Assignment on:

Economic Analysis and Comparison on the Macroeconomic

Overview of Bangladesh and Sri Lanka.
Date of Submission: 31st December, 2020

Submitted By:

Name: Sultana Zannat Mila

ID: 1720297
Course Name: Principles of Macroeconomics.
Course ID: ECN202
Section: 02

Submitted To:

Instructor: Khwaja Saifur Rahman

Senior Lecturer, Economics
School of Business and Entrepreneurship,
Independent University, Bangladesh (IUB)
 Letter of Transmittal

31st December, 2020

Khwaja Saifur Rahman

Senior Lecturer (Economics), School of Business and Entrepreneurship

Independent University, Bangladesh (IUB)

Subject: Submission of assignment on Economic Analysis and Comparison on the Macroeconomic

Overview of Bangladesh and Sri Lanka.

Dear Sir,

With due respect, it is a pleasure and honor of mine to be your student and have this opportunity
to present the assignment. While preparing the assignment, I have given all my focus thoroughly
on the topic regarding this Economic Analysis. I have provided all the relevant information
regarding this topic and I believe and hope that my assignment will provide you a clear conception
about Economic Analysis.

While preparing the assignment, I have given my best to accumulate needed information and I will
be happy to answer any question and clarify it fully to your understanding. Thank you for all your
help and support which helped me significantly in preparing this Economic Analysis.

Yours Sincerely

Sultana Zannat Mila (ID- 1720297)

 Acknowledgement

Foremost, I would like to express my sincere gratitude to the instructor Khwaja Saifur Rahman
(Senior Lecturer, Independent University, Bangladesh) for the continuous support and for his
patience, motivation, enthusiasm, immense knowledge. By the cordial mercy of Allah, now I am
able to submit my assignment to the respectable faculty Khwaja Saifur Rahman. I strongly believe
that it would not be possible preparing such an assignment without Almighty’s grace.

Now I would like to thank my respectable faculty Khwaja Saifur Rahman for his keen efforts and
a solid guideline for the assignment throughout numerous classes which helped me to understand
all the regarding objectives which facilitate the successful completion of the assignment.

Finally I would like to say that I have prepared this assignment from mostly secondary sources of
information. Due to the widespread of Covid-19, we the citizens of Bangladesh are instructed to
stay at home and remain reserve from coming in physical contact with each other. Hence to ensure
safety I am not able to go out and collect data for the purpose of this assignment. That is why I
reached out for alternative resource which would suit the purpose of this assignment. I am ready
to accept all my unwilling errors and omission which belong to me.

Thank you.
 Table of Contents

 Introduction ………………………………………….……..…..…………… 1

 The Economic Overview of Bangladesh ……………….…….………..…… 1

 The Economic Overview of Sri Lanka …………………………..….……… 2

 Comparison of Gross Domestic Product (GDP) ……………….……..……. 3

 Comparison of Inflation Rate and Unemployment rate ……………….….. 5

 Comparison of Trade ……………………………………………….……….. 7

 Conclusion ……………………………………………………………………. 8

 Reference …………………………………….……………………………….. 9
 Introduction
Macroeconomics is a section of the economy that deals with the efficiency, structure, actions and
decision-making of the economy as a whole. For instance, the use of interest rates, taxes and
government spending to control the growth and stability of an economy. This involves economies
of a regional, national and international nature. GDP, unemployment, trade, inflation, national
income, price indices, production, consumption, saving, expenditure and international finance are
the drivers of macroeconomics. (Wikipedia, 2020)

Economic analysis includes analyzing problems and issues from an economist's viewpoint. It
applies to the study of economic structures. The word "Economic Analysis" can also be defined as
the development process. The purpose of the study is to assess how efficiently the economy of the
country and its development function within the country. For example- an economic analysis of a
business focuses primarily on how much profit it makes. (Market Business News, n.d.)

Macroeconomic research involves analysis of economic patterns, long-term macroeconomic

forecasts, analysis of alternative trends, effects of fiscal and monetary interventions and counter-
actual simulations of the economy. Macroeconomic models are an integral part of this
Macroeconomic Research. (Statistics Norway, 2020)

The Economic Overview of Bangladesh

Bangladesh’s economy is a growing free market economy. In nominal terms, it is the 35th largest
economy in the world. In 2019, Bangladesh was the seventh fastest growing economy in the world
with an annual growth rate of 7.3 per cent of real GDP. Bangladesh is the second largest financial
market in the Indian subcontinent. Bangladesh is considered one of the fastest growing economies
in the world. (Wikipedia, 2020)

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The economy of Bangladesh has been maintained a sustainable economic growth. In Fiscal Year
2015- 2016, the economy grew at a rate of 7.28 percent. In Fiscal Year 2016- 2017, the per capita
national income reached US$1,610.

Continuing the declining trend since Fiscal Year 2013- 2014, the rate of inflation has been
decreased to 5.44 percent (Fiscal Year 2016-2017) from 5.92 percent (Fiscal Year 2015-2016).

