Tax revenue was in massive decline in march 2020, even before CoVID hit. It can be expected far far worse in current fiscal.
Source: https://tbsnews.net/economy/nbr/revenue-collection-sees-massive-fall-8-months-58474
Bangladesh to see 6.8pc growth this year: ADB
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Tax revenue was in massive decline in march 2020, even before CoVID hit. It can be expected far far worse in current fiscal.
Source: https://tbsnews.net/economy/nbr/revenue-collection-sees-massive-fall-8-months-58474
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ADB sees robust growth for Bangladesh, fourth in Asia
ECONOMY
TBS Report
15 September, 2020, 10:10 am
Last modified: 16 September, 2020, 12:01 am
ADB forecasts 6.8% growth, prolonged recovery for Bangladesh
Bangladesh may still see a remarkable growth in the Asia-Pacific region in 2021 – following only the Maldives, India and China – when neighbouring economies recover from their historic lows, the Asian Development Bank says in its latest outlook.
Until September 2020, Bangladesh has been the best performing economy among 46 countries in the region, including many economies that post negative growth. But the recovery will be fast and massive, taking the growth of the Maldives to 10.5% from negative 20.5% just in a year, the development bank forecasts.
The Asian Development Bank (ADB) however projected a prolonged economic recovery for Bangladesh due to the Covid-19 pandemic and its impacts lingering longer than expected, and government stimulus packages having little time to take hold.
The multinational development agency forecasts a 6.8% growth in Gross Domestic Product (GDP) for the Fiscal 2020-21, which is significantly lower than its previous growth projections of 8% in April – which did not consider the impacts of Covid-19, and 7.5% in June.
The government of Bangladesh had set a target of 8.2% growth for the current fiscal year, but the forecast of the ADB is lower than the budgetary target.
'Developing Asia' to shrink for first time in nearly six decades: ADB
The Bangladesh Bureau of Statistics (BBS) had estimated a 5.24% growth for the last fiscal year. So, the ADB forecasts an additional 1.6 percentage points of growth for FY21 based on gradual recovery, supported by a strong manufacturing base and strengthening of growth in export destinations.
The forecast has come from an update of the ADB's flagship report, "Asian Development Outlook (ADO) 2020", published Tuesday from the head office of the organisation.
Finance Minister AHM Mustafa Kamal has expressed his satisfaction over the ADB's growth forecast, saying that the growth has been propelled by people's working spirit.
The report forecast a 0.7% negative growth for economies across a developing Asia in 2020 – which has not happened since the early 1960s, and projected a rapid recovery with 6.8% positive growth in 2021.
The report projected a 1.8% growth for China's economy in 2020 and a 9% negative growth for India. China will recover with 7.7% growth next year, while India will recover with 8% growth, said the report.
Due to a drastic fall in the performance of the Indian economy, the South Asian sub-region is expected to shrink by 6.8% in 2020, but is expected to rebound by 7.1% in 2021.
Further analysis of the report revealed that the 5.2% growth of Bangladesh for FY2019-20 was the highest among all South Asian countries, and also the highest among all member countries of the ADB.
But the growth forecast for the following year is below average than expected in the South Asian countries.
Manmohan Parkash, country director of the ADB in Dhaka, said in a statement on Tuesday, "The Bangladesh economy has started recovering from the pandemic.
A Flourish map
"Despite significant pressure on the health and pandemic management systems, the government has managed the economy well with appropriate economic stimulus and social protection measures, ensuring basic services and commodities for the poor and vulnerable."
He continued, "Recent economic performance in exports and remittances, and the government's macroeconomic management, including securing foreign funds for economic stimulus and social protection, have made this recovery feasible."
The report pointed out that the GDP growth declined in FY2019-20 as the Covid-19 pandemic left economic activities upended globally.
Assuming prudent macroeconomic management and proper implementation of timely announced stimulus packages, growth is expected to pick up, inflation to drop slightly at 5.5%, and current account deficit to narrow further in Bangladesh in 2021, according to the report.
The analysis in the report was that the economic performance of Bangladesh in FY2019-20 – as the Covid-19 spread globally, especially among major trade partners – affected the Bangladesh economy in the final quarter of FY2019-20.
Containment measures enforced by the Bangladesh government limited the movement of people and goods within the country and across borders, further impairing economic performance.
