Table of Contents

Introduction ..........................................................................................................................................3

Objective ..............................................................................................................................................3

Methodology ........................................................................................................................................4

Economic Condition Analysis of Bangladesh (1980-2016) ................................................................ 7

Real GDP..........................................................................................................................................7

Figure 1. Real GDP of Bangladesh (1980-2016) .........................................................................7

Figure 2. Trend Analysis of RGDP .............................................................................................. 8

Figure 3. Business Cycle of Bangladesh (1980-2016) .................................................................8

Consumption ..................................................................................................................................10

Figure 4. Consumption (Actual Data) ........................................................................................ 10

Figure 5. Trend Analysis of Consumption .................................................................................10

Figure 6. Cyclical Components of Consumption .......................................................................11

Investment ......................................................................................................................................12

Figure 7. Investment (Actual Data) ............................................................................................ 12

Figure 8. Trend Analysis of Investment ..................................................................................... 12

Figure 9. Cyclical Component of Investment .............................................................................13

Government Expenditure ...............................................................................................................14

Figure 10. Government Expenditure (Actual Data) ...................................................................14

Figure 8. Trend Analysis of Investment ..................................................................................... 14

Figure 8. Cyclical Component of Government Expenditure ...................................................... 15

Export .............................................................................................................................................16

Figure 9. Total Export of Bangladesh (Actual Figure) ............................................................... 16

Figure 10. Trend Analysis of Export .......................................................................................... 16

Figure 11. Cyclical Component of Export..................................................................................17

1
 Imports ...........................................................................................................................................18

Figure 12. Import (Actual Data) .................................................................................................18

Figure 13. Trend Analysis of Import .......................................................................................... 18

Figure 14. Cyclical Changes in Import ....................................................................................... 19

Regression Analysis ........................................................................................................................... 20

Conclusion .........................................................................................................................................21

Bibliography ......................................................................................................................................22

2
Introduction
Bangladesh is one of the most remarkable and surprising success stories within Asian region.
Comparing recent scenario, it sounds like an old wives tale that this country used to be the poorest,
an economic basket case wracked and full of famine regions of Pakistan in 1971. Not only that, if we
look back till 2006 it was quite deniable that Bangladesh can achieve faster economic growth lagging
behind present Pakistan (Basu, 2018).

In addition, Bangladesh has not looked back since then in terms of economic growth. Bangladesh’s
annual gross domestic product growth has exceeded Pakistan’s by roughly a pair of 2.5 percent per
annum and probably going to surpass India’s growth rate which is undoubtedly a great achievement.

Though Pakistan’s population growth rate (2%) is higher than Bangladesh’s population growth rate
(1.1%) per annum, the above data clears that Bangladesh’s per capita financial gain is much faster
than Pakistan’s by just about 3.3 share points per annum. So, it’s expected that no longer but within
2020, Bangladesh will overhaul Pakistan in terms of per capita gross domestic product (Basu, 2018).

Partial clarification for Bangladesh’s progress is that the success of its RMG sector(Bhattacharya,
Rahman, & Raihan, 2002). That success is itself driven by variety of things. One notable purpose is
that the most garment corporations in Bangladesh are large especially compared to those in India,
owing for the most part to totally different labor laws.

Objective
The purpose of this study is to analyze the economic condition of Bangladesh from 1980 to 2016.
Key objectives included, analyzing the Real GDP, Consumption, Investment, Govt. Expenditure,
Import & Export data and reflecting the economic condition. Another key purpose is to analyze the
relationship between business cycle and other variables cyclic component. The relation is to be
identified by using multivariate regression analysis.

3
Methodology
This report reflects the data of World Bank’s World Development Indicator Database. This database
is World Banks’ one of the best collections of cross country economic information. Moreover, this
data is reported by the Government of Bangladesh to World Bank every year. To prepare the report
we have collected all the data for the reference period from website of World Bank Data Bank. GDP,
GDP Deflator, Consumption, Investment, Government expenditure, Export and Import from 1980 to
2016 was used to prepare the report. 11

The details of the data we used from World Bank Database is given below-

Variables Indicator Description of Indicator in the World Bank Website1

GDP GDP (constant 2010 “GDP at purchaser's prices is the sum of gross value added by
US$) all resident producers in the economy plus any product taxes
and minus any subsidies not included in the value of the
products. It is calculated without making deductions for
depreciation of fabricated assets or for depletion and
degradation of natural resources. Data are in constant 2010
U.S. dollars.”

