Has Bangladesh Really Left India and Pakistan Behind in Per Capita Income?

Is Bangladesh's officially reported GDP figure credible? Do consumption figures support Bangladesh's claim of higher per capita income than India and Pakistan?  Is it the recent rebasing of GDP that boosted Bangladesh's per capita income above India's and Pakistan's? If Bangladesh has higher GDP per capita, why is its per capita consumption of energy, cement and steel so much lower than India's and Pakistan's? Does Pakistan really have a much larger informal economy than Bangladesh or India do? How long has it been since Pakistan rebased its GDP calculations? Is there a lot more currency in circulation in Pakistan than in Bangladesh and India? Let us try and answer these questions! 

Rebasing GDP:

Bangladesh just rebased its GDP in 2020-21 to year 2015-16. This has boosted its per capita income by double digits for every year since 2015-16.  Bangladesh's per capita income for the 2015-16 fiscal year has now gone up to $1,737 from $1,465 in the old calculation. For the 2019-2020 fiscal, the per capita income has gone up to $2,335 from $2,024.  The new GDP estimate covers 21 sectors, up from 15 sectors previously.  India last rebased its GDP in 2015, a change that bumped up its per capita GDP by double digits. Nigeria's last rebasing in 2012 increased the size of its economy (GDP) by nearly 90%. Pakistan's current base year is 2005-6. Rebasing which is now long overdue will almost certainly increase Pakistan's per capita income by double digits. 

In its 2014 annual report, the State Bank of Pakistan talked about a number of new sectors that are either under-reported or not covered at all: "In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM."

Pakistan's last economic census was done in 2003 and published in 2005, livestock census in 2006  and agriculture census in 2010. The country's economy has changed significantly since then, adding several new economic activities while others may have diminished.  The Quantum Index of Large Scale Manufacturing (QIM) with 2005-06 base year gives a weight to textiles of 20.9% (Yarn 13.7 and cloth 7.2). But the textile industry has significantly changed as reflected in its exports. The value added textiles (non-yarn and non-cloth) now make almost 80% of the total textile exports. These changes are not reflected in current GDP calculations. 

Primary Energy Consumption Per Capita. Source: British Petroleum St...

Energy consumption:

Life in modern times is heavily dependent on energy. Per capita energy consumption, a key barometer of economic activity, is significantly lower in Bangladesh than in India and Pakistan.  Use of electricity per capita in Bangladesh is significantly less than in India and Pakistan. 

Energy Consumption Comparison in Bangladesh, India and Pakistan. So...

Commercial energy use (kg of oil equivalent per capita) above refers to apparent consumption, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport. It's only 142 Kg of oil per capita in Bangladesh, much lower than 463 Kg in Pakistan and 494 Kg in India.  

A more recent British Petroleum "Statistical Review of World Energy 2021" puts the per capita primary energy consumption at 9.7 Gigajoules (232 kilogram of oil equivalent) for Bangladesh, 15.7 Gj (375 kgoe) for Pakistan and 23.2 Gj (554 kgoe) for India. 

Per capita consumption of primary energy in Bangladesh has grown by 59% (6.1 Gj to 9.7 Gj) since 2010, much faster than 25% (18.2 Gj to 23.2 Gj) in India and just 6% (14.8 Gj to 15.7 Gj) in Pakistan, according to the British Petroleum's "Statistical Review of World Energy 2021". This indicates much faster economic growth in Bangladesh than India or Pakistan in the last decade. 

Cement Consumption:

Use of cement is another important indicator of economic and development activities, particularly in the infrastructure and housing construction sector.  China and the United States, the world's biggest economies, also have the highest consumption of cement. 

Cement Consumption. Source: International Cement Review

Steel Consumption:

Per capita steel consumption is another important indicator of economic activity in both construction and manufacturing sectors.  It goes into building housing and infrastructure as well manufacturing vehicles and home appliances. The United States and China, the world's biggest economies, are the largest consumers of steel. 

Per Capita Steel Consumption. Source: National Steel Advisory Council

Bangladesh is among the lowest consumers of steel products in the world. Per capita consumption of finished steel in Bangladesh (41 Kg) is lower than the regional peer Myanmar (40.5), India (75.3), Pakistan (45.7), Sri Lanka (53.5), according to the World Steel Association (WSA).

