Urgency on Quarterly Data Series on GDP

The fundamental input of any research work in the socio-economic milieu is a multivariate data set generated either through a field survey known as the primary data or data collating by an official agency entrusted with the responsibility of disseminating through published documents known as secondary data. Bangladesh Bureau of Statistics [BBS] is the official statistical unit of the Government of Bangladesh in disseminating socio-economic data both from a macro and micro perspective. Various macro variables give a broad picture of the performance of the economy. Again specialized micro studies contribute to understanding the problems and prospects on a specific issue. Among the core macroeconomic data; Gross Domestic Product or GDP, Consumer Price Index [CPI, investment, inflation, Nominal Effective Exchange Rate [ NEER], and Real Effective Exchange Rate [ REER] are often used by academic and research institutions, bilateral development and multilateral institutions.

BBS since its inception has been publishing various documents to provide data on various issues both on micro and macro aspects. Both the Statistical Year Book and the small version known as the Pocketbook are now considered important documents in both official and research work. Another yearly publication; National Accounts Statistics caters needs of many key indicators of national accounts such as GDP at current and constant prices, sectoral share, sectoral growth, consumption, and savings as a percentage of GDP. These documents have attained considerable perfection in contents and reliance. BBS publishes many data series quarterly and even on a monthly basis. CPI is recorded on a monthly basis and data on monetary aggregates such as M1 and M2, inflation, and weighted interest rate are given on a monthly basis. Some data such as the exchange rate are available even on a daily basis.

GDP that records all the legal economic transactions of a country for all final goods and services produced for a specific period is the most important variable in the macroeconomic domain of any country. GDP captures many dimensions. It is not just an ingot. It tells you the structure of the economy such as the relative contribution of agriculture, manufacturing, or the services sector. The sectoral contribution helps us to categorize the countries into the agricultural or industrialization level. The GDP data along with growth rate are recorded on a quarterly basis in the western world but in many developing countries the data is recorded on an annual basis. Bangladesh is not an exception where both the GDP data and the growth rate are recorded on a yearly basis. For many countries a careful reader may read this growth rate in newspapers with comments on the overall sectoral growth scenario, the perceived deviation from the projection, and often with a nice explanation for this deviation. Consider a simple example of Singapore or Indonesia to see how the different quarterly growth is reported along with other important macro dimensions. There is always a growth projection of quarterly GDP growth by the appropriate authority in many countries but we project growth on a yearly basis. This aggregate growth data is reported with the different sectoral growth such as manufacturing, construction sector, information, and communication sector and wholesale and retail sector. The growth data is often reported with seasonally adjusted data that take account of the seasonal variation in performance.

The quarterly data series is essential in carrying out research work on the economy of Bangladesh e,g,. research dealing on the effectiveness of macro variables on policy issues such as the effectiveness of appreciation and depreciation of exchange rate on the trade balance. Fifteen years of annual data may not yield satisfactory results that could help in policy formulation but quarterly data of fifteen years with 60 observations may provide a satisfactory clue on sound policy guidelines. Sophisticated econometric techniques require data sets for several years and annual data sets even for 10-12 years cannot feed the requirement of many econometric software packages. So it is essential to compile GDP data sets on a quarterly basis to help researchers to carry out regular exploratory research work on Bangladesh. There are ways to generate or interpolate quarterly data with sound theoretical edifice, but it is always preferable to use data published by the appropriate authority. The trend in time series data is more accurate with quarterly data series that may help the policymakers to understand the delicacy in the behavior for this pattern of change as structural break in the data set may yield dubious value on the estimated parameter. Patterns of production, consumption, change in price level or emergence of new sectors in GDP contribution warrants periodic review and incorporation in the database to reflect the structural transformation of the economy.

The base year in GDP estimation needs to be updated in ensuring the accuracy of national accounts estimates and their comparability across countries. GDP series recorded in nominal or constant prices changes with the change of base year. The base year which was initially set at 1995-96 was revised to 2005-06. Thanks to BBS for the change of the base year from 2006-06 to the current base year of 2015-16. The new base year would indeed give a more pragmatic data series on national accounts with incremental coverage in agricultural, industrial and service sectors.

Nominal data on many macro variables need to be converted into real variables using CPI. Quarterly series of CPI also need to be revised on a regular periodic basis. The attempt by BBS to publish quarterly data on GDP by signing Memorandums of Understanding with stakeholders would help researchers meet a critical long-felt need. “ The quarterly data, we believe will play a vital role in understanding, knowing, adopting” and in considering policy issues on the economy of Bangladesh.

The writer is the Treasurer and Professor at the School of Business and Economics, United International University. He may be contacted at obaidur@ eco.uiu.ac.bd.