GDP Deflator GDP deflator (base “The GDP implicit deflator is the ratio of GDP in current local
year varies by currency to GDP in constant local currency. The base year
country) varies by country.”

Consumption Households and “Household final consumption expenditure (formerly private

NPISHs final consumption) is the market value of all goods and services,
consumption including durable products (such as cars, washing machines,

expenditure and home computers), purchased by households. It excludes

purchases of dwellings but includes imputed rent for owner-
(constant 2010 US$)
occupied dwellings. It also includes payments and fees to
governments to obtain permits and licenses. Here, household
consumption expenditure includes the expenditures of
nonprofit institutions serving households, even when reported
separately by the country. Data are in constant 2010 U.S.
dollars.”

4
Investment Gross capital “Gross capital formation (formerly gross domestic
formation (constant investment) consists of outlays on additions to the fixed assets
2010 US$) of the economy plus net changes in the level of inventories.
Fixed assets include land improvements (fences, ditches,
drains, and so on); plant, machinery, and equipment purchases;
and the construction of roads, railways, and the like, including
schools, offices, hospitals, private residential dwellings, and
commercial and industrial buildings. Inventories are stocks of
goods held by firms to meet temporary or unexpected
fluctuations in production or sales, and "work in progress."
According to the 1993 SNA, net acquisitions of valuables are
also considered capital formation. Data are in constant 2010
U.S. dollars.”

Government General government “General government final consumption expenditure

Expenditure final consumption (formerly general government consumption) includes all
expenditure government current expenditures for purchases of goods and

(constant 2010 US$) services (including compensation of employees). It also

includes most expenditures on national defense and security,
but excludes government military expenditures that are part of
government capital formation. Data are in constant 2010 U.S.
dollars.”

Export Exports of goods and “Exports of goods and services represent the value of all goods
services (constant and other market services provided to the rest of the world.
2010 US$) They include the value of merchandise, freight, insurance,
transport, travel, royalties, license fees, and other services,
such as communication, construction, financial, information,
business, personal, and government services. They exclude
compensation of employees and investment income (formerly
called factor services) and transfer payments. Data are in
constant 2010 U.S. dollars.”

5
 Import Imports of goods and “Imports of goods and services represent the value of all goods
services (constant and other market services received from the rest of the world.
2010 US$) They include the value of merchandise, freight, insurance,
transport, travel, royalties, license fees, and other services,
such as communication, construction, financial, information,
business, personal, and government services. They exclude
compensation of employees and investment income (formerly
called factor services) and transfer payments. Data are in
constant 2010 U.S. dollars.”

1. These information is directly quoted from the World Bank Website.

Statistical tools used in this analysis:

I. Hodrick – Prescott (HP) filter

Hodrick-Prescott (HP) filter was used to perform the trend analysis and to calculate the
cyclical components of the data collected. HP filter helped to smooth the data to remove the
short-term fluctuations.
II. Multivariate Regression using Microsoft Excel
Multivariate regression analysis was run to establish the relationship between cyclical
components of Consumption, Investment, Government Expenditure, and Export & Import
with the Business Cycle.
III. Graphical tools- Charts
Different types of charts are used to represent the actual data and trends and cyclical
components of variables.

6
Economic Condition Analysis of Bangladesh (1980-2016)
The collected data of GDP, GDP Deflator, Consumption, Investment, Government Expenditure, and
Export & Import was analyzed. Trend analysis was done using HP filter. Business Cycle components
of each variable was identified and graphed. Following that a multivariate regression was run to
identify the relationship between Business Cycle and other variables cyclical components. Below we
reflected the results of this analysis to the economic conditions of Bangladesh. Outside factors that
are responsible for such condition is also described.

Real GDP

Real GDP is the value of economic output adjusted with inflation. It’s a market value of all finished
goods and services, produced by a countries economy during a certain period of time, adjusted for
the price level. It reflects the accurate image of an economy’s growth using base year prices. We
calculated Real GDP using GDP and GDP deflator data from the WDI database. The base year used
in the calculation of Deflator is unknown, as this information is not provided by World Bank.