Exports and imports contracted significantly, and remittances, which grew by more than 20% in the first 8 months, were hit hard in March–May 2020. Moreover, mobility constraints substantially cut back consumer demand.
Consumers' uncertainty and lack of confidence scuttled plans for business expansion and investment, further constraining domestic demand.
With a cautious reopening of the economy since May 2020 and subdued global economic conditions, the ADB projected a gradual recovery for Bangladesh in the first half of FY2020-21.
Then a strong manufacturing base will enable more rapid recovery in tandem with the projected strengthening of growth in the advanced economies and import demand from those countries.
As factories gradually accelerate production, growth in exports and imports will revive. After the slowdown in March-April 2020, remittances started to recover, which aided the recovery of private consumption.
The restoration of consumer confidence, along with government stimulus packages, will boost private and public investment, the report read. It also identified a prolonged pandemic in Bangladesh or its export markets as major challenges.
The report identified some risks to achieving the projected growth, such as the uncertainty surrounding the Covid-19 crisis, natural calamities, any worsening of non-performing loans, and unexpected inflationary pressure.
The ADB expects a 3.5% growth for the agriculture sector in the FY2020-21 based on government subsidies for seeds, fertilisers, innovation, farm mechanization, irrigation and refinancing facilities to provide working capital for small and medium-sized farms affected by the pandemic. The agriculture sector in Bangladesh grew by 3.11% in the last fiscal year.
The industry sector of Bangladesh will revive by 10.3% in the FY2020-21, said the ADB report. It was only 6.10% in the last fiscal year.
The ADB made the forecast assuming improved consumer demand and strong export growth following a recovery in major export markets, and expected growth in private investment.
The report forecast 5.5% growth in the service sector, which is slightly higher than the 5.32% of the last fiscal.
The ADB projected a budget deficit of about 6.2% of the GDP in the next fiscal year, slightly higher than the budgetary target.
The report added that India began its fiscal year with its April–June quarterly GDP contracting by a record 23.9% as a pandemic lockdown clobbered consumer and business spending.
The economy having weakened even before the pandemic struck, the Indian government enjoyed very little fiscal space with which to respond.
The Indian GDP is expected to fall by 9% in the whole of this fiscal year, and then grow by 8% in the next.
The Maldives and Sri Lanka, heavily dependent on tourism, will be among the hardest hit. Output in the Maldives is expected to shrink by a fifth in 2020, the sharpest GDP forecast revision in the sub-region, then grow by 10.5% in 2021.
Growth expectations for Afghanistan have also worsened, with output predicted to decline by 5% this year. Output will inch up by 1.5% next year as the country continues to grapple with political and security instability.
Bangladesh, Bhutan and Nepal managed to grow in their recently completed fiscal years because Covid-19 affected only their tail end, explained the report.
Presenting the report in Manila, the Philippines, ADB Chief Economist Yasuyuki Sawada said most economies in the Asia-Pacific region can expect a difficult growth path for the rest of 2020.
The economic threat posed by the Covid-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures, he added.
'More realistic than previous forecast'
Speaking to The Business Standard, economist Dr Zahid Hussain said, "The ADB has downgraded its growth forecast from 7.5% made in last June to 6.8%.
"Such a correction was warranted given that the 5.2% FY20 base they used is larger than their 4.5% estimate, and the mixed indications of recovery based on high frequency data in July and August."
Dr Zahid, who used to serve as the lead economist of the World Bank's Dhaka office, added, "While export recovery has been sluggish with 2.2% growth in July-August, the ADB is assuming this will rise to 8%.
"This is possible only if the key markets for Bangladesh's exports – Europe and the US – get out of their current recession, and Bangladesh can deliver the export orders on a tighter schedule."
Private consumption, the largest single component of GDP, has not recovered enough to drive industrial growth to 10.5%, as projected by the ADB, he pointed out.
Dr Zahid further said, "The implementation of the stimulus package for the cottage, micro, small and medium enterprises has struggled to reach the target in time.
"Consequently, we cannot expect a big boost in private consumption from the vast numbers of consumers dependent on incomes from informal self or wage employment."
The ADB has assumed only 4.5% growth in remittances for the whole year, even though remittance growth was 50% in July-August 2020 relative to the same period of the previous year.