Pakistan's Informal Economy:  

 One way to estimate the size of the informal economy in any country is by looking at the amount of currency in circulation relative to overall money supply. This data is published regularly by all central banks in South Asia and elsewhere. Pakistan's currency in circulation to M2 ratio (about 30%) is more than double the ratios in Bangladesh (13%) and India (15%), indicating that the informal economy in Pakistan is much bigger.

Dr. Lalarukh Ejaz, an assistant professor at the Institute of Business Administration in Karachi, has estimated the size of Pakistan’s informal economy at 56% of the country’s GDP (as of 2019). This means that it’s worth around $180 billion a year, and that is a massive amount by any yardstick. 

Vehicles and home appliance ownership data analyzed by Dr. Jawaid Abdul Ghani of Karachi School of Business Leadership suggests that the officially reported GDP significantly understates Pakistan's actual GDP.  Indeed, many economists believe that Pakistan’s economy is at least double the size that is officially reported in the government's Economic Surveys. 

Back in 2014,  the State Bank of Pakistan stated in its Annual Report as follows: "In terms of LSM growth, a number of sectors that are showing strong performance; (for example, fast moving consumer goods (FMCG) sector; plastic products; buses and trucks; and even textiles), are either under reported, or not even covered. The omission of such important sectors from official data coverage, probably explains the apparent disconnect between overall economic activity in the country and the hard numbers in LSM."  Pakistan's GDP has not been rebased in more than a decade. It was last rebased in 2005-6 while India’s was rebased in 2011. The recent rebasing of Bangladesh GDP to year 2015 has boosted its per capita income of Bangladesh for year 2016-16 and all subsequent years . The per capita income for the 2015-16 fiscal year has now gone up to $1737 from $1465 in the old calculation For the 2019-2020 fiscal, the per capita income has gone up to $2335 from $2024. Just rebasing the Pakistani economy will result in double digit increases in GDP for the last several years. 

Estimates of Informal Economies in Asia in 2012. Source: IMF

A research paper by economists Ali Kemal and Ahmad Waqar Qasim of PIDE (Pakistan Institute of Development Economics) estimated in 2012 that the Pakistani economy’s size then was around $400 billion. All they did was look at the consumption data to reach their conclusion. They used the data reported in regular PSLM (Pakistan Social and Living Standard Measurements) surveys on actual living standards. They found that a huge chunk of the country's economy is undocumented. 
Currency in Circulation to M2 Ratio Trends. Source: Business Recorder

 

Pakistan's Service Sector: 

Pakistan's service sector which contributes more than 50% of the country's GDP is mostly cash-based and least documented. Compared to Bangladesh and India, there is a lot more currency in circulation as a percentage of overall money supply in Pakistan. According to the State Bank of Pakistan (SBP), the currency in circulation has increased to Rs. 7.4 trillion by the end of the financial year 2020-21, up from Rs 6.7 trillion in the last financial year,  a double-digit growth of 10.4% year-on-year.   Currency in circulation (CIC), as percent of M2 money supply and currency-to-deposit ratio, has been increasing over the last few years.  The CIC/M2 ratio is now close to 30%, according to the State Bank of Pakistan. The average CIC/M2 ratio in FY18-21 was measured at 28%, up from 22% in FY10-15. This 1.2 trillion rupee increase could have generated undocumented GDP of Rs 3.1 trillion at the historic velocity of 2.6, according to a report in The Business Recorder. In comparison to Bangladesh (CIC/M2 at 13%), Pakistan’s cash economy is double the size. Even a casual observer can see that the living standards in Pakistan are higher than those in Bangladesh and India. 

Exports as Percentage of GDP in South Asia. Source: World Bank

Exports:

Pakistan has performed poorly in exports growth relative to Bangladesh and India since about 2007. This has been the key source of its balance of payments crises and its repeated need for IMF bailouts. Pakistan's economic growth has essentially been constrained by its recurring balance of payment (BOP) crises as explained by Thirlwall's Law

Summary:

Bangladesh just rebased its GDP in 2020-21 to year 2015-16. This has boosted its per capita income by double digits for every year since 2015-16, raising it above India's and Pakistan's. Based on published data on energy, cement and steel consumption, Bangladesh's claim of having a per capita GDP higher than India's and Pakistan's does not seem credible. In this age of growing energy-intensive industrialization, it does not make sense to have significantly lower use of key inputs like energy to produce higher gross domestic product. For Pakistan, it is important for policymakers to promote ways of documenting more of the economy. It's also important for finance officials to rebase the country's GDP to a more recent year than the year 2006 when it was last done. 

