Bangladesh Budget for fiscal 2011-2012, GDP and Defence spendiing

[BanglaBhoot]

How did you come about with 230 billion? Isn't it too much since it is currently 110 billion. So you are saying black market is more than your current economy? I doubt that. Anyways nothing wrong in having dreams. Its also important to really work towards it.

The black economy is about equal to the size of the white economy so 110 + 110 = 220. There is also the issue of the base year so you can add a few more billion to the figure.

 

[ramu]

Last year's nominal gdp growth was 13%. Lets say our nominal gdp growth will be 15% as growth rate and inflation are expected to increase in the coming years.

The black economy is about equal to the size of the white economy so 110 + 110 = 220. There is also the issue of the base year so you can add a few more billion to the figure.

First of all, I doubt your real economy is twise that of what the Government knows. If that is true, BD is a banana republic to put it bluntly.

15 % nominal growth, OK, not unreasonable considering the high inflation. However, nobody can sustain this high inflation an growth in a democracy. The backlash politically will be too difficult to take for one ruling party and the other party that comes to power will reverse a few policies to gain brawny points. Sorry wont happen year on year on year for that long. I am as patriotic as you are but plant your patriotism in reality.

 

[TopCat]

Unfortunately it seems the Finance Minister is deeply involved in the share market scam. Well at least according to some allegations.

IMO Nahid is the best and only minister worthy of praise.

FM involved in scam??? Wow.. i couldnt stop laughing but fell from my chair.

 

[TopCat]

First of all, I doubt your real economy is twise that of what the Government knows. If that is true, BD is a banana republic to put it bluntly.

15 % nominal growth, OK, not unreasonable considering the high inflation. However, nobody can sustain this high inflation an growth in a democracy. The backlash politically will be too difficult to take for one ruling party and the other party that comes to power will reverse a few policies to gain brawny points. Sorry wont happen year on year on year for that long. I am as patriotic as you are but plant your patriotism in reality.

6-7% inflation is acceptable in our current context.

 

[TopCat]

The black economy is about equal to the size of the white economy so 110 + 110 = 220. There is also the issue of the base year so you can add a few more billion to the figure.

There are some formula to take undocumented economy into GDP calculation and already incorporated in current GDP. Yet its very difficult to calculate it precisely.

But the major factor is the base year. We are only taking 15 sectors into consideration while calculating GDP. Now another 10 more sectors being incorporated while we rebase our economy to 2005 base year.

 

[ramu]

6-7% inflation is acceptable in our current context.

Iajdani, you are one of the rational members here. Do you rally think a nominal growth of 15 % is sustainable for 10 years let alone black economy non sense.

 

[Pioneerfirst]

With the right economic policies Bangladesh GDP can be brought to $1 trillion in 10 years time.

No No such progress is not possible,if even you go with 10%/year growth even then you will reach max 350 bn mark and you know 10% for 10 years is difficult for even China and India too.
Best of Luck

 

[fallstuff]

There are some formula to take undocumented economy into GDP calculation and already incorporated in current GDP. Yet its very difficult to calculate it precisely.

But the major factor is the base year. We are only taking 15 sectors into consideration while calculating GDP. Now another 10 more sectors being incorporated while we rebase our economy to 2005 base year.

Do you have any update abut the re-basing ? I thought they would do it by this June, any update ?

 

[TopCat]

Do you have any update abut the re-basing ? I thought they would do it by this June, any update ?

Well they wanted to rebase the economy for the year 2010 but failed due to lack of data available to the BBS. Then IMF asked them the rebase up to year 2005 and later to 2010 when data avaibale. So thats the latest.

 

[InFn-0]

self delete

 

[Galaxy]

China's economy went from $1.198 trillion in 2000 to $5.985 trillion in 2009 with around 10% average growth rate. If it grew by 10% then in 2009 the GDP should have been $2.824 trillion. Please explain this.

Growth is calculated Compound and not annualised. 10% of 200 is 20......and next year 10% of 220 is 22 and then next year 10% of 242 is 24.20 and so on. It's Maths.

10% CAGR (compound annualised growth rate makes 165% Return approx. in Decade) and Hence, the Answer.

 

[InFn-0]

To clarify further let me show calculation. Open an excel file and do this.

2000-2009=9 years.
CAGR= (5.985/1.198)^(1/9)-1=19.6% <-----this is definitely nominal gdp growth rate. AND CAGR means COMPOUND GROWTH.