In Fiscal Year 2016-2017, the growth rate was 16.08 percent, exports registered a growth of 1.72
percent and import grew by 9.00 percent. (Finance, 2017)

The Economic Overview of Sri Lanka

The economy of Sri Lanka is also a Free Market Economy. The worth of their economy was $84
billion by nominal Gross Domestic Product (GDP) in 2019. (Wikipedia, 2020)

Sri Lanka is a lower-middle income country. It’s GDP per capita is $3,852 USD (Fiscal Year 2019)
and total population of 21.8 million. Following 30 years of civil war that ended in 2009, the
economy grew at an average 5.3 percent during the period 2010-2019. This growth reflects a peace
dividend and a determined policy force towards reconstruction and growth. The country has
experienced an average annual growth of 6.4 percent from Fiscal Year 2003 to 2012.

Although the growth rate of the country has been slowed down in the last few years. From then
Sri Lanka was re-classified as a lower-middle income nation by the World Bank. It’s previous
status was upper-middle income nation. (Wikipedia, 2020)

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 Comparison of Gross Domestic Product (GDP)

Bangladesh
This is a chart of trend of Gross Domestic Product (GDP) of Bangladesh from 1980-2019. The
chart has been estimated at market prices by the International Monetary Fund with figures in
millions of Bangladeshi Taka. However, this reflects only the formal sector of the economy.

Gross Domestic US Dollar

Year Product Exchange
(Million Taka)

1980 250,300 16.10 Taka

1985 597,318 31.00 Taka

1990 1,054,234 35.79 Taka

1995 1,594,210 40.27 Taka

2000 2,453,160 52.14 Taka

2005 3,913,334 63.92 Taka

2008 5,003,438 68.65 Taka

2015 17,295,665 78.15 Taka.

2019 26,604,164 84.55 Taka.

This chart portrays a visible upward trend in Bangladesh’s GDP from 1980-2019. (Wikipedia,
2020)

Sri Lanka
The chart below summarizes the trend of Gross Domestic Product (GDP) of Sri Lanka from 1980-
2016. The chart has been estimated at market prices by the International Monetary Fund with

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figures in millions of Sri Lankan Rupees. However, this reflects only the formal sector of the
economy.

Gross Domestic Product

Year US Dollar Exchange
(Million Rupees)

1980 66,167 16.53 Sri Lankan Rupees

1985 162,375 27.20 Sri Lankan Rupees

1990 321,784 40.06 Sri Lankan Rupees

1995 667,772 51.25 Sri Lankan Rupees

2000 1,257,637 77.00 Sri Lankan Rupees

2005 2,363,669 100.52 Sri Lankan Rupees

2016 6,718,000 145.00 Sri Lankan Rupees

This chart also portrays a visible upward trend in Sri Lanka’s GDP from (1980-2016). (Wikipedia,
2020)
From both of these GDP trend charts, it is visible that though Sri Lanka is doing well in terms of
their national GDP but still they are lagging behind Bangladesh.
In terms of value of currency, in 1980’s Sri Lanka Rupee had slightly lower value than Bangladeshi
Taka. The difference was only 0.43. But eventually this value difference kept increasing. In 2016,
the currency value difference among two countries were 60.45.
This can be considered as a reason of Sri Lanka being lagged behind Bangladesh in terms of GDP.

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 Comparison of Inflation Rate and Unemployment rate

Bangladesh
The following table shows the trend of Inflation rate and Unemployment rate of Bangladesh from
the year of 1991–2019. (Wikipedia, 2020)

Inflation rate Unemployment Rate

Year
(in Percent) (in Percent)

1991 8.3 % 2.20 %

1995 10.1 % 2.48 %

2000 2.5 % 3.27 %

2005 7.0 % 4.25 %

2010 9.4 % 3.37 %

2015 6.2 % 4.42 %

2019 5.5% 4.29 %

This chart shows that the inflation rate of Bangladesh has been the most in the following years
1995 and 2010. Since 1991 the rate of inflation has always been increasing till 2010. From the
year of 2010, the inflation rate of Bangladesh started to decline. In the year of 2019, the inflation
rate was lowest in past 20 years. So it can be said that Bangladesh’s Inflation rate had upward trend
which is slightly declining recently.
On the other hand, the unemployment rate of Bangladesh had upward trend till 2015. From 2015
to 2019 this trend has started to decline but not very significantly.

Sri Lanka
The following table shows the trend of Inflation rate of Sri Lanka from the year of 1990–2017.
(Wikipedia, 2020)

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 Year 1990 1995 2000 2005 2010 2015 2016 2017

Inflation
21.5% 7.7% 6.2% 11.0% 6.3% 2.2% 4.0% 6.5%
(in Percent)

This table shows the inflation rate of Sri Lanka fluctuates with time. From the year of 1990 to 2005
the inflation rate had downward trend. In 2005 the inflation rate dramatically increased and after
this year it again started to decline. It increased again in the year of 2017.

