Comparison between Indian and Bangladeshi Economy through

major macroeconomic indicators

With major improvements in a number of economic metrics over the past few
decades, Bangladesh and India are two of South Asia's economies that are
expanding the fastest. In recent years, Bangladesh's economy has grown at an
average annual pace of 6% whereas India's has grown at an average annual rate of
7%. In this article, we'll talk about Bangladesh's main economic metrics and contrast
them with those of India.

In recent years, the topic of discussion has centered on Bangladesh's present

economic performance in comparison to India. Bangladesh's actual GDP growth rate
in 2020 was 5.2%, compared to India's -7.7%. Though Bangladesh's economy is
considerably smaller than India's, Bangladesh's GDP in 2020 was $352.4 billion
compared to India's $2.7 trillion GDP. The main economic indicators of Bangladesh
and their standing in relation to India will be examined in this paper.

Bangladesh's economy has been expanding gradually, with an average growth rate
of 6.4% between 2010 and 2019, according to a report by the Asian Development
Bank (ADB). The industrial and services industries, which grew at average rates of
10.2% and 6.8%, respectively, over this time, have been the main drivers of this
expansion. According to the ADB, Bangladesh's poverty rate dropped from 44.2% in
1991 to 24.3% in 2016.
Similar to this, according to the World Bank, Bangladesh's inflation rate has
remained largely consistent over time, averaging 5.9% between 2010 and 2019.
Bangladesh's unemployment rate in 2019 was 4.4%, which is lower than the 5.5%
South Asian average.

India, however, has seen some economic difficulties. The COVID-19 pandemic's
effects, together with other factors, caused India's real GDP to decline by 7.7% in
2020, according to the International Monetary Fund (IMF). A 45-year high of 6.1%
was reached by India's unemployment rate in 2018, before falling to 5.8% in 2019.

We examined the following key macroeconomic metrics from 1990 to 2020: per
capita real GDP, unemployment rate, and CPI inflation rate in order to better
comprehend Bangladesh's economic performance in comparison to its South Asian
neighbors. Bangladesh's performance was contrasted with that of India, Pakistan,
Nepal, and Bhutan.

The first graph below displays the real GDP per capita for each of these nations. As
we can see, Bangladesh has the lowest per capita GDP among these nations, while
Bhutan and India have the greatest. But in recent years, Bangladesh has been
steadily catching up to the other nations.
The CPI inflation rate for these nations is displayed in the second chart down. As we
can see, Bangladesh had the most stable inflation rate over the years, whereas
Pakistan had the highest inflation rate in the group.

Unemployment Rate: From 1991 to 2021, the unemployment rates for Bangladesh,
India, Pakistan, Nepal, and Bhutan are shown in the graph. We can see that the
unemployment rate in Bangladesh has drastically declined over time and is now
lower than that of India and Nepal. Bhutan's unemployment rate, on the other hand,
has consistently been lower than Bangladesh's.
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analyzing the database of World Bank , we can also come up with detailed
comparison of the Indian and Bangladeshi economies based on major
macroeconomic indicators.

1990–2000: In the 1990s, both Bangladesh and India experienced economic

difficulties. Bangladesh was recuperating from a period of political unrest while India
was dealing with a balance of payments issue. India's real GDP per capita expanded
over this time from $1,026.88 in 1990 to $1,465.67 in 2000, a growth of 43%. In
comparison, Bangladesh's real GDP per capita climbed by 52%, from $262.29 in
1990 to $398.42 in 2000. However, both nations saw significant rates of inflation,
with Bangladesh's rate hitting 8.57% in 1992 and India's peaking at 14.91% in 1991.

2000–2010: Both Bangladesh and India experienced economic development in the

2000s. India's real GDP per capita increased by 33% from $1,465.67 in 2000 to
$1,942.15 in 2010, a rise of 33%. India's unemployment rate decreased over this
time, dropping from 8.3% in 2000 to 6.6% in 2010. Bangladesh's real GDP per
capita, on the other hand, increased by 64% from $398.42 in 2000 to $651.88 in
2010. The unemployment rate in Bangladesh, which ranged from 4.1% to 5.2% over
this time, was quite stable.

2010–2020: During the 2010s, economic growth was seen in both India and
Bangladesh, though Bangladesh's growth was faster than India's. The real GDP per
person in India increased from $1,942.15 in 2010 to $1,877.77 in 2020, a decrease
of 3%. India also suffered significant rates of inflation during this time, with the
highest being 11.16% in 2013. In contrast, Bangladesh's real GDP per capita
climbed by 189%, from $651.88 in 2010 to $1,885.61 in 2020. Bangladesh's
unemployment rate decreased throughout this time, going from 5.2% in 2010 to
4.1% in 2020.
from Economic survey of India 2020-21, we can get to know Over the years, India
and Bangladesh have developed a significant trading relationship. India was
Bangladesh's top trading partner in 2019–20, accounting for $10.4 billion in bilateral
commerce between the two nations. Petroleum, chemicals, equipment, and textiles
are among India's top exports to Bangladesh, while textiles, leather, and agricultural
goods are among Bangladesh's top exports to India.

through the above analysis it is clear that Bangladesh has developed its economy
significantly during the previous three decades. Bangladesh's growth rate, however,
has been noticeably slower than India's, and it continues to behind India in a number
of economic metrics. Both nations' economies have been impacted by the COVID-19
pandemic, but India has taken a bigger hit because of its size and greater exposure
to international markets. However, Bangladesh's performance throughout the
pandemic has been commended for being somewhat better.

References:

World Bank data on India: https://data.worldbank.org/country/india

World Bank data on Bangladesh: https://data.worldbank.org/country/bangladesh

Economic Survey of India 2020-21:

https://www.indiabudget.gov.in/economicsurvey/doc/Full%20Document%20English
%202020-21.pdf

Bangladesh Economic Update 2021:

https://openknowledge.worldbank.org/handle/10986/35887