Assignment on “Economic Analysis and Comparison on the

Macroeconomic Overview of Bangladesh and Sri Lanka”

Submitted To,
Ms. Mumtahina Islam
Lecturer
School of Business

Purno pritom sinha (1820213) /21 ECN202

 Introduction

In real terms Bangladesh's economy has grown 5.8% per year since 1996 despite
political instability, poor infrastructure, corruption, insufficient power supplies, and
slow implementation of economic reforms. Bangladesh remains a poor, overpopulated,
and inefficiently-governed nation. Although more than half of GDP is generated
through the service sector, 45% of Bangladeshis are employed in the agriculture sector
with rice as the single-most-important product.
Sri Lanka continues to experience strong economic growth following the end of the 26-
year conflict with the Liberation Tigers of Tamil Eelam (LTTE). The government has
been pursuing large-scale reconstruction and development projects in its efforts to spur
growth in war-torn and disadvantaged areas, develop small and medium enterprises
and increase agricultural productivity.
GDP:
The following graph chart has data of Gross Domestic Product (GDP) of Bangladesh and Sri
Lanka from 2010 to 2019. As we know it measure of national income and output for a given
country's economy.

In terms of GDP Industrial sector, Agriculture sector have played a vital role in Bangladesh
as well as in Sri Lanka. Bangladesh averaged GDP growth has been largely driven by its
exports of ready-made garments, remittances and agriculture sectors. On the other hand, Sri
Lanka averaged GDP growth has been largely driven by its service sectors (Such as tourism,
banking, finance, and retail trade), industrial sectors and agriculture sectors.

450

400

350

300

250 SRI
200 BD
GDP
150

100

50

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure (I) - The above chart shows that the figures of GDP comparison between
Bangladesh and Sri Lanka. Sri Lanka is ahead of Bangladesh.

From 2010 to 2019, Bangladesh GDP has been developed gradually. It changes gradually the
percentage increasing between 30-90 precent in every year. Majority of GDP comes from
Service sector and percentage is 55.53% in 2019. We can see that in 2019 GDP was the
highest off all years. On other hand in srilanka that was in 2018 and that was quite low than
Bangladesh. From 2015 – 2019 in srilanka the gdp was quite similar but in Bangladesh that
was different and quite high in Bangladesh.

Inflation rate :
The most well-known indicator of inflation is the Consumer Price Index (CPI), which
measures the percentage change in the price of a basket of goods and services consumed by
households.

12

10

6 SRI
Inflation rate
4

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure (II) - The above chart shows that the figures of Inflation rate comparison between
Bangladesh and Sri Lanka from 2010-2019.
Comparatively Sri Lanka inflation rate is higher than Bangladesh. As we know inflation rate
classified into three types: Demand-Pull inflation, Cost-Push inflation, and Built-In inflation.

Sri Lanka inflation rate for 2019 is 3.53%, a 1.39% increase from 2018. Bangladesh inflation
rate for 2019 is 5.59%, a 0.05% increase from 2018. Both of the countries scenario of
inflation rate is upside down. Sri Lanka increaisng rate is quite better than Bangldesh.

In couple of years, Bangladesh has faced an enormouse inflationary preesure. The inlfation
rate has been largely dominated by the food inflation. Food inlfation rate is 5.47% in 2019.
CPI inflation as measured by point-to-point basis steadily increased to 260 points in 2019.
Bangladesh’s 2010 inflation rate was gradually decreasing but at the end of 2010 the rate kept
rising at a tremendous level and rose to around 16% from 6% this might have happened due
to food and the upward adjustments of administered petroleum 7 electricity prices, growth in
money supply, increased cost of production including wage rate & exchange rate depreciation
as major causes of inflation in Bangladesh. Whereas at that time, Sri Lanka already had an
inflation rate of 6.25% which was also coming down but rose again. At the end of 2011both
of the countries inflation rate started rising slightly in both countries reaching around 3.27%
in Bangladesh & 0.47% in Sri Lanka. Both of these ups and downs are due to inflation from
demand-pull, cost-push, supply-side, repressed or hyper. One more noticeable thing is that
these causes are often not exclusively responsible for such circumstances as heavy public
expenditure, tax cuts, abrupt foreign market price changes, and several more factors that are
responsible for these inflation rate shifts.

