Macroeconomic Performance of Bangladesh based on the 7th 5 year Plan

Achievement of economic success is a burning issue in the developed countries as well as

developing countries. It also tells how economic success can be measured. To evaluate the
performance of an economy, there are a few key variables such as Gross Domestic Product
(GDP), the unemployment rate and inflation rate that works as instruments and are used to
measure the economic performance of Bangladesh.
The most comprehensive measurement of the total output in an economy is the Gross
Domestic Product (GDP). Economic growth in Bangladesh and other countries is calculated as
the percent change in the GDP from a year to another year. It measures whether production
has increased or decreased. And by how much it has changed. Looking across many countries
and over long periods of time, the average rate of economic growth is about 2-3% per year.
That changes from year to year as the economy goes through recessions and expansions.
However, if an economy routinely grows at about 5% or more per year, this is a substantial rate
of economic growth. Economic growth of 7-8% is extraordinary. The substantial rate of GDP
attracts the foreign investors. Last two years, Bangladesh faces lower GDP growth than 2011
although it does not decline below 6%. While the whole world faced economic recession in
2007-08, Bangladesh had kept its growth rate above 5 percent. It is a great achievement as a
developing country like Bangladesh.
Consumption level of Bangladeshi people is increasing day by day that leads to low savings.
National savings decreases constantly from 2011 to 2013. Investment depends on saving.
Increasing rate of investment leads to high output growth, low unemployment means high
employment rate. Both public and private investment rises year to year. Private investment
contributes more than public sector. If we are able to increase the portion of the public sector
in investment, we will be more strengthen and stable to face the economic downturn as well as
we will be able to reduce the trade deficit to other countries.
NEC chairperson and Prime Minister Sheikh Hasina will preside over the meeting be held at the
NEC conference room in the city’s Sher-e-Bangla Nagar. The SFYP (2016-20) aims at
empowering people by creating employment and skill-development opportunities, supplying
credit for SME development and giving people many other ways to be productive.

Plan Goals and Targets of 7th FYP

a) Income and Poverty:
 Attaining average real GDP growth of 74% per year over the plan period.
 Reduction in the head-count poverty ratio by 6.2 point.
 Creating good jobs for the large pool of unemployed and new labor force entrants by
increasing the share of employment in the manufacturing sector from 15% to 20%.
b) Sector Development:
 Increase the contribution of the manufacturing sector to 21% of GDP by FY20.
 Substantial improvement of export to $54.1 billion by FY20.
 Achieving a Trade 0 GDP ratio of 50% by FY20.
c) Macroeconomic Development:
 Total revenue to be raised for deficit of 5% of GDP.
 Government spending to be increased to 21.1% of GDP by FY20.
 FDI to be increased substantially to $9.6 billion by FY20.
d) Urban Development:
 Access to improved water source will be ensured for all urban dwellers.
 Coverage of drainage system to be expanded to 80%.
 Ensure sustainable urban development that supports increased productivity, investment
and development.
e) Human Resource Development:
 Achieving 100%net enrollment rate from primary and secondary education.
 Increasing enrollment rate in 12th class to 60%.
 Percentage of cohort reaching grade 5 to be increased to 10 from current 80%.
f) Water and Sanitation:
 Safe drinking water to be made available for all urban population.
 Safe drinking water to be made available for all rural people.
g) Environmental Sustainability:
 Increase productive forest coverage to 20%.
 Improvement of air quality of Dhaka and other large cities and enact clean act.
h) ICT Development:
 Spending on research and development to constitute 1% of GDP.
 Increase proportion of primary Govt. schools with a computer lab.
 Improve tele density to 100%.

Progress with Infrastructure Development

 Access to electricity from the FY20 baseline of 48% to 72% in FY2015.
 Per capita electricity increased 220 kw/h to 371 kw/h.

Macroeconomic Development
 Total revenue to be raised from 10.7% of GDP to 16.1% by FY20.
 Maintain the current fiscal deficit of 5% of GDP.
 Government spending to be increased to 21.1% of GDP by FY20.
 FDI to be substantially to $9.6 billion by FY20.
 Tax Reform Programs Completed During The Sixth FYP:
Tax Administration Reform : Income Tax
 Establishing 13 new Income Tax zones, 2 tax appeal zones and 85 circle offices.
 Automation of TIN registration and liking TIN with National ID.
 Tax calculator installed on the NBR website (www.nbr.bd.org)
 Payment of taxes using the Q-cash network under the platform of e-payment of NBR.
 Establishing taxpayer information and service centers at all divisions.
 Providing enhanced taxpayer services through spot assessment, income tax returns on a
pilot basis (LTU).
 Strengthening the central Intelligence Cell (CIC) for combating tax evasion.

Tax Administration Reforms: VAT and Customs

 Establishing 4 new Vat commissioners and 3 Vat appeal commission rates.
 Installing ASYCUDA World System in all custom houses and 4 land custom stations.
 Online connectivity between the customs database and Bangladesh Bank database for
combating money laundering.
 Developing customs database.
 E-filling of Vat returns on a pilot basis at large Taxpayers Units (LTUs).

Since independence, Bangladesh has made commendable progress in various macroeconomic

and social development indicators. Which is reflected in various development indexes of World
Bank and the United Nations. However, we could have achieved much more had we utilized the
full potential for our labor force. On the basis of analytical results of various economic
parameters as mentioned above it can be said that Bangladesh is a country of steady and
sustainable growth. GDP growth rate is on an average 6% to 7%. Poverty level is in declining
trend. Bangladesh’s strong growth, more dynamic, to protect the high rate of inflation to
reduce the inequality of the society steps may be taken to increase the share of direct tax. For
increasing the share of direct tax, new tax payers need to be identified. It is pertinent to
mention that 5% of the high income level people are holding almost 27% of GDP. To keep the
inflation within the tolerable range through controlling the demand pull inflation the annual
money and credit growth may be consistent with the growth rate of commodities.