Bangladesh's industrial growth slumped in the last fiscal year, mainly due to the COVID pandemic, the government data show. The sector recorded notable growth in the previous couple of years.
The manufacturing sub-sector's expansion fell by 8.36 percentage points to 5.84 per cent in FY 2019-20 from 14.20 per cent in the FY2019.
Analysing the Bangladesh Bureau of Statistics (BBS) data, it was found that the country's industrial growth rate in last year plunged by a half to only 6.48 per cent.
The industrial sector had been maintaining a robust growth trend since FY2017, expanding at the rate of 12.06 per cent in FY2018 and 12.67 per cent in FY2019. In FY2017, the growth rate was recorded at 10.22 per cent, the BBS data showed.
But the coronavirus has suddenly broken the backbone of the economy, as the manufacturing subsector grew by 5.84 per cent in the last fiscal.
A senior BBS official said since the coronavirus had affected the industrial production in the last four months (March-June) of FY2020, its growth rate had declined much.
Since the economy had restarted from early this year, he is hopeful of a recovery in FY2021.
Within the manufacturing sub-sector, the large and medium industries performed poorly in the last fiscal as their growth rates plummeted to 5.84 per cent, a 9.37 percentage points lower than that of 14.84 per cent a year ago.
The expansion rate of the small-scale industries also fell in the last fiscal, but the damage was not much compared with the bigger units.
It posted 7.78 per cent growth, a 3.17 percentage points lower than that of 10.95 per cent in the previous FY2019, the BBS data showed.
Despite poor growth, the share of industrial sector (at constant price) to the gross domestic product (GDP) increased to 35.36 per cent in the last fiscal from that of 35 per cent in the previous fiscal.
The size of the industrial sector was recorded at Tk 3.96 trillion (at constant price) in the last fiscal. In FY2019, it was Tk 3.72 trillion, BBS data showed.
Meanwhile, Bangladesh GDP growth also fell to 5.24 per cent in FY2020 from that of 8.15 per cent in the previous FY2019 due to the impact of the COVID-19 pandemic.
Former World Bank lead economist Dr Zahid Hussain said the economic growth as well as growth in the industrial sector seemed to be incomplete as the BBS itself said some economic indicators of the last three-months of the year were not calculated.
Even the BBS's provisional GDP growth rate figure of 5.24 per cent was also questionable as different economic indicators even before the coronavirus impact were not doing well, he said.
"Except remittance, all the indicators before the COVID were almost negative. In addition, the country's economic activities have remained almost closed for last three months," he told the FE. "How could the economy expand at 5.24 per cent rate?" he questioned.
Dr Hussain said that had the BBS calculated the manufacturing and service sectors excluding agriculture, it could have found that the first two did not perform properly and worsened further in the pandemic.
"I do not see any reasons for positive growth in the manufacturing and service sectors in the last fiscal year," he added.