Real GDP
$180,000,000,000.00
$160,000,000,000.00
$140,000,000,000.00
$120,000,000,000.00
$100,000,000,000.00
$80,000,000,000.00
$60,000,000,000.00
$40,000,000,000.00
$20,000,000,000.00
$0.00
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016

Figure 1. Real GDP of Bangladesh (1980-2016)

The above chart shows the actual Real GDP of Bangladesh between 1980 and 2016. The base year
of this RDGP is unknown as it is not provided by the World Bank. The Real GDP shows a decrease

7
in the beginning till 1990, after that it grew till 1994, then decreased till 1996. Thereafter it was
increasing with small decreases at certain years.

Trend Analysis of RGDP

$180,000,000,000.00
$160,000,000,000.00
$140,000,000,000.00
$120,000,000,000.00
$100,000,000,000.00
$80,000,000,000.00
$60,000,000,000.00
$40,000,000,000.00
$20,000,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Real GDP Trend

Figure 2. Trend Analysis of RGDP

Figure 2 portrays the Real GDP and the trend of Real GDP of Bangladesh for from 1980 to 2016. Here,
we can see that the real GDP of Bangladesh decreased from1980 to 1990, then Real GDP took an
increasing trend with a steep decrease in 1995-1996. Since then Real GDP trend is constant and growing
slowly.

Business Cycle
$10,000,000,000.00
$8,000,000,000.00
$6,000,000,000.00
$4,000,000,000.00
$2,000,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
-$2,000,000,000.00
-$4,000,000,000.00
-$6,000,000,000.00
-$8,000,000,000.00
-$10,000,000,000.00

Figure 3. Business Cycle of Bangladesh (1980-2016)

8
In figure 3, we can see the chart of cyclical trend of Real GDP or Business Cycle analysis of
Bangladesh from 1980 to 2016. Here we can see a lot of fluctuations that can be the reason for
different expansions and contractions in that period. If we analyze this changes in Business Cycle
along with political scenario of the country, we can find out the reasons behind such rapid
changes(Khan, 2011). The Business Cycle took a hit in every election, and plot changes of the
government. During the era of Military led government of Gen. HM Ershad, the country faced a
negative business cycle from 1984 till 1990. The economy was in recessionary gap during this period.
Since the new democratic government came in power in 1991, the business cycle was changing
towards positive, the Real GDP and GDP also increased between this periods. The economy went to
an inflationary point, as government spending was stable and increasing. But it again went to negative
during the problems with election of 1995 and 1996, when the country faced a lot of strikes from the
opposition party. The economy faced a recessionary gap. After the election, the business cycle
continued to rise, but in a slow pace, as the party in power was not business friendly, also it was not
pro-business centric, also full of corruption. So, the economy continued growing in a recessionary
gap. By the end of their rule and after new election business cycle again boosted up positively till
2003 but started decreasing after 2003 due to strikes and natural calamities. Later it was positive and
grew till a peak in 2007. Then again the country faced a lot of political changes and due to that
business cycle was downward sloping. Finally when the country moved to a more stable position, the
business cycle took a turn towards positive.

Analyzing the Business Cycle and the Trend between 1980 and 2016, we can strongly relate political
situations and natural calamities with the changes. These factors affect how businesses produce, or
people spend. Thus it is affecting the business cycle and trend of Real GDP.

9
Consumption
Consumption Expenditure is total spending by a countries households on goods and services, its final
or in total consumption of a country. Consumption expenditure directly depends on Real GDP.
Ceteris Paribus, if real GDP increases consumption increases, if consumption decreases Real GDP
decreases.

Consumption
$120,000,000,000.00
$100,000,000,000.00
$80,000,000,000.00
$60,000,000,000.00
$40,000,000,000.00
$20,000,000,000.00
$0.00
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Figure 4. Consumption (Actual Data)

Figure 4 shows the actual consumption data collected. A constant growth, other than minor decreases
in the total consumption of the economy. A sheer rise in consumption since 2008 is visible.
Remittance has a high impact in the growth of Bangladeshi Economy (Neogy, 2010). Over the period
of time, more and more worker travelled abroad and remittance inflow increased, which increased
the consumption power of general people. Increasing overall consumption of the economy.
Trend Analysis of Consumption
$120,000,000,000.00