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Comment by Riaz Haq on December 20, 2021 at 2:38pm

Cement sales in Pakistan ticked up 6.91% in November 2021 as total offtake stood at 4.82 million tons against 4.5 million tons in the corresponding month of previous fiscal year.

https://tribune.com.pk/story/2332780/cement-sales-pick-up-7-in-nove...

According to data released by the All Pakistan Cement Manufacturers Association (APCMA) on Monday, domestic cement demand stood at 4.12 million tons in November 2021 compared to 3.74 million tons in November 2020, depicting an increase of 10.21%.

On the other hand, exports of the commodity fell 9.2% from 766,273 tons in November 2020 to 695,779 tons in November 2021.

In November 2021, mills based in the northern region sold 3.47 million tons of cement in the domestic market, which was 10.87% higher than sales of 3.13 million tons in November 2020.

Domestic offtake from mills based in the southern part of the country came in at 654,983 tons during the month under review against 613,113 tons in November 2020, a rise of 6.83%.

Exports from north-based mills plunged 69.67% as the quantity plummeted from 182,091 tons in November 2020 to just 55,234 tons in November 2021.

Meanwhile, foreign shipments from south-based mills rose 9.65% to 640,545 tons in November 2021 while the region exported 584,182 tons in the same month of last year.

Jul-Nov numbers

In the first five months (July-November) of current fiscal year, total cement sales came in at 22.86 million tons, down 4.11% from 23.83 million tons in the corresponding period of previous fiscal year.

Domestic sales of the commodity registered a slight increase of 2.84% to 20 million tons in July-November 2021 as against 19.46 million tons in July-November 2020.

Moving on to exports, foreign shipments of cement fell 34.92% to 2.85 million tons in July-November 2021 from 4.38 million tons during July-November 2020.

North-based mills sold 16.8 million tons of cement in the domestic market during the first five months of current fiscal year, showing a marginal increase of 0.17% compared to 16.76 million tons supplied in July-November 2020.

Exports from the northern region declined 52.56% to 516,003 tons during July-November 2021 against 1.09 million tons in the same period of last year.

Domestic sales by mills based in the southern region stood at 3.22 million tons during July-November 2021, registering a rise of 19.4% as opposed to 2.7 million tons in the same period of previous fiscal year.

There was, however, a substantial decline of around 29.1% in exports from the south as volumes reduced to 2.34 million tons in the first five months of current fiscal year compared to 3.3 million tons during the corresponding period of last year.

Comment by Riaz Haq on December 20, 2021 at 2:39pm

Reviewing the industrial sector, the report said 24pc growth in oil sales was reported by the Oil Marketing Companies. “112pc growth in production of cars shows phenomenal economic activity during the 1QFY22 in the manufacturing sector,” it added.

https://www.dawn.com/news/1660508

Aggregate demand pressures are evident from 84pc rise in car sales in the 1QFY22, 65pc increase in imports and massive spike in demand for consumer credits, it said.

Demand of high-speed diesel has increased by 26pc whilst petrol consumption has risen by 14pc and electricity consumption rose by 13pc during 1QFY22, the report added.

Comment by Riaz Haq on December 22, 2021 at 11:02am

Pakistan's cement and clinker exports has reported mixed results between July 2021 and November 2021. According to a research house, exports observed a negative trend on a cumulative basis driven mainly by the political crisis in Afghanistan, as exports from the north reportedly remained disturbed. Elsewhere, exports from southern plants posted nominal growth.

The industry earned US$115.99m in export revenue by dispatching 3.20Mt of cement and clinker overseas in the 5MFY21-22 (1 July-31 November 2021), compared to US$123.67m from 3.73Mt of exports in the year-ago period. Therefore, seeing a decline of 6.2 per cent and 14.6 per cent in dollar terms and quantity, respectively.

However, in November 2021, export revenues surprisingly increased 393.1 per cent MoM to US$50.54m on the shipment of 1.40Mt (+462.7 per cent MoM), compared to US$10.24m from 248,833t of exports in October.

Production in the 4MFY21-22
During July-October 2021, Pakistan's cement production decreased by 2.7 per cent YoY to 15.982Mt from 16.433Mt in the year-ago period. In October 2021 alone, production fell 15.6 per cent to 4.479Mt from 5.123Mt in the same month last year.

https://www.cemnet.com/News/story/171959/pakistan-sees-exports-surg...

