The official data recently released by the BBS confirming 5.24% economic growth in the last financial year ending in June should be considered as a "great news" in the time of the coronavirus pandemic when global economies are experiencing the worst crisis since the Great Depression in the 1930s.
That should be a "great news" because the growth rate negated the chilling forecast made by the World Bank in June that Bangladesh's GDP growth would come down to only 1.6% from a high flying 8.15%.
But that data of the Bangladesh Bureau of Statistics lacks strength to be a truly great news.
The BBS did not assess the impact of the pandemic containment measures shuttering the economy for around three months – April-June, the last quarter of the past financial year – to come up with the growth data.
It has assessed the nature of the economy in the first nine months of the last fiscal year. Based on that findings, it calculated the economic performance of the last three months – April-June – when the economy was under shutdown.
The BBS usually uses this method in normal times. But its application of it during this unprecedented economic crisis cannot be rational.
During the shutdown, the reality on the ground was grim. There was a massive contraction in economic activities. Millions of people lost their earnings as they became jobless and national poverty rate was feared to have doubled.
Every sector faced huge losses. Businesses have been struggling to recover from the shock since the lifting of shutdown at the end of June. Many of them are feared to be unable to recover in years.
All these are signs of an economy facing recession.
Yet, the exact damage to the economy caused by the shutdown remains unknown as the BBS did not asses that impact.
Various measures have been taken by the government to help the economy recover from the shock. To use an analogy, this seems like prescribing medicine without diagnosing the disease first.
The BBS data, though based on economic performance of the first nine months, has reasons to be concerned. It clearly indicates that the economy had been experiencing a slump even before the pandemic struck.
In the previous fiscal year – 2018-2019 – the country registered a record growth of 8.15% and set a target of 8.20% growth in the next financial year.
But, the BBS latest data shows the economy grew only by 5.24% – the weakest rate in the last 18 years. Its data conforms with the finance ministry's estimation made in June that the economic growth may decrease to 5.2%.
This is a real setback for an economy that has averaged around 7% growth for the last few years.
The signs for weakness were visible much earlier. Major macroeconomic indicators such as export-import and private sector credit growth were facing a downtrend much before the pandemic outbreak.
Again, for the same reason, the exact picture on the performance of the economy in the three quarters was not known as the BBS did not assess the economic performance quarterly. No significant intervention was made to contain the slowdown the economy was experiencing.
Now, the government policymakers are expecting a V-shaped recovery as they have set an ambitious target of 8.20 % growth in the current fiscal year with the real picture of the economic damage remaining unknown. Moreover, the global economies are suffering a contraction unprecedented in recent years.
For example, the US economy shrank by a stunning 9.5% from April through June, a historic contraction and a stinging reminder of how much was lost in such a short period. Its GDP shrank at an annual rate of 32.9%, an unimaginable figure!
The situation in Europe is chilling, too. The euro-area economy took an unprecedented plunge in the second quarter, putting it in a deep hole from which it may take years to fully recover. The 19-member region as a whole saw a 12.1% contraction.
They know the damage their economies are facing and that they are entering a recession. The data help their policymakers to make interventions with stimulus packages worth trillions of dollars.
Our economy will have to suffer the chill from the global slowdown that will hurt our exports in coming months.
It has already faced a massive contraction in its activities during the shutdown. But no exact picture is available like other economies. BBS officials say they may release data about the impact on the economy by the lockdown in December. That assessment may revise the growth rate. But it will be too late to help the policymakers to make interventions.
Economists say accurate and timely economic data are crucial for informing policy decisions, especially during a crisis. Without reliable data, policymakers cannot assess how badly the pandemic is hurting people and the economy, nor can they properly monitor the recovery.
However, the BBS has no plan to review quarterly performance of the economy, considering the nature of the unprecedented economic crisis induced by the virus.
Three years ago, the BBS had taken an initiative to release economic data quarterly. But that move did not see the light of the day.
"Many countries release data on the performance of the economy quarterly," Tazul Islam, director general of BBS, recently told The Business Standard. "We need to do so. We will take measures in this regard in future."
The government policymakers need to step on it.