Dr Zahid Hussain finds ADB's remittance projection "quite realistic" because the spike in July-August was most likely driven by temporary factors.
"On the whole, therefore, the ADB forecast remains on the optimistic side, although more realistic than their previous forecast," he concluded giving his observations about the ADB's latest outlook.
tbsnews.net
ECONOMY
TBS Report
15 September, 2020, 10:10 am
Last modified: 16 September, 2020, 12:01 am
ADB forecasts 6.8% growth, prolonged recovery for Bangladesh
Bangladesh may still see a remarkable growth in the Asia-Pacific region in 2021 – following only the Maldives, India and China – when neighbouring economies recover from their historic lows, the Asian Development Bank says in its latest outlook.
Until September 2020, Bangladesh has been the best performing economy among 46 countries in the region, including many economies that post negative growth. But the recovery will be fast and massive, taking the growth of the Maldives to 10.5% from negative 20.5% just in a year, the development bank forecasts.
The Asian Development Bank (ADB) however projected a prolonged economic recovery for Bangladesh due to the Covid-19 pandemic and its impacts lingering longer than expected, and government stimulus packages having little time to take hold.
The multinational development agency forecasts a 6.8% growth in Gross Domestic Product (GDP) for the Fiscal 2020-21, which is significantly lower than its previous growth projections of 8% in April – which did not consider the impacts of Covid-19, and 7.5% in June.
The government of Bangladesh had set a target of 8.2% growth for the current fiscal year, but the forecast of the ADB is lower than the budgetary target.
'Developing Asia' to shrink for first time in nearly six decades: ADB
The Bangladesh Bureau of Statistics (BBS) had estimated a 5.24% growth for the last fiscal year. So, the ADB forecasts an additional 1.6 percentage points of growth for FY21 based on gradual recovery, supported by a strong manufacturing base and strengthening of growth in export destinations.
The forecast has come from an update of the ADB's flagship report, "Asian Development Outlook (ADO) 2020", published Tuesday from the head office of the organisation.
Finance Minister AHM Mustafa Kamal has expressed his satisfaction over the ADB's growth forecast, saying that the growth has been propelled by people's working spirit.
The report forecast a 0.7% negative growth for economies across a developing Asia in 2020 – which has not happened since the early 1960s, and projected a rapid recovery with 6.8% positive growth in 2021.
The report projected a 1.8% growth for China's economy in 2020 and a 9% negative growth for India. China will recover with 7.7% growth next year, while India will recover with 8% growth, said the report.
Due to a drastic fall in the performance of the Indian economy, the South Asian sub-region is expected to shrink by 6.8% in 2020, but is expected to rebound by 7.1% in 2021.
Further analysis of the report revealed that the 5.2% growth of Bangladesh for FY2019-20 was the highest among all South Asian countries, and also the highest among all member countries of the ADB.
But the growth forecast for the following year is below average than expected in the South Asian countries.
Manmohan Parkash, country director of the ADB in Dhaka, said in a statement on Tuesday, "The Bangladesh economy has started recovering from the pandemic.
A Flourish map"Despite significant pressure on the health and pandemic management systems, the government has managed the economy well with appropriate economic stimulus and social protection measures, ensuring basic services and commodities for the poor and vulnerable."
He continued, "Recent economic performance in exports and remittances, and the government's macroeconomic management, including securing foreign funds for economic stimulus and social protection, have made this recovery feasible."
The report pointed out that the GDP growth declined in FY2019-20 as the Covid-19 pandemic left economic activities upended globally.
Assuming prudent macroeconomic management and proper implementation of timely announced stimulus packages, growth is expected to pick up, inflation to drop slightly at 5.5%, and current account deficit to narrow further in Bangladesh in 2021, according to the report.
The analysis in the report was that the economic performance of Bangladesh in FY2019-20 – as the Covid-19 spread globally, especially among major trade partners – affected the Bangladesh economy in the final quarter of FY2019-20.
Containment measures enforced by the Bangladesh government limited the movement of people and goods within the country and across borders, further impairing economic performance.
Exports and imports contracted significantly, and remittances, which grew by more than 20% in the first 8 months, were hit hard in March–May 2020. Moreover, mobility constraints substantially cut back consumer demand.
Consumers' uncertainty and lack of confidence scuttled plans for business expansion and investment, further constraining domestic demand.