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Exports of textiles from Pakistan surged in the first five months of current fiscal year with the knitwear sector growing by more than 36 per cent.

https://www.knittingtradejournal.com/flat-knitting-news/14826-welco...

-----------------

According to the Pakistan Tanners Association Annual Report (2020-21), foreign shipments of leather and leather products from Pakistan increased by 8.86% from $765.35 million in fiscal year 2019-20 to $833.19 million in fiscal year 2020-21. Former Pakistan Tanners Association chairman Agha Saiddain lamented that in 2007-08, the leather exports stood at $1.25 billion per year and now, they had declined to $833 million.

With regard to the structure of leather exports, according to the Pakistan Bureau of Statistics, around 20% of total exports in fiscal year 2020-21 comprised finished leather, 34% leather garments, 31% gloves, 13% footwear and 2% leather goods.

“It is a strange thing that the export of footwear is less and leather garment is more,” Saiddain said. “The global figures are not like that. In the world, footwear makes up 65% of total leather exports.”

He added that Pakistan had not worked on their footwear sector and there were no joint ventures. Besides, the law and order situation in Karachi was unsuitable for big brands, he said.

Citing that China was the largest producer of footwear and leather goods and Pakistan produced excellent leather for big brands with lower labour costs, he was of the view that there was immense potential for cooperation between the two countries to create a win-win situation. He also suggested inclusion of joint ventures in the Special Economic Zones under the China-Pakistan Economic Corridor (CPEC).

He added that tanneries could process raw material from all over the region in Pakistan including those imported from Uzbekistan, Tajikistan, Iran, Afghanistan and Azerbaijan.

“Currently, we are utilising only 50% of our tanning capacity and 50% more capacity exists. It takes no time in increasing the capacity,” he said.

https://www.leathermag.com/news/newspakistan-leather-exports-surge-...

Comment by Riaz Haq on December 22, 2021 at 11:03am

IT exports increase by 37.57% in five months

https://pakobserver.net/it-exports-increase-by-37-57-in-five-months/

The Information Technology (IT) related exports have witnessed a 37.57 percent growth in the first five months of the current Financial Year (FY).

ICT export remittances, including telecommunication, computer, and information services for the period July-November FY2021-22 have surged to the US $1.051 billion at a growth rate of 37.57% in comparison to the US $764 million during July-November FY 2020-21, said the ministry of Information Technology in a statement here on Tuesday. In November 2021, the ICT export remittances were $221 million at a growth rate of 31.55% as compared to $168 million reported for the month of November 2020.

It is also $26 million higher than export remittances during the previous month October 2021. The net exports for the period July-November FY2021-22 stood $797 million which was 75.83% of $1.051 billion in exports.—APP

Comment by Riaz Haq on December 22, 2021 at 7:28pm

Arif Habib Limited
@ArifHabibLtd
Current Account Balance 5MFY22

CAB: $-7,089mn
Remittances: $12.9bn (+10% YoY)
Total imports: $33.9bn (+60% YoY)
Total exports: $15.1bn (+28% YoY)


https://twitter.com/ArifHabibLtd/status/1473249413598482436?s=20

Full Report

https://arifhabib.com/r/CAD_5MFY22.pdf

Comment by Riaz Haq on December 25, 2021 at 4:15pm

Market insiders said around 5 lakh motorcycles were sold (in Bangladesh) in 2019, up 25 percent from 4 lakh previous year, while sales reduced to 311,016 units in 2020 due to the impact of Covid-19.

https://www.thedailystar.net/supplements/world-motorcycle-day-2021/...

Atlas Honda has recorded the highest ever monthly motorcycle sales in Pakistan. As many as 128,503 units were sold in November 2021, according to the market sources.

https://www.samaa.tv/money/2021/12/atlas-honda-records-highest-ever...

Sales down by 36 percent for top four two-wheeler companies in India

On December 1, four hours after it released its wholesales numbers for November, Bajaj Auto, which is currently ranked fourth in India, in terms of domestic market share, announced that it had become the No. 1 motorcycle manufacturer in November – domestic and export numbers (3,38,000 units) combined. Hero MotoCorp, which is ranked first in domestic motorcycle wholesale for November, sold 3,29,185 units.

https://www.autocarindia.com/bike-news/sales-down-by-36-percent-for...

