Southeast University

Department of Computer Science & Engineering

Report On :The main GDP drivers of

Bangladesh and the impact of
the Covid-19 pandemic on the
GDP of 2020
Reported By :Lamisa Sobnom Faria
Student ID :2019000000097
Course Title : Introduction to Economics
Course Code : ECO 461.3
Date of submission: 17 January,2021
Reported To : Fahima Kabir
Lecturer,Southeast University

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Contents

The main GDP drivers of Bangladesh 3

Impact of the Covid-19 pandemic on the GDP of 2020 11

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 GDP is the final value of the goods and services produced within the
geographic boundaries of a country during a specified period of time,
normally a year. GDP growth rate is an important indicator of the economic
performance of a country.
The full meaning of GDP is Gross Domestic Product.GDP is important
because it gives information about the size of the economy and how an
economy is performing. The growth rate of real GDP is often used as an
indicator of the general health of the economy. In broad terms, an increase
in real GDP is interpreted as a sign that the economy is doing well.Total
GDP can also be broken down into the contribution of each industry or
sector of the economy.The ratio of GDP to the total population of the region
is the per capita GDP and the same is called Mean Standard of Living.GDP
can be determined in three ways, all of which should, theoretically, give the
same result. They are the production (or output or value added) approach,
the income approach, or the speculated expenditure approach.The most
direct of the three is the production approach, which sums the outputs of
every class of enterprise to arrive at the total. The expenditure approach
works on the principle that all of the product must be bought by somebody,
therefore the value of the total product must be equal to people's total
expenditures in buying things. The income approach works on the principle
that the incomes of the productive factors ("producers", colloquially) must
be equal to the value of their product, and determines GDP by finding the
sum of all producers' incomes.

The main GDP drivers of Bangladesh

The economy of Bangladesh is a developing market economy.It's the 35th
largest in the world in nominal terms, and 30th largest by purchasing power
parity. In the first quarter of 2019, Bangladesh was the world's seventh
fastest growing economy with a rate of 7.3% real GDP annual growth.
Dhaka and Chittagong are the principal financial centers of the country,
being home to the Dhaka Stock Exchange and the Chittagong Stock
Exchange. The financial sector of Bangladesh is the second largest in the
Indian subcontinent. Bangladesh is one of the world's fastest growing
economies.The main GDP drivers of Bangladesh are : Agriculture,Industry

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& service.As of 2020, Bangladesh's GDP per capita income is estimated as
per IMF data at US$5,139 (PPP) and US$2,064 (nominal).

Sectors of GDP

Sectoral 2015-16 2016-17 2017-18 2018-19

Shares of
Gross
Domestic
Product
(GDP) of
Bangladesh

A) 14.77 14.17 13.82 13.32

Agriculture

Agriculture 11.55 10.98 10.68 10.25

and forestry

Crops & 8.15 7.69 7.48 7.12

horticulture

Animal 2.01 1.93 1.86 1.79

Farmings

Forest and 1.39 1.37 1.34 1.35

related
services

Fishing 3.22 3.19 3.14 3.07

B) Industry 28.77 29.32 30.17 31.15

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Mining and 1.73 1.83 1.83 1.82
quarrying

Natural gas 0.65 0.64 0.62 0.58

and crude
petroleum

Other mining 1.08 1.18 1.2 1.24

& coal

Manufacturin 17.91 18.28 18.99 19.89

g

Large & 14.58 14.93 15.63 16.37

medium scale

Small scale 3.34 3.35 3.36 3.52

Electricity, 1.45 1.4 1.38 1.33

gas and
water supply

Electricity 1.12 1.09 1.07 1.04

Gas 0.26 0.24 0.24 0.22

Water 0.07 0.07 0.07 0.07

Construction 7.67 7.81 7.98 8.12

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C) Service 56.46 56.5 56 55.53

Wholesale
and retail
trade; repair
of

motor 13.01 13.05 13.15 13.34

vehicles,
motorcycles
and personal
and
household
goods

Hotel and 1.04 1.03 1.04 1.04

restaurants

Transport, 10.27 10 9.61 9.34

storage &
communicatio
n

Land 7.76 7.64 7.38 7.22

transport

Water 0.62 0.59 0.55 0.51

transport

Air transport 0.08 0.07 0.07 0.07

Support 0.49 0.47 0.46 0.44

transport
services,

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storage

Post and Tele 1.32 1.24 1.16 1.1

communicatio
ns

Financial 3.86 3.91 3.93 3.89

intermediatio
ns

Monetary 3.27 3.34 3.37 3.35

intermediatio
n (banks)

Insurance 0.38 0.36 0.34 0.34

Other 0.21 0.21 0.22 0.21

financial
auxiliaries

Real estate, 7.51 7.73 7.82 7.87

renting and
business
activities

Public 4.05 4.19 4.24 4.09

administration
and defence

Education 2.82 3.04 3.03 3.02

Health and 2.11 2.08 2.07 2.15

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social works

Community, 11.79 11.46 11.11 10.78

social and
personal
services

source:Economy of Bangladesh

Bangladesh recorded one of the fastest growth rates in the world in the
past few years with a stable economic performance that has helped to
reduce poverty and social inequalities. GDP growth was estimated to have
reached 7.9% in 2019 and is forecast to fall to 2% in 2020 due to the
outbreak of the COVID-19 and pick up to 9.5% in 2021, according to the
updated IMF forecasts from 14th April 2020. The post-pandemic global
economic recovery and the private consumption boosted by strong
remittance flows from the Bangladeshi diaspora around the world are
expected to be the key drivers of growth in 2021.