With a cautious reopening of the economy since May 2020 and subdued global economic conditions, the ADB projected a gradual recovery for Bangladesh in the first half of FY2020-21.
Then a strong manufacturing base will enable more rapid recovery in tandem with the projected strengthening of growth in the advanced economies and import demand from those countries.
As factories gradually accelerate production, growth in exports and imports will revive. After the slowdown in March-April 2020, remittances started to recover, which aided the recovery of private consumption.
The restoration of consumer confidence, along with government stimulus packages, will boost private and public investment, the report read. It also identified a prolonged pandemic in Bangladesh or its export markets as major challenges.
The report identified some risks to achieving the projected growth, such as the uncertainty surrounding the Covid-19 crisis, natural calamities, any worsening of non-performing loans, and unexpected inflationary pressure.
The ADB expects a 3.5% growth for the agriculture sector in the FY2020-21 based on government subsidies for seeds, fertilisers, innovation, farm mechanization, irrigation and refinancing facilities to provide working capital for small and medium-sized farms affected by the pandemic. The agriculture sector in Bangladesh grew by 3.11% in the last fiscal year.
The industry sector of Bangladesh will revive by 10.3% in the FY2020-21, said the ADB report. It was only 6.10% in the last fiscal year.
The ADB made the forecast assuming improved consumer demand and strong export growth following a recovery in major export markets, and expected growth in private investment.
The report forecast 5.5% growth in the service sector, which is slightly higher than the 5.32% of the last fiscal.
The ADB projected a budget deficit of about 6.2% of the GDP in the next fiscal year, slightly higher than the budgetary target.
The report added that India began its fiscal year with its April–June quarterly GDP contracting by a record 23.9% as a pandemic lockdown clobbered consumer and business spending.
The economy having weakened even before the pandemic struck, the Indian government enjoyed very little fiscal space with which to respond.
The Indian GDP is expected to fall by 9% in the whole of this fiscal year, and then grow by 8% in the next.
The Maldives and Sri Lanka, heavily dependent on tourism, will be among the hardest hit. Output in the Maldives is expected to shrink by a fifth in 2020, the sharpest GDP forecast revision in the sub-region, then grow by 10.5% in 2021.
Growth expectations for Afghanistan have also worsened, with output predicted to decline by 5% this year. Output will inch up by 1.5% next year as the country continues to grapple with political and security instability.
Bangladesh, Bhutan and Nepal managed to grow in their recently completed fiscal years because Covid-19 affected only their tail end, explained the report.
Presenting the report in Manila, the Philippines, ADB Chief Economist Yasuyuki Sawada said most economies in the Asia-Pacific region can expect a difficult growth path for the rest of 2020.
The economic threat posed by the Covid-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures, he added.
'More realistic than previous forecast'
Speaking to The Business Standard, economist Dr Zahid Hussain said, "The ADB has downgraded its growth forecast from 7.5% made in last June to 6.8%.
"Such a correction was warranted given that the 5.2% FY20 base they used is larger than their 4.5% estimate, and the mixed indications of recovery based on high frequency data in July and August."
Dr Zahid, who used to serve as the lead economist of the World Bank's Dhaka office, added, "While export recovery has been sluggish with 2.2% growth in July-August, the ADB is assuming this will rise to 8%.
"This is possible only if the key markets for Bangladesh's exports – Europe and the US – get out of their current recession, and Bangladesh can deliver the export orders on a tighter schedule."
Private consumption, the largest single component of GDP, has not recovered enough to drive industrial growth to 10.5%, as projected by the ADB, he pointed out.
Dr Zahid further said, "The implementation of the stimulus package for the cottage, micro, small and medium enterprises has struggled to reach the target in time.
"Consequently, we cannot expect a big boost in private consumption from the vast numbers of consumers dependent on incomes from informal self or wage employment."
The ADB has assumed only 4.5% growth in remittances for the whole year, even though remittance growth was 50% in July-August 2020 relative to the same period of the previous year.
Dr Zahid Hussain finds ADB's remittance projection "quite realistic" because the spike in July-August was most likely driven by temporary factors.
"On the whole, therefore, the ADB forecast remains on the optimistic side, although more realistic than their previous forecast," he concluded giving his observations about the ADB's latest outlook.
