Bangladesh's per capita income has jumped by 16 per cent to $2,554 from $2,227 thanks to the change in GDP calculating base year from 2005-06 to 2015-16.
The government recently finalized 2015-16 as the new base year for calculating (GDP).
Officials at the Bangladesh Bureau of Statistics (BBS) said the increase in the size of the GDP itself and attendant changes in per capita income occurred mainly due to the inclusion of some new sectors in the calculation and price changes between the two periods. “However, it is yet to be approved officially by the planning ministry. From BBS, we just forward the data based on the new base year to the Statistics and Informatics Division“ Ziauddin Ahmed, Director at BBS, told the Daily Sun on Thursday.
A base year is used as a benchmark against which national account figures such as GDP and per capita income are calculated.
The per-capita income of a country, or the average income per person of that country, is calculated by adding the income from all domestic sectors, including agriculture, manufacturing and services.
In Bangladesh, the usual practice was to revise the 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, some economists said 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.
Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said, “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.”
Experts said changing the base year of GDP calculation 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.