Comment by Riaz Haq on December 25, 2021 at 4:35pm

Motorcycles sales data for 2019 from Statista:

Bangladesh: 650,000

Pakistan: 1,800,000

India: 15,000,000

Comment by Riaz Haq on December 25, 2021 at 5:21pm

Bangladesh: Growth Miracle or Mirage? | Center For Global Development


https://www.cgdev.org/blog/bangladesh-growth-miracle-or-mirage


Bangladesh’s growth stems in large part from its success as an exporter of garments, which account for 84 percent of its total exports, and remittances from overseas, which amount to over 6 percent of GDP (Figure 2). The principal driver of growth is investment, which has risen from 24 percent of GDP in 2000 to 32 percent in 2019. Very little is derived from total factor productivity—below 1 percent per annum since 2000—the primary determinant of long-term growth of incomes for all countries. To paraphrase Paul Krugman, it is perspiration, not inspiration, that is responsible for Bangladesh’s performance to date.


A closer look raises other questions over the quality of this economic record.

First is the extreme dependence on a single category of exports (SITC 841-846) and the low share of exports to GDP. Whereas a country like South Korea managed to diversify away from resource-based products, garments and footwear within a matter of fifteen to twenty years—starting in 1963—and emerged stronger as an exporter of complex products including steel, machinery, chemicals, transport equipment, and consumer electronics, Bangladesh remains focused on a narrow range of relatively low-value garments more than forty years after the industry took root in 1977-1982, following investment by Korea’s Daewoo in Desh Garments and denationalization of the textile industry (Figures 3&4). T-shirts, trousers, sweaters, and shirts remain the dominant export items and 80 percent of exports were to the relatively slow-growing markets in the European Union and the United States. Although Bangladesh has attempted to diversify into pharmaceuticals and can meet most of domestic demand, export earnings were a mere $130 million in 2019.

Second is the falling share of exports in GDP, which fell to 15 percent in 2019 from a peak of 20 percent in 2012, far short of Vietnam’s ratio of 107 percent (Figure 5). In addition, the economic complexity of Bangladesh’s trade has also slipped (that ranking is down from 77 in 1991 to 123 in 2017).

Third, needed diversification is slowed by the weakness of private investment in new industries, which has been exacerbated by constraints on the availability of credit, especially to small and medium enterprises. The entry and growth of firms is also hampered by the deterioration of the business environment: Bangladesh was ranked 65th of 155 countries in 2006 in the World Bank’s Doing Business index. By 2020, it was in 168th place of 190 countries. Bangladesh was ranked 105th by the World Economic Forum’s Global Competitiveness Index for 2019, down two places from 2018.

Comment by Riaz Haq on December 25, 2021 at 5:21pm

Bangladesh now a $409b economy: GDP size up, growth down as new base year takes effect

https://www.thedailystar.net/business/economy/news/gdp-size-growth-...

For example, Bangladesh's gross domestic product (GDP) grew at a pace of 8.15 per cent in fiscal 2018-19, the highest on record, as per the base year 2005-06. But the growth rate fell to 7.88 per cent as per the new base year of 2015-16.

A base year is a benchmark with reference to which national account figures such as GDP, gross domestic saving and gross capital formation are calculated.

According to the new base year, Bangladesh was an economy of Tk 34,840 billion in current prices in FY21, up 15.7 per cent from Tk 30,111 billion as per the previous base year.

In constant prices, it stood at Tk 27,939 billion in FY21 as per the new base year, up from Tk 12,072 billion as per the old base year, according to a document of the BBS.

In terms of dollars, the GDP size stood at $409 billion in the last fiscal year if Tk 85 per USD exchange rate is taken into account. Per capita income rose to $2,554 in FY21 as per the new calculation, which was $2,227 as per the old one.

Speaking to The Daily Star, Prof Shamsul Alam, state minister for planning, said the adoption of the new base year should have been done earlier.

Although economic growth has fallen as per the new base year, it has painted the real picture of the economy.

"The size of our economy is huge, and the new base year will reflect it," he said, adding that a real scenario would allow the government to make more informed policy decisions.

Zahid Hussain, a former chief economist of the World Bank's Dhaka office, also welcomed the new base year.

He said timely revisions to data on GDP and its components determine the accuracy of national account estimates and their comparability across countries.

With the finalisation of the new series, Bangladesh will be ahead of all other Saarc countries in terms of the recency of the national account's base year.

Only the Maldives (2014) and India (2011-12) come close, while Pakistan (2005-06) and Sri Lanka (2010) are well behind.

"Improved data sources increase the coverage of economic activities as new weights for growing industries reflect their contributions to the economy more accurately," said Hussain.