$100,000,000,000.00

$80,000,000,000.00

$60,000,000,000.00

$40,000,000,000.00

$20,000,000,000.00

$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Consumption HP Trend

Figure 5. Trend Analysis of Consumption

10
In the above graph, we have shown the total or aggregate consumption of Bangladesh from 1980 to
2016. Here we can see our total consumption is increasing gradually. From 1980 to 2007 consumption
was not increased much. After 2007 we can see that consumption is increasing radically, as people
are becoming more solvent and income level is rising day by day. Living standard of Bangladesh is
also getting high as people’s income has risen and another vital reason is foreign remittance. Since
foreign remittance is rising, people are consuming more particularly in the rural area. Bangladesh’s
import is rising as well. Our country is moving into more industrial business rather farming. More
people are doing small business apart from service. And more people are coming into business
industries which creates more employee and ultimately income rises as an investment is rising.
Income rise consumption rises.

$2,500,000,000.00
$2,000,000,000.00
$1,500,000,000.00
$1,000,000,000.00
$500,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
-$500,000,000.00
-$1,000,000,000.00
-$1,500,000,000.00
-$2,000,000,000.00
-$2,500,000,000.00

Figure 6. Cyclical Components of Consumption

Here, in this figure-6 we can see the cyclical analysis of Bangladesh from 1980 to 2016. There is high
fluctuation in this trend, for example in 1980 to 1984 there a big fall for excessive rainfall and flood
all over the country, it was a great digester for a country and after that, it gradually improving the
situation. There is a big jump from 1990 to 1995 and once again from 2000 to 2005, there is a
drastically fall, it happens because of natural calamity at that time. From 2005 it's gradually
improving.

11
Investment
Investment is the most crucial element of an economy. Without investment economy won’t grow.
Increase in investment increases aggregate demand and GDP. Unemployment is reduced by
investment as well.

Investment
$60,000,000,000.00

$50,000,000,000.00

$40,000,000,000.00

$30,000,000,000.00

$20,000,000,000.00

$10,000,000,000.00

$0.00

2002
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000

2004
2006
2008
2010
2012
2014
2016
Figure 7. Investment (Actual Data)

Any democratic government ensures justice and increases liability better than an autocracy, which
inspired businesses to invest more. Bangladesh private investment grew constantly and it was
increased quite high after democratic government was in power in 1991. Since 1992 it increased
exponentially. As the political scenario was more stable it grew higher.

Investment Trend Analysis

$60,000,000,000.00
$50,000,000,000.00
$40,000,000,000.00
$30,000,000,000.00
$20,000,000,000.00
$10,000,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Investment Trend

Figure 8. Trend Analysis of Investment

12
Investment increased slowly from 1980 to 1992. Growth rate of investment increased from 1993 to
2000. From 2001 to 2016 the growth rate of investment was higher than before. More jobs were
created from 2000 to 2016. Foreign Direct Investment also played a vital role at increasing investment
over this period(Hussain & Haque, 2016).

Cyclical Component of Investment

$2,000,000,000.00

$1,500,000,000.00

$1,000,000,000.00

$500,000,000.00

$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
-$500,000,000.00

-$1,000,000,000.00

Figure 9. Cyclical Component of Investment

From 1980 to 1987 investment had increased. In 1988 investment started to decrease in continued till
1992. One of the reason of decreasing investment was the flood of 1988. From 1993 invested started
to increase and continued till 1996. From 1996 to 2010 investment decreased because of political
instability. Investment increased again in 2011 and again decreased in 2012-2013 because of the
national election. From 2014 investment started to grow and still growing.

13
Government Expenditure
Government expenditure is an important element in GDP calculation. Government expenditure has a
vital role in GDP growth. Government expenditure increases consumption and investment. All of
these increases aggregate demand and increases GDP.

Government Expenditure
$10,000,000,000.00
$9,000,000,000.00
$8,000,000,000.00
$7,000,000,000.00
$6,000,000,000.00
$5,000,000,000.00
$4,000,000,000.00
$3,000,000,000.00
$2,000,000,000.00
$1,000,000,000.00
$0.00
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Figure 10. Government Expenditure (Actual Data)

As governments needed to answer to people, government expenditure increased, it grew constantly

since 1992. It was stable between 2006-2007, as there were no political party in power. Later it started
to grow more as more development initiatives were taken by the government.

Govt. Exp. Trend Analysis

$10,000,000,000.00
$8,000,000,000.00
$6,000,000,000.00
$4,000,000,000.00
$2,000,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Government HP Trend

Figure 8. Trend Analysis of Investment

14
This graph shows the trend of government expenditure. From 1980 to 1990 government expenditure
was increasing at a very slow rate. From 1990 to 2000 government expenditure was growing at higher
rate than previous years. But from 2000 to 2016 government expenditure was even faster than
previous years.

