GDP base year going to be revised to incorporate more areas

The government is going to rebase and revise the GDP base year to 2015-16 from the existing 2005-2006, incorporating many more emerging areas of economic activity into the GDP calculation, reports UNB. Once measured according to the new base, the country’s GDP size and per capita income will go up, officials at the Bangladesh Bureau of Statistics (BBS) said. The changes in size of the real GDP will be mainly due to the inclusion of some new sectors in the calculation and price changes between the two periods. In Bangladesh, the usual practice was to revise GDP base year in every 10 years. In 2013, the base year was changed from 1995-96 to 2005-06. The size of GDP at current market price in the last fiscal year was Tk 19,560,557 million which was Tk 17,328,637 million in the fiscal year ’16. The BBS, tasked with the job, has already framed a project to rebase the GDP base year titled ‘Modernisation of National Accounts Statistics Project’ with an estimated cost of Tk 11.02 crore to be entirely borne from the national exchequer. The Executive Committee of the National Economic Council (Ecnec) in its meeting was apprised about the project. The BBS will implement the project by June 2020. Talking to UNB, a BBS official said the main objective of the project is to sensor modernisation of national accounts and related statistics in line with international guidelines and recommendations. The other specific objectives of the proposed project are to improve different methods of GDP compilation, updating GDP data series (base 2005-06) from 1972-73 to date, develop a database on GDP (base 2015-16) from 1972-73 to date using software. The BBS official also informed that the state-run organisation dealing with the statistics, will also conduct some surveys to explore the potentials of incorporating more new areas into the calculation of GDP. The areas where the surveys will be conducted include private commercial mechanised/non-mechanised land and water transport, occupied residential house and real estate services, tourism survey in hotel and restaurants. The statistical agency has already identified entertainment and publication as a new sector to be added in the GDP. Tourism, forestry, foftware and captive power has been identified as separate new sub-sectors. The entertainment and publication sectors drew huge investment in the last two years. Rebasing usually raises the size of the economy up by 10-20 per cent as well as helps raise the per capita income. According to the BBS official, Bangladesh’s service sector is growing and there are many new areas, like e-commerce, e-banking, and mobile banking, which are yet to be measured with the country’s GDP. The BBS had earlier completed the latest rebase as its calculation yardstick just four years back (in 2013) by fixing 2005-06 as new base period to replace 1995-96. The national statistical organisation, mandated for measuring GDP and other indicators, did its latest in 2013 after 13 years. Bangladesh’s per-capita income went up in line with the increase in GDP size. Bangladesh’s gross domestic product (GDP) growth hit 7.24 percent last year (FY), breaking all the previous records in the history of the country’s economy. Meanwhile, the per capita income has risen to $1,602, which was $1,466 in the previous fiscal year (FY16). It was $955 in 201-12 measured under the old base year 1995-96. GDP across the world has to be measured under the guidelines of the IMF (International Monetary Fund) to synchronise with the global economic activity.