On 2009-10 economic growth
Every April or May, the Bangladesh Bureau of Statistics releases provisional national accounts for the current financial year. Essentially, this involves taking the available data for the first 9 months or so of the year and estimating a year average. Then, 12 months later, the final accounts are released. Obviously, the final estimate is going to be reflect revisions to the provisional account.
Now, if the BBS provisional accounts were unbiased, one would expect that revisions were equally likely to be upward or downward. In some years, BBS would underestimate the strength of the economy, in other years it would overestimate things. Turns out, BBS usually has a bias — its provisional estimates are more often than not too optimistic.
This is shown in the chart o the left. Here, the provisional growth estimate is on the vertical axis, and the final one is on the vertical. If there is no revision in a year’s growth rate, then the dot will be on the 45 degree line. Years where the final estimates are lower than the provisional one is below the 45 degree line. In 12 of the past 16 years, the final estimates are lower than provisional (that is, provisional was too optimistic). Only four years bucking this trend were 2000-01, 2003-04, 2004-05 and 2009-10.
In its provisional estimate for 2009-10, the BBS had the economy growing at 5.5%. This included the agriculture sector growing by 3% in that year. The government strongly disagreed with the BBS assessment. The Agriculture Minister publicly scolded the BBS officials. And then, the 2010-11 Budget explicitly rejected the BBS estimate, claiming that the agriculture sector would have grown by 4.4% in 2009-10, and the whole economy would have grown by 6%.
In its final estimate, released recently, the BBS says the economy grew by 5.8%. The agriculture sector growth, however, has been revised up to a whopping 4.9%. To put it in context, in the past two decades, agriculture sector grew faster on only 4 occassions (of which, two were 1999/2000 and 2005-06, following the 1998 and 2004 floods respectively).
That is, the final BBS numbers show a super duper harvest in the first half of 2010, coming after bumper crops in 2008-09. Pity that these fantastic farm produces were not reflected in food prices, which continued to grow strongly throughout 2010 — see the chart below.