Kamal defends spike in GDP growth

Finance Minister AHM Mustafa Kamal yesterday defended the unexpected spike in gross domestic product (GDP) growth in the fiscal year of 2020-21, giving credits to expansionary monetary policies and progress in all economic indicators.

"Some would say our evaluation process is flawed and that we show inflated figures, but no, it is never, ever like that," he said.

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His comments came two days after the government disclosed that Bangladesh's GDP pulled off a stunning 6.94 per cent growth in 2020-21 when the initial estimate was 5.43 per cent.

"What we have achieved and where we are now, you can witness with your own eyes. There is no negative growth figure anywhere," Kamal told reporters after a meeting of the cabinet committee on purchase.

The government sets the GDP growth rate and per capita gross national income in accordance with a method formulated by the International Monetary Fund, known as the 'System of National Accounts 2008', which is also followed by other countries, Kamal added.

The minister went on to say that the adoption of an expansionary monetary policy worked effectively at a time when no other government had the courage to implement such measures due to Covid-19.

"We executed the task rightly," he said.

"While the economy of other countries contracted, we were on the right track. Our economy never fell and we remained functional even amid the pandemic."

"We have been acclaimed globally for this as there was no [high] inflation and the exchange rate remained stable despite all the economic uncertainty," he added.

In addition, Bangladesh's revenue growth was around 15 per cent, which was very difficult to achieve given the circumstances.

Exports grew 30 per cent while imports were also in good shape in 2020-21.

"During the budget presentation last year, I also projected the GDP growth rate and finally it has been achieved," the finance minister said.

As there are no negative growth numbers, he did not understand why the GDP growth figure seems unbelievable.

Bangladesh Bank has been implementing an expansionary monetary policy since 2020 in order to keep the country's economic activities afloat amid the pandemic.