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GDP takes hit due to blockade: CPD

WT24 Desk

Production sector of Bangladesh experienced a loss of Tk 4,900 crore due to recent political turbulence that has taken place from January 5 to mid March, reveals a study of Centre for Policy Dialogue (CPD).  CPD came up with the study findings at a pre-budget discussion titled ‘Navigating the Troubled Waters: An Outlook for the Upcoming Budget’ organised at the city’s BRAC Centre on Sunday. CPD estimated that the GDP of the country would endure a reduction of 0.55 percent during the ongoing fiscal year (FY) 2015 as a result of the loss in the production sector.

 

CPD research fellow Towfiqul Islam Khan presented the keynote at the programme. The study considered data of 16 major business organisations and trade-bodies that came up with their own estimation of losses at different times during the political unrest. 81 days of blockade and 67 days of hartal had severely disrupted day-to-day economic activities, resulting in losses to various sectors while the prolonged periods of blockade had also disrupted supply chains that disconnected rural and urban market as well as domestic and international market, the study said.

 

In the agricultural sector, the farmers counted a loss of Tk 398 crore from January 5 to mid March; in the meantime, the farmers either sold their perishable goods at a very low price to the wholesalers or their vegetables got spoiled in the fields. CPD also observed that farmers’ repayment of agricultural credit in January 2015 was 18.9 percent lower compared to the same period of 2014, the largest shortfall in the current FY. Poultry sector had faced losses of Tk 606 crore as supply chain of eggs, chicken meat and one-day chicks got largely disrupted; on the other hand, export in shrimp & frozen food sector was reduced by 15 percent, that amounted to a loss of Tk 741.4 crore.

 

Citing Bangladesh Garment Manufactures & Exporters Association (BGMEA) data, CPD said 41 factories in the apparels sector have reported about different types of losses including cancellation of work order, additional charge for delayed shipment, vandalism of transports carrying apparel shipments and being compelled to sell at highly discounted rate. Transport sector had faced a loss of Tk 85.44 crore as 1,405 vehicles including bus, truck, and railway compartment were either vandalised or torched. CPD also informed that the loss of the sector is so high related to other sectors, yet the actual amount would be more than the estimated one.

 

The garments sector had faced a total loss of Tk 1,318 crore, the study found. A significant number of foreign nationals cancelled their arrivals into Bangladesh due to political unrest that affected the tourism sector, costing the sector Tk 675 crore, while the overall loss in the sector would be Tk 825 crore. CPD also pointed out that the education sector of the country was severely affected, though it is difficult to measure the loss in the sector in economic terms.

 

At the end of the research presentation, Towfiqul Islam said if it was possible to capture all the sources of losses, it would obviously raise the estimate of losses. Noted economist and CPD research fellow Dr Debapriya Bhattacharya, executive director of CPD Prof Mustafizur Rahman, and its additional research director Khondaker Golam Moazzem were also present at the programme.

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