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ACKNOWLEDGEMENT

At first I would like to give my sincere gratefulness to my honorable course teacher Rehana Pervin. I
could not able to complete this kind of difficult task successfully without her contribution. She has
provided me some essential directions and suggestions to formulate this assignment, which provides
useful references.

Also I would like to thank all of my batch mates and friends of BBA who contributed me a lot. I also
grateful to concerned peoples who provided useful services, books, web facilities etc.

potato. GDP per capita is not a measure of personal income. frozen shrimp. The acceleration in economic growth was accompanied by decreased incidence of poverty and a distinct improvement of some key social indicators. In FY2000. A combination of factors accounts for the robust growth of the agriculture sector. and in particular of food grains. Economic performance improved with gross domestic product (GDP) growth averaging 5 percent in the 1990s compared with 4 percent in the preceding decade. wheat. GDP is not to be confused with gross national product (GNP) which allocates production based on ownership. The country has under gone a major shift in its economic philosophy and management in recent years. . the country embraced socialism as the economic ideology with a dominant role for the public sector. Major agricultural products are rice. since the mid-seventies. GDP is related to national accounts. it undertook a major restructuring towards establishing a market economy with emphasis on private sector-led economic growth.S. GDP per capita exactly equals the gross domestic income (GDI) per capita. At Bangladesh’s birth. . The stabilization program reduced inflation as well as fiscal and current accounts deficit and established a healthy foreign exchange reserve position. leather goods and handicrafts are also major exportable commodities. is one of South Asia’s least developed countries. Under economic theory. Bangladesh reached self-sufficiency in food grain production. Rapid growth in food grain production has been a remarkable feature of the country’s economic performance in recent years. This report analyses the various aspects of the economy of Bangladesh. Bangladesh has an agrarian economy with 22% of GDP coming from the Agriculture Sector. tea and sugarcane.Introduction: Bangladesh. fish. THEORETICAL FRAMEWORK Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time. Tea. pulses. Bangladesh has the 36th largest economy in the world in terms of GNP based on the purchasing power parity method of valuation. But. GDP per capita is often considered an indicator of a country's standard of living. tobacco. Dollars. a subject in macroeconomics. jute. Bangladesh achieved good economic progress during the 1990s by adopting a series of structural and economic reform measures. and the 55th largest in terms of nominal GNP in U. Here we are going to analyses about two year GDP component of Bangladesh. Readymade garments are among the most exportable items. According to a World Bank estimate. a country of more than 160 million people. The country is the largest exporter of jute and jute goods in the world.

give the same result. in principle. the income approach. and the expenditure approach. The most direct of the three is the product approach. all of which should. They are the product (or output) approach. which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the .Determining GDP GDP can be determined in three ways.

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. and services. purchase of weapons for the military. purchase of software. but do not include exchanges of existing assets. Buying financial products is classed as 'saving'. jewelry. Buying bonds or stocks is a swapping of deeds. The income approach works on the principle that the incomes of the productive factors must be equal to the value of their product. This avoids double-counting: if one buys shares in a company. In contrast to its colloquial meaning. Examples include construction of a new mine. gasoline. It includes salaries of public servants. as opposed to investment. to also count it when one gives it to the company would be to count two times an amount that only corresponds to one group of products. Government Spending (G) and Net Exports (X – M).  I (investment) include. 'Investment' in GDP does not mean purchases of financial products. therefore the value of the total product must be equal to people's total expenditures in buying things. such as social security or unemployment benefits. It does not include any transfer payments. etc. Spending by households (not government) on new houses is also included in Investment. business investment in equipment. Investment (I). rent. Y = C + I + G + (X − M) Here is a description of each GDP component:  C (consumption) is normally the largest GDP component in the economy. and determines GDP by finding the sum of all producers' incomes.  G (government spending) is the sum of government expenditures on final goods and services. Examples include food. non-durable goods. or Components of GDP by expenditure GDP (Y) is a sum of Consumption (C). and the company uses the money received to buy plant. and medical expenses but do not include the purchase of new housing. consisting of private (household final consumption expenditure) in the economy. . These personal expenditures fall under one of the following categories: durable goods. The expenditure method: GDP = private consumption + gross investment + government spending + (exports − imports). and any investment expenditure by a government. or purchase of machinery and equipment for a factory. a transfer of claims on future production. not directly an expenditure on products. for instance. the amount will be counted toward GDP when the company spends the money on those things. equipment.product must be bought by somebody.

Imports are subtracted since imported goods will be included in the terms G.8 4.8 25.5 29. I. PRSP II (draft copy) and Bangladesh Bank FY 2010 5.3 13.5 21.0 9.492 -0.0 4.1 4.4 4. therefore exports are added.7 4.b (% change) Imports.350 2.7 5.862 -1.8 3.  M (imports) represents gross imports.0 21.1 6.7 16. X (exports) represents gross exports. Comparative analysis of GDP components for the financial year 2009-10 and 2010-2011 : Table : Macroeconomic Framework 2008‐09 to 2010‐11 Indicator Real Growth ( % ) Agriculture Sector Crop Sector Industry Sector National Saving (% of GDP) Gross Investment (% of GDP) ICOR Total Govt.6 24. or C.7 27. GDP captures the amount a country produces. including goods and services produced for other nations' consumption.3 14.o.000 2.2 17.3 . Expenditure (% of GDP) ADP (% of GDP) ADP as % total govt. f.3 3.0 6. expenditure Exports.9 6. f.o. and must be deducted to avoid counting foreign supply as domestic.0 11.0 28.3 6.b (% change) Remittances (US$ million) Current Account Balance (%of GDP) Gross Official Reserve (US$million) Gross Official Reserve (Months) FY 2009 5.6 Source: Budget Documents.1 21.

Bangladesh economy not only benefited from low prices of importable but was also able to avoid negative pressure on its export of goods and services. Growth in manufacturing sector (and hence in industry sector) remained modest. the impacts of the global economic and financial Crises started to have important consequences for the Bangladesh economy. while the domestic inflationary trend took an upturn in consonance with the international market. Incidentally. Bangladesh has experienced two volatile years (FY2008‐09 and FY2009‐10) when its economic growth was restrained below 6. A visible improvement in public investment (in terms of ADP implementation as per cent of GDP) has also been a promising feature of the last fiscal.0 per cent level (see Table) The first one. strong growth in agriculture sector helped maintain the GDP growth at respectable level and expansion of safety net programs provided some protection to the living standard of the marginalized groups. Export revenues and remittance income growth started to decelerate. In the face of fall in global demand commodity prices as well as domestic inflationary trend declined considerably. was the year of global financial and economic crisis. On the other hand. in the next year (FY2009‐10).In line with global economic trends. However. On the other hand. . over these two years Bangladesh remained an underinvested country. FY2008‐09. during this period. The investable surplus (reflected by the gap between national savings and total investment) could not be made use of due to the lack of domestic infrastructure.