Unemployment level:
As we know, unemployment is measure by the sum of uncemployed and employed persons.
By dividing the number of individual whom are unemployed by labor force.
 100%
90%
80%
70%
60%
SRI
50%
BD
40%
30%
20%
10%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure (III) - The above chart shows that the figures of Unemployment level comparison
between Bangladesh and Sri Lanka from 2010-2019.
Bangladesh unemployment rate for 2019 is 4.19%, a 0.09% decline from 2018. Bangladesh
unemployment level has been decreased every year which is good for economy. Many of
workers go abroad and get a job. Every year, around 500.000 Bangladeshis leave the country
to work abroad. Bangladesh's economy depends on the emigrants' remittances. As we know
Bangladesh is a developing country. Small medium enterprise (SME) and garments is
growing rapidly. Most of the people get involved with works. Unemployment rate is going
down every year. Sri Lanka unemployment rate for 2019 is 5.1% which has been increased
than the last year. On 2018, unemployment rate is 4.1%. Increased by 1%. Bangladesh is
ahead of Sri lanka based on the scenario in 2019. On 2010 Both of the countries have similar
percentage of unemployment rate. During the year Bangladesh and Sri Lanka, unemployment
rate was above 5%. The lower unemployment rate is good for stable economy for a specific
country. High unemployment in Sri Lanka has been attributed to unrealistic expectations, to
queuing for public sector jobs, and to stringent job security regulations. On the scenario of
Bangladesh is different than Sri Lanka. Most the people start their own start up business. Sri
Lanka unemployment rate main reason is 92% of the population are educated which is good
for in some way. Most of the people hunger for government job and they stayed unemployed.
Net exports:
Trade is a basic economic concept involving the buying and selling of goods and services,
with compensation paid by a buyer to a seller. Net exports can take place within an economy
between producers and consumers.

35

30

25

20

15 BD
SRI
10

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
-5

Figure (IV) - The above chart shows that the figures of net exports comparison between
Bangladesh and Sri Lanka from 2010-2019. Here we can see that in 2010 net worth was 0.94
that was quite low and on the other hand srilanka had 19.55 that was huge difference .but in
mean time Bangladesh develops a lot and 1 year later the rate was 29.33 huge difference from
the past year. After that in Bangladesh the rate fall down in 2013 that was 2.45 but srilanka
constantly cover their rate. And in 2015 and 2017 the rate was goind down to minus for
Bangladesh . on the other hand srilanka had a great average from 2010 -2019.

Exchange rate :
An exchange rate is the value of one nation's currency  versus the currency of another nation
or economic zone. Exchange rates can be either fixed or floating.

180
160
140
120
100
80
BD
60
SRI
40
20
0 SRI
BD
10 11
20 20 12 13
20 20 14 15
20 20 16 17
20 20 18 19
20 20

Figure (V) - The above chart shows that the figures of exchange rate comparison between
Bangladesh and Sri Lanka from 2010-2019.we can see that in 2010 -2019 the exchange rate
is floating. In Bangladesh 2019 was the highest and 2010 was the lowest.the rate was 69.64
and 84.43. Again we can see that in srilanka 2018 was the best and that was 162.46 and
lowest was in 2011 and rate was 110.56. the ecchange rate was quite huge between this two
countries. Bangladesh was the quite same from 2014-2016.But after 2016 both country rate
was increasing.

Money supply :

The money supply roughly includes both cash and deposits that can be used almost as easily
as cash. Economists analyze the money supply and develop policies revolving around it
through interest rates and increasing or decreasing the amount of money flowing in the
economy. The money supply is also known as the money stock.
60

50

40

30 BD
sri
20

10

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure (V!) - The above chart shows that the figures of Money supply
comparison between Bangladesh and Sri Lanka from 2010-2019.

In this graph we can see the Srilanka’s money supply was always quite higher than
Bangladesh’s. but in 2010 and 2016 Bangladesh was the higher than srilanka and the rate
was accordingly 21.07 and 16.69 . but on the other hand Srilanka was the quite similar in
their money supply rate. Like Srilanka was the highest in 2011 and that was huge and it was
49.98. Bangladesh are going close to the poverty line, since the money supply to the citizens
started to become less after each every year.
References

https://tradingeconomics.com/bangladesh/gdp. (n.d.).
http://textilefocus.com/rmg-industry-outlook-2019/
https://www.nationmaster.com/country-info/compare/Bangladesh/Sri-Lanka/Economy
https://www.globaltrademag.com/global-jute-market-2019-bangladesh-continues-to-
dominate-exports-despite-decline-in-the-past-few-years/#:~:text=Bangladesh%20dominates
%20jute%20exports%20structure,4.8%25%20share%20of%20total%20exports.
https://www.macrotrends.net/countries/LKA/sri-lanka/inflation-rate-cpi#:~:text=Sri
%20Lanka%20inflation%20rate%20for,a%203.75%25%20increase%20from%202016
https://www.bpb.de/gesellschaft/migration/laenderprofile/216104/international-migration-
from-bangladesh
https://www.macrotrends.net/countries/BGD/bangladesh/unemployment-rate

https://www.worldbank.org/en/home