The last revision was done in 2013.

The size of the agriculture, industry and services sectors has expanded as per the new base year.

The new base year uses data on about 144 crops while computing the contribution of the agriculture sector to the GDP, which was 124 crops in the previous base year.

The gross value addition by the agriculture sector rose to Tk 4,061 billion in current prices in the last fiscal year, up from Tk 3,846 billion in the old estimate, the BBS document showed.

The industrial sector saw the addition of the data on the outputs of Ashuganj Power Station Company, North-West Power Generation Company, Rural Power Company, cold storage for food preservation, Rajshahi Wasa, and the ship-breaking industry.

In the new base year, the gross value addition of the sector stood at Tk 11,362 billion in FY21 while it was Tk 8,944 billion as per the old base year.

The BBS also carried out surveys to cover the contribution of various new services.

The data about growing ride-sharing services, privately run motor vehicles, national flag carrier Biman, private carriers US-Bangla and Novoair, private helicopter services, Bangladesh Submarine Cable Company, motion pictures, cinema halls, new banks, mobile financial services, agent banking, and private healthcare services were included.

The sector's value addition increased to Tk 18,098 billion in FY21 compared to Tk 16,144 billion from the old base year.

In a positive development, the investment-GDP ratio rose to 30.76 per cent in the last fiscal year compared to 29.92 per cent in the old base year of 2005-06.

A BBS official said the new base year would be used while calculating the GDP and other figures from now on.

Comment by Riaz Haq on December 26, 2021 at 6:36pm

Bangladesh's per capita income has increased to $2554 (USD) from $2227, a jump of nearly 16 percent, thanks to a new base year for calculating the country's gross domestic product (GDP).


https://www.tbsnews.net/economy/rebased-gdp-increases-capita-income...


The government recently finalized 2015-16 as the new base year to calculate (GDP). All national accounts will from now on be based on this new base year. Previously the government was using a base year of 2005-6.

Officials at the Bangladesh Bureau of Statistics (BBS) said the marked increase in the size of the GDP itself and attendant changes in per capita income will accrue mainly due to the inclusion of some new sectors in the calculation and price changes between the two periods.

Rebasing the GDP is the process of replacing an old base year with a more recent base year to keep up with the evolution in prices. In Bangladesh, the usual practice was to revise GDP base year every 10 years. The last time it was done was in 2013, when the base year was changed from 1995-96 to 2005-06.

However economists contend that increased economic growth and per capita income are not translating to a balanced distribution of national income among the people, leading to increased inequality where the benefits of growth are reaped by the few, not the many. Inequality has been further exacerbated during and by the Covid-19 pandemic, they said.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), was one of the economists who raised that point to UNB, even as he conceded there was some benefit from the relatively high economic growth, i.e . GDP growth, and its attendant per capita income growth.

"The ordinary people are benefiting from something. But it remains to be seen whether those gains will contribute to a transformation in the livelihoods of poor people," he added.

The new base year means GDP figures for every year since will also change. As such, the per capita income for the 2015-16 fiscal year has now gone up to $1737 from $1465 in the old calculation

For the 2019-2020 fiscal, the per capita income has gone up to $2335 from $2024.

The news that Bangladesh had surpassed big neighbour India on the per capita income score, a measure of prosperity, caused a big ripple in 2020. According to the International Monetary Fund's (IMF) latest forecast released last month (October), Bangladesh is likely to maintain that lead through to the next fiscal - a shift from its earlier position that India was likely to quickly regain the lead.

But now it estimates Bangladesh's per capita GDP at current prices will be $2,138 in 2021, while India's will be $2,116. The rebasing is likely to bump the lead even higher.

India last rebased its GDP in 2015, a change that had bumped up the figure substantially. Nigeria's last rebasing in 2012 increased the size of its economy (GDP) by nearly 90 percent.

Rebasing is important in emerging economies with large informal sectors such as Bangladesh to capture more and more sections of the informal economy under formal reporting of national income, besides new or budding sectors that are growing fast. The new estimate of GDP comprises 21 broad sectors instead of the previous 15.

Talking to the news agency, a BBS official said the main objective of the project was to sensor modernisation of national accounts and related statistics in line with international guidelines and recommendations.

The other specific objective of the project is to improve different methods of GDP compilation. Updating GDP data series (base 2005-06) from 1972-73 to date, and developing a database on GDP (base 2015-16) from 1972-73 to date using software, will also fall under the project.

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