic surge in orders diverted from an increasingly costly China.
The country has been benefited from rising wages in China that prompted many of the world’s top retailers such as Wal-Mart to go bargain-hunting in Bangladesh, analysts said.
Garment export growth was just three percent in the 2009-2010 as demand for low-cost Bangladeshi goods fell sharply in the wake of the global financial crisis.
But the country’s total foreign trade is now expected to grow 40 percent to a record $50 billion dollars in this financial year.
“Manufacturing and agriculture have done tremendously well this year,” said Ahsan H. Mansur, a former senior official of the International Monetary Fund and the head of local think-tank Policy Research Institute.
“Garments, which account for 40 percent of our industrial activities, alone added two percentage points to growth,” he said, adding the country’s overall growth target of seven percent for the next financial year was reasonable.
At the weekend, the government unveiled a record $6.4 billion development spending for the next year to boost the economy. Power generation got the highest allocation of $1.2 billion in a bid to ease crippling electricity cuts, which have for years taken a toll on manufacturing growth.