Cyclical Component of Govt. Exp.

$500,000,000.00

$400,000,000.00

$300,000,000.00

$200,000,000.00

$100,000,000.00

$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
-$100,000,000.00

-$200,000,000.00

-$300,000,000.00

Figure 8. Cyclical Component of Government Expenditure

The graph shows that, government expenditure fluctuated all the time. Government expenditure was
increasing in 1980 and continued till 1986. After 1986 government expenditure started to decrease
and continued decreasing till 1991. After 1991 government expenditure was increased till 1993. From
1993 government expenditure started to fall again. And it continued till 2001. After 2001 it started
to increase and continued till 2006. In 2007 and 2008 government expenditure was decreasing
because of the political condition. From 2009 to 2010 government expenditure increased than
decreased till 2013. After that government expenditure is increasing in a highest increasing rate of
history.

15
Export
Export increases the nation’s reserve of foreign currency and also increases the Real GDP.
Bangladesh has developed different sectors where export is increasing rapidly. The following graph
shows the actual growth of export from 1980 to 2016.

Exports
$30,000,000,000.00

$25,000,000,000.00

$20,000,000,000.00

$15,000,000,000.00

$10,000,000,000.00

$5,000,000,000.00

$0.00
1990
1980
1982
1984
1986
1988

1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Figure 9. Total Export of Bangladesh (Actual Figure)
Exports grew exponentially since 2004. After democracy in 1991, export was in the rise. As
electricity production of the country grew high, export grew. RMG sector also played a significant
role in developing the export(Azad, 1999). Other key industries such as Pharmaceutical Industry,
Fisheries played an important role.

Export Trend Analysis

$35,000,000,000.00
$30,000,000,000.00
$25,000,000,000.00
$20,000,000,000.00
$15,000,000,000.00
$10,000,000,000.00
$5,000,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Exports Trend

Figure 10. Trend Analysis of Export

16
The graph illustrates the trend of export of goods and services from 1980 to 2016. There was an
overall increase in export during this period with some minor falls around 2003 2010 and 2015.
However export remained almost constant from 1980 till 1990 and then on began to rise sharply.

Cyclical Component of Export

$3,000,000,000.00

$2,000,000,000.00

$1,000,000,000.00

$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
-$1,000,000,000.00

-$2,000,000,000.00

-$3,000,000,000.00

-$4,000,000,000.00

Figure 11. Cyclical Component of Export

The graph demonstrates export cyclical trend from the year 1980 to 2016. From 1980 till 1995 the
growth increased overall from $312,134,589.06 to $508,709,038.02 with some minor down falls in
between. However, drastic changes in growth were experienced from 2000 till 2016. The growth
reduced sharply reaching the lowest in 2001 to -$958,937,608.79 and increases again to
$1,914,815,299.57 in 2007. From then on another sharp decrease in 2009 caused the growth to be -
$583,916,813.90 and rose again to reach a highest peak of $1,691,899,768.17 in 2014 and began to
fall again.

17
Imports
As the economy grew over time and the purchase power of people in the country increased. Imports
also grew along with the economic growth.

Imports
$40,000,000,000.00

$35,000,000,000.00

$30,000,000,000.00

$25,000,000,000.00

$20,000,000,000.00

$15,000,000,000.00

$10,000,000,000.00

$5,000,000,000.00

$0.00
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Figure 12. Import (Actual Data)

Import was near to constant from 1982 till 1995, with small increases and decreases. But since
1996, import started to increase, with a dramatic increase in 2004 and 2011. Import was all time
high in 2015.

Import Trend Analysis

$45,000,000,000.00
$40,000,000,000.00
$35,000,000,000.00
$30,000,000,000.00
$25,000,000,000.00
$20,000,000,000.00
$15,000,000,000.00
$10,000,000,000.00
$5,000,000,000.00
$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Imports Trend

Figure 13. Trend Analysis of Import

18
The graph represents imports of goods and services from the year 1980 till 2016. There was an overall
increase within this period however the import almost stayed constant from 1980 till 1995 and then
on began to increase some falls around 2002-2003, in 2010 and 2016. Nonetheless, the imports
increases from 5 billion to 37 billion over the whole time period.