The following table shows the trend of Unemployment rate of Sri Lanka from the year of 1990–
2017. (Macrotrends, n.d.)

Year Unemployment Rate (%) Annual Change

2019 4.20% 0.08%

2015 4.52% 0.33%

2010 4.78% -1.07%

2005 7.67% -0.71%

2000 7.74% -1.14%

1995 12.27% -0.76%

1991 14.66% -0.44%

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 Comparison of Trade
In Macroeconomics, the term ‘Trade’ includes the ways of buying and selling goods and services
which means the Imports and Exports of a country. This also includes all the foreign remittances
which we pay and receive.

Bangladesh

Total Export Total Import Foreign Remittance Earnings

Fiscal Year
(in bn. US$)[edit] (in bn. US$) (in bn. US$)

2007–2008 $14.11 $25.21 $8.9b

2008–2009 $15.56 $22.51 $9.68b

2009–2010 $16.7 $23.83 $10.87

2010–2011 $22.93 $32b $11.65

2011–2012 $24.30 $35.92 $12.85

2012–2013 $27.09 $34.09 $14.4

2013–2014 $30.10 $34.08 $14.2

2014–2015 $31.014 $47.260 $14.23

2015-2016 $33.661 $49.436 $13.60

2016-2017 $37.966 $59.561 $12.76

2017-2018 $37.612 $67.133 $15.31

2018-2019 $41.53 $68.103 $14.98

This table shows the overall Export, Import and Foreign Remittance Earnings situation of
Bangladesh from the year of 2007 to 2019. The COVID-19 pandemic has had a significant effect
on almost all sectors of the economy. In the fiscal year 2019-20, exports decreased by 16.93
percent and imports by 17 percent. (Wikipedia, 2020)

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Sri Lanka

This graph chart shows the overall trade situation of Sri Lanka from the fiscal year of 2006 to
2017. From this chart it is visible that, Sri Lanka’s trade trend has mostly fluctuating tendency.
From the year of 2006 to 2008 the trend was upward moving. The economy has experience a slip
in the year of 2009. However, Sri Lanka managed to improve this slip immediately from the year
of 2010. This upward trend continued till the year of 2011. In the year of 2012, the economy of
Sri Lanka has been experienced a drastic collapse and they started to improve this situation from
2013 and continued going upward till 2016. In the year of 2017, the economy experienced another
slip in their trade trend. (Wikipedia, 2020)

Conclusion

While doing this Economic analysis and comparison on the macroeconomic overview of
Bangladesh and Sri Lanka, I have seen drastic fluctuation of Gross Domestic Product (GDP),
Inflation rate, Unemployment rate and Trade in both of these countries. I have also seen this
ongoing pandemic of Covid-19 effecting the overall economic condition of both countries.

As it has been only 49 years of independence of Bangladesh, the economy of the country did
not get enough time to experience very long period of economic trend. Although it has
experienced a few upward and downward economic trends but not for the longest period of
time. As the country is already a developing country, a better economic overview is expected
in upcoming days.

On the other hand, Sri Lanka is way more older than Bangladesh. Sri Lanka has celebrated their
72 years of independence this year. But still Sri Lanka is classified as a lower middle income

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nation. This country is one of the lowest tax to GDP ratios in the world. Sri Lanka has also
faced barriers to social inclusion, governance and sustainability.

Though both of this countries follows similar traditional, religious and cultural values but still
in comparison to the economy of Bangladesh and Sri Lanka, Bangladesh is clearly in a better
position. Bangladesh has shown significant growth in past couple of years. So it is high time
for the government of Sri Lanka to take proper measures in terms of improving their economic
condition.

References

 Finance, M. o. ( 2017). Bangladesh Economic Review. Retrieved from

https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/e8bc0eaa_463d_4cf9
_b3be_26ab70a32a47/Ch-01%20%28English-2017%29_Final.pdf

 Macrotrends. (n.d.). Retrieved from https://www.macrotrends.net/countries/LKA/sri-

lanka/unemployment-
rate#:~:text=Sri%20Lanka%20unemployment%20rate%20for,a%200.28%25%20decline%20
from%202015.

 Market Business News. (n.d.). Retrieved from https://marketbusinessnews.com/financial-

glossary/economic-
analysis/#:~:text=Economic%20analysis%20is%20the%20study,much%20profit%20it%20is
%20making.

 Statistics Norway. (2020). Retrieved from

https://www.ssb.no/en/forskning/makrookonomi/makrookonomiske-
analyser#:~:text=Macroeconomic%20analysis%20comprises%20economic%20trend,aspect
%20of%20these%20macroeconomic%20analyses.

 Wikipedia. (2020, December 17). Retrieved from

https://en.wikipedia.org/wiki/Economy_of_Bangladesh

 Wikipedia. (2020, December 15). Retrieved from

https://en.wikipedia.org/wiki/Economy_of_Sri_Lanka

 Wikipedia. (2020, December 17). Retrieved from

https://en.wikipedia.org/wiki/Economy_of_Bangladesh

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