• By: Afaq Amjid
    Institute of Management Sciences, Peshawar
  • Introduction:

Bangladesh separated from Pakistan in 1971 due to an internal crisis-has a very decent economy along with growing economic policies. It is an agrarian country that is related to agriculture sectors where 43% either directly or inversely depend upon an agri-based economy (www.wikipedia.com). Statistically, Bangladesh has a 73.69 million labour force of which 48.25 million are male and 25.44 million are female(Labour Force Survey of Bangladesh 2023). However, Pakistan –the fifth-most populous country- has the 46th largest term of nominal Gross Domestic Product(GDP). In addition, the labor force in Pakistan was 71.76 million in 2020-21 of which 37.54% worked in the agriculture sector, 37.28% provided services, and the remaining labor worked in industries.


Bangladesh has a 174.70 million ( 17 crore ) population with the rank of 8th in the world. Nevertheless, the Economy of Bangladesh is the fastest growing economy with a growth rate of 5.6% in South-Asia region out of 32 countries( www.worldeconomics.com). Statistically, the Gross Domestic Product(GDP) of Bangladesh in 2014 was $253 Billion(B), in 2021 was $416.3B, in 2022 was $460B and $1.131 trillion at the end of 2023(World Economic Forum). On the contrary, Pakistan’s GDP was $348B in 2021, $353B in 2022, and $340B in 2023 with a 0.3% growth rate. The economy grows when the country produces much. As a result, a growing economy promotes economic activities, generates employment opportunities, utilizes scares resources, and brings industrial outcomes to the economy.

  • General Price level and interest rate:

The general price level- so-called inflation- of Bangladesh was 6.94% in 2022, 9% in 2023, and keep little above 9% in 2024, according to the Bangladesh Bureau Of Statistics. The inflation rate, However, in Pakistan was 13.4% in 2022, 28% in 2023 and it is still 25% in the current year. Low inflation creates higher purchasing power for consumers in the region and promotes much production as well. Higher interest rate -one of the methods in monetary policy used to stop the higher circulation of money in the economy to decrease inflation. As a result, the Pakistan Central Bank has set an interest rate of 22% which has been consistent for two years. Whereas, Bangladesh has set a 6.5% interest rate in the current financial year 2024. Whenever the interest rate is low, many producers get loans from banks in order to invest in multiple economic activities. Unfortunately, the Bank Rate (BR) of Pakistan discourages investors from investing which ultimately decreases the economic activities in Pakistan.

  • Sources of Productions:

Bangladesh has improved its sources of production at a higher level to maintain the sustainable development plan of the country. The textile industry of Bangladesh -2nd most growing in the world in 2009- has produced 80% of its total exports, and it has generated $19.04B in 2024 so far. In addition, it brings specialization in agricultural products such as wheat, pulses, potatoes, sugarcane, and tobacco. However, Pakistan usually exports its specialized products such as wheat and sugarcane due to either ineffective fiscal policies or political instability.

  • Foreign exchange reserves:

Despite getting earlier independence from Pakistan, the foreign exchange reserve of Bangladesh is $17.20B which is very imperative for import bills. However, Pakistan has less than $13B in the foreign exchange reserve. The trade deficit in Pakistan is very huge because it exports $31 billion and imports $84 billion. Now Pakistan will negotiate with the International Monetary Fund(IMF) for a bailout package of $1.1 billion in trenche. Pakistan’s total debt and liabilities reached RS 81.194 trillion by the end of December 2023 showing an increase of 27% from RS 63.83 trillion in the same period of fiscal year. The gap between exports and imports is filled either by more production or by getting loans from domestic and international organizations to stabilize the economy.

  • How it be solved:

Pakistan’s economy can only improve by effective fiscal and monetary policies. The Public Sector Development Program (PSDP)-RS 727 billion out of RS 9.5 trillion in Budget 2022-23- should be increased in the upcoming budget which promotes the development of the economy. Ultimately, the production will be increased which will enhance employment and reduce the poverty level. In addition, political stability must be established which attracts foreign direct investment in the country. Bangladesh has been running its economic policies with very effective tactics because of independent economic planning and decision which is free from political instability. Pakistan and Bangladesh are not different rather they have different approaches.

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