Adjust inflation, exchange rates when calculating GDP

Ascertaining the real economic output per person in Bangladesh is not possible without adjusting the current inflation and international exchange rates when evaluating the country's GDP per capita, according to economists.

"We have to adjust the current inflation rate while also taking the average exchange rate of the last four to five years into consideration if we want to get the real picture when measuring GDP per capita," said Syed Mainul Ahsan, professor emeritus of Concordia University in Montreal.

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He was speaking at a seminar at the Bangladesh Institute of Development Studies (BIDS).

When the country registers economic development, the price of all goods and services rises while the value of money falls. However, these two factors are not taken into consideration when calculating the GDP per capita.

"One issue is that the value of money is decreasing but we do not see it while another is that the rising commodity prices are ignored," Ahsan said. "As a result, the actual picture does not come," he added.

Binayak Sen, director general of BIDS, said his organisation does not usually look too closely into the GDP measurement process by using per capita income distribution or household distribution data.

"The two ways are quite different and will give us separate outcomes," he added.