Economic Main Indicators

Main Indicators 2018 2019 2020 (e) 2021 (e) 2022 (e)

GDP (billions 274.01 302.53 317.77 338.39 372.56

USD)

GDP (Constant 7.9 8.2 3.8 4.4 7.9

Prices, Annual %
Change)

GDP per Capita 1e 1e 1 1 2

(USD)

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General 34.6 35.8 39.6 41.9 42.3
Government
Gross Debt (in %
of GDP)

Inflation Rate (%) 5.8 5.5 5.6 5.9 5.5

Current Account -9.57 -5.10 -4.85 -9.33 -5.08

(billions USD)

Current Account -3.5 -1.7 -1.5 -2.8 -1.4

(in % of GDP)

Source: IMF – World Economic Outlook Database, October 2020

Impact of Covid-19

Figure:Real GDP growth (Percentage)

Source: International Monetary Fund

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 Figure:The stock market trend of the first quarter in 2020

FIGURE: Number of workers at risk of losing employment by sector (In

millions)

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 FIGURE: COVID-19 impact on weekly flight numbers

Source: The Daily Star

Impact of the Covid-19 pandemic on the GDP

of 2020
According to the Bangladesh Bureau of Statistics (BBS), Bangladesh GDP
grew by 5.24 per cent during 2019-20 raising the per capita income by
US$155 to US$2,064. This growth rate has been achieved when the global
economy is contracting, in particular the whole developed world where
according to the Organisation for Economic Cooperation and Development
(OECD) major economies are expected to contract by 2.4 per cent in
2020.The outbreak of the Covid-19 pandemic created highly uncertain
circumstances for households, businesses and governments around the
world including Bangladesh. While the cost of the shutdown could be
substantial, the cost of not shutting down the economy would have been
even higher. This situation will continue until an effective vaccine or
treatment becomes available. People in Bangladesh, like elsewhere are in
an unprecedented situation where the economy is struggling to recover

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from shutdowns and partial shutdowns. In such circumstances people are
struggling to make sense of the published data, which often has a
substantial lag.

Bangladesh reported the first cases of Covid-19 in the early March and in
response to widespread concern regarding the intensity and duration of the
pandemic, the economy was initially shut down from the mid -March to the
end of May. Thereafter some partial openings to complete shutdowns in a
localised fashion have continued depending on the intensity of the
pandemic. But since early August most restrictions have been lifted.
Therefore, the impact of four months of economic slowdown from March to
June is reflected in this published figure assuming July, 2019 to February,
2020 economy operated as normal and was on track with the projected
growth rate of 8.2 percent for the period under consideration. But available
data on macroeconomic aggregates such as household consumption, trade
and private investment do not support that the economy was tracking along
the projected growth rate path before the onset of the pandemic.
According to the Bangladesh Institute of Development Studies (BIDS), 164
million have joined as new poor in the country due to Covid-19. A recent
survey conducted by the International Centre for Diarrheal Disease
Research (ICDDR) in Bangladesh found that during the lockdown
(March-May, 2000), 91 percent of sample families considered themselves
to be financially unstable. 47 per cent saw their earnings drop below the
international poverty line of Tk160 (US$1.90) per person per day, 70 per
cent experienced food insecurity and 15 per cent either ran out of food or
remained hungry or missed meals (FE, August, 27).
The Bangladesh economy is also currently facing the prospect of
plummeting remittances. It is estimated that migrant remittances have
declined by a quarter during the pandemic globally. Migrant remittances
constitute about 9 percent of Bangladesh GDP. A large number of
expatriate workers are returning home, further adding to the worsening
unemployment situation.

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 Breakdown of
Economic
Agriculture Industry Services
Activity By
Sector

Employment By 37.7 21.6 40.6

Sector (in % of
Total
Employment)

Value Added (in 12.7 29.6 52.8

% of GDP)

Value Added 3.9 12.7 6.8

(Annual %
Change)

Source:world Bank

The Bangladesh economy is also currently facing the prospect of

plummeting remittances. It is estimated that migrant remittances have
declined by a quarter during the pandemic globally. Migrant remittances
constitute about 9 percent of Bangladesh GDP. A large number of
expatriate workers are returning home, further adding to the worsening
unemployment situation.
Therefore,people are faced with many problems in that pandemic situation.
The crisis once again brings to the fore the importance of bringing the virus
under control to enable the people to feel safe and the economy to start
moving forward again.For that pandemic it makes a direct impact on GDP.

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