ADB sees robust growth for Bangladesh, fourth in Asia
ADB forecasts 6.8% growth, prolonged recovery for Bangladesh
Please read post #10. Our @idune claims there is little fund for paying salaries to the govt employees. If so, it means lower collection of tax. But, why ADB should project a high growth of GDP?
ADB very much use regime fed data. More specifically review data regime fed and modify here and there to give their stamp. Read CPD report to see how these numbers are cooked for political purpose.
EasyNow
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This guy pops up every time there is bad news, covid is full time Eid for him. But when times are good he goes back into his hole.
They are nothing but rats, they contribute nothing to develop the country but shout the loudest to bring it down.
Id rather trust independent, international ADB than some unverified, biased CDB figures
Indos
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Well I think @idune data is more about the shortfall between the targeted tax collection compared to the first 8 months real tax collection data, there are still another 4 months to collect tax.
We need to see the comparison between this year collection with previous year tax collection to see the better picture, at least the comparison between previous year first semester tax collection with this year first semester can be a good parameter to see whether there is growth or not on tax collection.
Or at least both of you should wait until February 2021 to check complete data about government revenue that include tax. I believe you have statistic bureau that post the data online, dont you ?
Like this Indonesian statistic bureau (BPS), 2020 data is still in the form of target though and with our weak growth and possibly reach negative growth, so the tax collection will likely unable to reach the target. Real data for the year 2020 will be published in late January or early February 2021
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Bengal71
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Yeah, that guy I know. Rajakar, I told you to ignore him.
Well I think @idune
Like this Indonesian statistic bureau (BPS), 2020 data is still in the form of target though and with our weak growth and possibly reach negative growth, so the tax collection will likely unable to reach the target. Real data for the year 2020 will be published in late January or early February 2021
Bangladesh fiscal year starts on 1st of July and ends in 30th June. On that count, last fiscal just ended and fiscal of 2020-2021 just into 2 and half months. That being said I can give you revenue figure for 2018-2019 and 2019-2010 BUT you will not be able to see GDP growth for 2020-2021 for following reasons:
1) Just into 2 and half months, BBS does not have enough data to make any projection BUT it did made a false one for political instruction. In post 10, I have listed major indicators of economy thus far showing severe downturn and regime is desperate for funds even to pay salary. There is virtually no money for domestic investment, FDI (as in all over the world) few and far between. Besides, one of the prime contributor of economy "expatriates" are returning in hundreds of thousands. Anyone with simple intuition can see 6.8% growth fairy tale has no REAL underpinning to stand on.
2) inflation data are heavily purged by BBS in any data calculation. Therefore, even someone try to guess estimate any figure would be hugely misleading.
3) BBS and any data from government run organization has ZERO credibility. Please see below excerpt from CPD ( independent research body) conclusion on BBS.
Note: In "Bangladesh" equivalent Bangladesh Bureau Statistic or BBS. Regime uses BBS as political tool to give inflated and misleading data to look good. But that trick got too old and independent research body had exposed
Is the BBS figure based on nine months' data?
The BBS disclosed provisional GDP growth numbers for the last fiscal through its website without mentioning the period of data used to formulate the report, but the officials said the report was prepared with data for the first nine months.
Dr Mustafizur Rahman said at the press briefing the BBS would prepare the growth report with the data for nine months if they did it in May, as it usually does. "Since they disclosed the figures in August, we assume they calculated 12 months' data," he added.
As the report has no reflection of the Covid period, it would not be sufficient to prepare any programme, project or policy to recover the economy from the Covi-19 shocks.
BBS report is based on old data
More than half of the provisional GDP estimate is not based on credible real time data, said Towfiqul in his presentation.
He said other than industrial, construction and crop sectors, GDP estimates for majority of sectors do not consider real time credible data as there are areas where no surveys took place in a decade or so.
The provisional GDP growth estimate, which did not capture the impacts of Covid-19 and provide a reliable assessment about the actual health of the economy, would not help to formulate any effective policy to tackle the detrimental impacts of the pandemic, Dr Towfiqul observed in his presentation.
https://tbsnews.net/economy/mismatch-between-gdp-growth-fy20-reality-cpd-120193
Indos
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Actually it will be very difficult to manipulate tax collection data since it has relation with government spending budget. How about car sales ??? Is the car sales grow or decrease during first semester 2020 ??
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