Cyclical Component of Import

$6,000,000,000.00

$4,000,000,000.00

$2,000,000,000.00

$0.00
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
-$2,000,000,000.00

-$4,000,000,000.00

-$6,000,000,000.00

Figure 14. Cyclical Changes in Import

This figure is a graphical representation of import cyclical trend from 1980 to 2016. There was a
sharp fall in growth in 1981 from $1,549,064,979.27 to -$662,190,019.94. However, the growth
began to rise around 1982 and kept on increasing till 1990 and reached $657,170,997.70. In 1992 the
growth decrease but recovered again in 1996; after which the growth began to reduce again, reaching
the lowest peak with a sharp decrease from the year 2001 to 2003 where the growth was -
$5,137,880,509.41. From then on, there was a rapid increase till 2007 where growth reached its
maximum peak of about $4,253,820,038.26. Yet, the growth began to reduce again and reached -
$3,373,044,313.49 in 2010 but also increased in the next few years where it rose to $3,323,094,270.07
in 2012 and began to fall sharply again to -$4,120,035,394.35. The most drastic changes in growth
was in the period of 2000-2016 when the country faced massive ups and downs before which, that is,
from 1980-1995 the changes were not extreme, comparatively.

19
 Regression Analysis
Multivariate regression analysis was run using Microsoft Excel to find out the relationship between
cyclical component of Real GDP (Business Cycle) and the cyclical components of the other variables.
The summary of the result is given below:

Regression Statistics
Multiple R 0.6293
0.3960
R Square
Adjusted R 0.2986
Square
Standard
Error 3109234426
Observations 37

ANOVA
df SS MS F Significance F
Regression 5 1.9648E+20 3.92961E+19 4.065 0.0059
Residual 31 2.99688E+20 9.66734E+18
Total 36 4.96168E+20

Standard P- Lower Upper Lower Upper

Coefficients Error t Stat value 95% 95% 95.0% 95.0%
- -
10425074 10425074 104250 10425
Intercept 0.000218 511154990.9 4.2613E-13 1 77 77 7477 07477
Consumpti
on Cycle 1.320 0.607 2.174 0.0375 0.0815 2.559 0.082 2.559
Govt Exp 5.2434
Cycle 14.644 4.609 3.177 0.0034 24.044 5.243 24.044
Investment -6.4510
Cycle -3.727 1.336 -2.790 0.0089 -1.002 -6.451 -1.002
Exports -0.2401
Cycle 2.469 1.328 1.859 0.0726 5.179 -0.240 5.179
Import -3.9003
Cycle -2.080 0.892 -2.332 0.0264 -0.261 -3.900 -0.261

20
The result of the regression indicates that the model explains 39.60% of the variance. The simple
correlation between the dependent variable and the independent variables is, R = 0.6293, which
indicates a good enough degree of correlation. The results also indicate that the model was a
significant predictor of Business Cycle, F (5, 31) = 4.065, p = 0.0059. The following equation
represents the final predictive model:

Business Cycle = 0.000218 + (1.320*Consumption Cycle) + (14.644*Govt. Exp. Cycle) +

(-3.727* Investment Cycle) + (2.469*Exports Cycle) + (-2.080*Import Cycle)

Further analysis of the model reveals that Government Expenditure Cycle have the highest
significance in the model with a p value of 0.0034 and t-stat of 3.177, so changes in government
expenditure will bring higher positive changes to the business cycle. Where, Exports cycle have the
lowest significance at all as the p value 0.0726 and t-stat of 1.859. Exports cycle have only accidental
significance to the dependent variable Business Cycle. All the other variables has significance in the
model. From the equation it can be stated that Consumption Cycle, Govt. Expenditure Cycle and
Exports Cycle has a positive influence on Business Cycle, whereas Investment Cycle and Import
Cycle has a negative influence.

Conclusion
Initially Bangladesh had an import based economy. Over time it started focusing more than import
and now exports are growing further. As Bangladesh was ruled by military led dictatorship for a long
time, economic growth was not higher. But after 1991, as democracy stepped in, Bangladesh’s
economy saw drive towards growth. New policies, business friendly environment, employment and
development initiatives by the government ensured this growth. Though a lot of natural calamities
hit between 1980 and 2016, still Bangladesh managed to grow and hopefully will become a developed
nation in the near future.

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