Now let me show what the GDP size would have been if we assumed 10% growth rate in the period.
GDP (2000)=1.198 trillion
GDP (2009)= 1.198*(1.10)^9=2.824 trillion.

I highly recommend eveyone to understand the difference between nominal gdp and real gdp. When growth numbers are reported they are reported in real numbers. When GDP numbers are reported they are reported in nominal terms also known as GDP at current prices. Go to India/Bangladesh/Pakistan central bank website and take a look at economic statistics.

 

[TopCat]

Iajdani, you are one of the rational members here. Do you rally think a nominal growth of 15 % is sustainable for 10 years let alone black economy non sense.

Well, if governemtn tries to keep the inflation below 6% then you need a 9% growth real growth rate for a sustainable period of 10 years. Its hard yet not impossible. You have to see the historical trends here. Increase of BD's growth is steady and did sustained in the past and is based on solid ground. Even it holded very well in the event of 2008 recession and we saw only .5 basis point reduction in real GDP growth rate and 2nd to China whereas India had to go down from 9% to 5% for that year if my memory is right.

Saying so its not easy to maintain 15% growth for that long but some south east asian countries performed even better and gone as high as 20% in some of those years.

 

[Skies]

Current Real GDP growth = 6.6%
Current Inflation = 6.0%
So,
Current Nominal GDP = 6.6 + 6.0 = 12.6% or 13% (round up)

Now,

current GDP (2011)= 110 bn (excluding unaccounted and black money income, or excluding new rebase )
Future GDP (2030) = 1000+ bn


110 bn (year: 2011)
110.0000 x 1.13 = 124.3
124.3000 x 1.13 = 140.459
140.4590 x 1.13 = 158.71867
158.7187 x 1.13 = 179.352131
179.3521 x 1.13 = 202.667873
202.6679 x 1.13 = 229.014727
229.0147 x 1.13 = 258.786611
258.7866 x 1.13 = 292.428858
292.4289 x 1.13 = 330.444657
330.4447 x 1.13 = 373.402511
373.4025 x 1.13 = 421.944825
421.9448 x 1.13 = 476.797624
476.7976 x 1.13 = 538.781288
538.7813 x 1.13 = 608.822869
608.8229 x 1.13 = 687.969877
687.9699 x 1.13 = 777.405987
777.4060 x 1.13 = 878.46878
878.4688 x 1.13 = 992.669744
992.6697 x 1.13 = 1121.716761 (year: 2030)

So we will be $ 1 tr GDP in 2030, that is 19 years later, but if we rebase our GDP calculation system\base and, or, include others unaccounted incomes then we will touch $1 tr in 10 to 12 years, I guess. So his guess is right. WoW.

 

[BanglaBhoot]

Current Real GDP growth = 6.6%
Current Inflation = 6.0%
So,
Current Nominal GDP = 6.6 + 6.0 = 12.6% or 13% (round up)

Now,

current GDP (2011)= 110 bn (excluding unaccounted and black money income, or excluding new rebase )
Future GDP (2030) = 1000+ bn


110 bn (year: 2011)
110.0000 x 1.13 = 124.3
124.3000 x 1.13 = 140.459
140.4590 x 1.13 = 158.71867
158.7187 x 1.13 = 179.352131
179.3521 x 1.13 = 202.667873
202.6679 x 1.13 = 229.014727
229.0147 x 1.13 = 258.786611
258.7866 x 1.13 = 292.428858
292.4289 x 1.13 = 330.444657
330.4447 x 1.13 = 373.402511
373.4025 x 1.13 = 421.944825
421.9448 x 1.13 = 476.797624
476.7976 x 1.13 = 538.781288
538.7813 x 1.13 = 608.822869
608.8229 x 1.13 = 687.969877
687.9699 x 1.13 = 777.405987
777.4060 x 1.13 = 878.46878
878.4688 x 1.13 = 992.669744
992.6697 x 1.13 = 1121.716761 (year: 2030)

So we will be $ 1 tr GDP in 2030, that is 19 years later, but if we rebase our GDP calculation system\base and, or, include others unaccounted incomes then we will touch $1 tr in 10 to 12 years, I guess. So his guess is right. WoW.

You are a genius! Thanks for the calculations. Wonderful job.