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Bangladesh Economy Records 6.12% Growth in Q3

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Bangladesh’s economy grew by 6.12% in the third quarter (January-March) of the recently concluded fiscal year, showing a significant recovery from the second quarter’s 3.78% growth. This recovery was driven by substantial growth across key sectors – agriculture, industry, and services, according to the latest data from the Bangladesh Bureau of Statistics (BBS).

Despite the robust third-quarter performance, the economy needs to grow by over 7% in the final quarter to meet the revised annual growth target of 5.8% for FY2023-24. This target comes after the GDP growth fell to 3.78% in the second quarter from 6.01% in the first quarter (July-October) of FY24. The third-quarter growth of 6.12% was a significant improvement compared to the 2.30% growth seen in the same period of the previous fiscal year.

Regarding the $10 billion overstatement in export figures and its impact on growth calculations, economist Prof Mustafizur Rahman told The Business Standard, “The size of GDP will change due to the discrepancy in export earnings, but it may not impact growth. This discrepancy pertains to the previous fiscal year, so a portion of exports will be excluded from fiscal 2022-23.”

Prof Rahman, a distinguished fellow of the Centre for Policy Dialogue, noted that the average growth for the first three-quarters of FY24 stands at around 5.3%. To meet the government’s target of 5.82% for FY24, the fourth quarter will need a significant boost in growth.

BBS officials stated they have not received official information from any government agency regarding the export figure discrepancies. As a result, they are using the same data as before for GDP calculation. Currently, BBS is receiving different export figures on different days and plans to revise GDP figures once they receive official information from the Export Promotion Bureau (EPB).

Planning Minister Abdus Salam acknowledged the discrepancy in export data from the EPB on Tuesday (9 July), stating it would lead to a decrease in per capita income and GDP size.

The GDP amounted to Tk13.48 billion in Q3, up from Tk11.44 billion in the same quarter last year. The agriculture sector’s contribution to GDP saw a substantial increase from 1.88% in Q3 of FY23 to 5.46% in the last fiscal year. The industry’s contribution also rose by 2.05 percentage points to 7.03%, while the service sector’s contribution grew from 1.47% to 4.97%.

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China’s economy grew less than expected in second quarter: official data

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China’s economy grew 4.7 percent year-on-year in the second quarter of 2024, official data showed Monday, less than analysts had expected.

“By quarter, the GDP for the first quarter increased by 5.3 percent year on year and for the second quarter 4.7 percent,” Beijing’s National Bureau of Statistics (NBS) said in a statement.

The figures were much lower than the 5.1 percent predicted by analysts polled by Bloomberg.

Retail sales — a key gauge of consumption — also slowed to just two percent in June, the NBS said, down from 3.7 percent in May.

The world’s second-largest economy is grappling with a real estate debt crisis, weakening consumption, an ageing population and trade tensions with Western rivals.

Top officials are meeting in Beijing on Monday for a key plenum, with all eyes on how they might kickstart lacklustre growth.

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Concerns Mount Over Revenue Loss as South Asia’s Largest Land Port Curtails Operations

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Bangladeshi officials are grappling with fears of revenue loss as the largest land port in South Asia, situated along the India-Bangladesh border, has ceased operations for 10 hours each day since July 11.

The Petrapole Land Port in India, crucial for trade between the two nations, has been shutting down from 6 PM to 8 AM daily, without providing any explanation for the closure, according to officials from the Benapole Land Authority in Bangladesh. This unexpected halt has left Bangladeshi authorities and traders in a state of uncertainty, as there is no indication of when the operations might resume to normalcy.

Industry insiders warn that this disruption could lead to a significant revenue shortfall at Benapole port due to decreased imports, adversely affecting Bangladeshi importers with delayed product deliveries.

Rezaul Karim, Director of Traffic at Benapole Land Port Authority, emphasized that while Benapole has been maintaining 24-hour operations, Petrapole’s recent restrictions are hindering cargo truck movements after evening.

“We have inquired with the Petrapole port authority about the reasons for halting trade services after evening. They responded that the matter is under discussion with relevant authorities,” Karim said.

Sultan Mahmud Bipul, Secretary of Benapole C&F Agent Association International Checkpost Affairs, highlighted the fiscal implications of this disruption. “Benapole port has set a revenue target of Tk6,705 crore from imported goods for the fiscal year 2024-25. If the 24-hour import facility remains discontinued, it will severely impact our revenue targets,” he noted.

Ziaur Rahman, General Secretary of Benapole Landport Importers and Exporters Association, pointed out the severe impact on trade, particularly with perishable goods. “Traders dealing with perishable food products are incurring the biggest losses due to this halt. The inability of goods trucks to enter after evening will widen the trade deficit,” Rahman remarked.

As the situation unfolds, the Benapole Land Port Authority and associated trade bodies continue to seek clarity and resolution from their Indian counterparts to mitigate the economic repercussions of this operational disruption.

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DCCI Urge Streamlined Tax Mechanisms for Enhanced Compliance, Reduced Costs

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The Dhaka Chamber of Commerce and Industry (DCCI) has called on the government to simplify tax procedures to foster better comprehension, ease compliance, and minimize time, effort, and expenses.

“Corporate tax calculations should adhere to accounting standards, and compliant businesses should occasionally receive incentives,” stated Ashraf Ahmed, DCCI President, during a workshop on “Customs, VAT, and Income Tax Management” held at the DCCI office in the capital, according to a press release issued today.

The workshop was organized by DCCI to inform professionals from its member organizations about recent amendments in relevant laws as outlined in the 2024-25 budget.

Prominent Speakers and Insights
The event featured key presentations by Md Zakir Hossain, Commissioner of Customs, Excise, and VAT Commissionerate, Dhaka East; Snehasish Barua, FCA, Adviser to the DCCI Standing Committee on Customs, VAT, and NBR-related issues; and MBM Lutful Hadi, FCA, Vice-president of ICAB.

Ashraf Ahmed emphasized that automation would diminish discretionary measures and curb leakages. He asserted that compliant businesses encounter fewer hassles, adding that a transparent and accountable revenue system would expand the tax base while reducing complications.

Ahmed further highlighted the positive aspects of the VAT Act, Income Tax Act, and Customs Act, urging their practical application.

VAT Act Amendments and Revenue Goals
Md Zakir Hossain clarified that no major changes were introduced in the new VAT Act, but two procedural adjustments were made for the NBR. He acknowledged that to meet increased revenue collection targets, pressure on all taxpayers, including VAT-paying companies, would rise slightly. He encouraged businesses to familiarize themselves with the VAT Act to benefit from existing rebate facilities.

Snehasish Barua noted that the NBR’s revenue collection target for the current fiscal year is Tk4.8 lakh crore, a 17 percent increase from the previous year. He advocated for reducing import duties to stimulate industrialization and economic growth, stressing the need for a sustainable revenue system in light of the country’s economic conditions.

MBM Lutful Hadi urged the government to properly implement the new Customs Act, designed to lower business costs. He underscored the importance of ensuring a sustainable revenue framework.

Workshop Participation and Key Takeaways
Approximately 90 representatives from DCCI member organizations attended the workshop, gaining a clear understanding of the new rules and procedures to aid their respective entities in lawful calculations.

DCCI Vice-president Md. Junaed Ibna Ali, Directors Kamrul Hasan Tuhin, and M. Mosharraf Hossain were also present during the event.

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