Individual Assignment
Understanding the Macroeconomy in Asia
COURSE ID: ECN-202
SECTION: 05
SEMESTER: Summer 2024
SUBMITTED BY:
Sanzid Khan Shad
ID:- 2030103
SUBMITTED TO:
Dr. Shahriar Kabir
Associate Professor
Department of Economics SBE
Contents
Introduction ............................................................................................................................................ 3
Nominal GDP ........................................................................................................................................... 3
Malaysia’s Nominal GDP ..................................................................................................................... 3
Sri Lanka Nominal GDP........................................................................................................................ 5
Summary ............................................................................................................................................. 6
Real GDP.................................................................................................................................................. 7
Malaysia Real GDP .............................................................................................................................. 7
Sri Lanka Real GDP .............................................................................................................................. 8
Summary: .......................................................................................................................................... 10
GDP Deflator ......................................................................................................................................... 10
Malaysia GDP Deflator ...................................................................................................................... 10
Sri Lanka GDP Deflator ...................................................................................................................... 12
Summary: .......................................................................................................................................... 13
CPI ......................................................................................................................................................... 13
Malaysia CPI ...................................................................................................................................... 13
Sri Lanka CPI ...................................................................................................................................... 15
Summary: .......................................................................................................................................... 16
Conclusion ............................................................................................................................................. 17
Introduction
The study of macroeconomic indicators such as GDP, CPI, and GDP deflator is crucial for
understanding the overall economic performance of a country. This assignment explore and
critically analyze the macroeconomic trends of two selected countries: Sri Lanka from South
Asia and Malaysia from Southeast Asia. By examining the nominal GDP, real GDP, GDP
deflator, and Consumer Price Index (CPI) from 2000 to 2023, this study will provide insights
into the economic growth, inflationary trends, and the broader economic stability of these
nations over three decades.
Through detailed graphical analysis and critical discussion, this report will identify the
significant economic events that have impacted GDP and inflation trends in both countries. The
comparison between Sri Lanka and Malaysia will help in understanding the different paths to
economic growth and stability, providing a deeper comprehension of macroeconomic
principles in a practical context.
Nominal GDP
Malaysia’s Nominal GDP
Date Nominal GDP
2000 93.8B
2001 92.8B
2002 100.8B
2003 110.2B
2004 124.7B
2005 143.5B
2006 162.7B
2007 193.5B
2008 230.8B
2009 202.3B
2010 255.B
2011 298.B
2012 314.4B
2013 323.3B
2014 338.1B
2015 301.4B
2016 301.3B
2017 319.1B
2018 358.8B
2019 365.2B
2020 337.5B
2021 373.8B
2022 407.B
2023 399.6B
Graph
Malaysia's nominal GDP grew from $93.8 billion in 2000 to a peak of $407 billion in 2022.
The country experienced robust growth in the early 2000s, driven by industrial expansion and
strong export performance. The global financial crisis of 2008 led to a decline in GDP in 2009,
but the economy rebounded quickly, continuing to grow until 2014. After a period of stagnation
and slight decline between 2015 and 2020, Malaysia's economy recovered strongly post-
pandemic, although it saw a slight decrease in 2023 to $399.6 billion.
Malaysia's economic resilience is attributed to its diversified economy, strong export sector,
and effective policy responses to global economic challenges. The recovery from the 2008
financial crisis and the COVID-19 pandemic highlights the country's ability to adapt and
maintain growth.
Sri Lanka Nominal GDP
Date Nominal GDP
2000 16.3B
2001 15.7B
2002 16.5B
2003 18.9B
2004 20.7B
2005 24.4B
2006 28.3B
2007 32.4B
2008 40.7B
2009 42.1B
2010 58.6B
2011 67.8B
2012 70.4B
2013 77.B
2014 82.5B
2015 85.1B
2016 88.B
2017 94.4B
2018 94.5B
2019 89.B
2020 84.3B
2021 88.6B
2022 74.1B
2023 84.4B
Graph
Sri Lanka's nominal GDP increased from $16.3 billion in 2000 to $84.4 billion in 2023. The
country experienced steady growth up until 2008, with significant increases in GDP due to
post-civil war reconstruction and growth in key sectors like textiles and tourism. However, the
global financial crisis of 2008 had a less severe impact on Sri Lanka compared to Malaysia.
The country saw rapid growth between 2010 and 2014, but political instability, economic
mismanagement, and a series of crises led to a decline in GDP from 2019 onwards, with a
significant drop during the economic crisis in 2022.
Sri Lanka's GDP growth has been more volatile due to political instability, reliance on fewer
economic sectors, and high levels of public debt. The economic crisis in 2022 caused a sharp
decline in GDP, highlighting the country's vulnerability to both domestic and external shocks.
Summary
Malaysia's nominal GDP growth has been more consistent and resilient compared to Sri
Lanka's. Malaysia's diversified economy and strong export sector have enabled it to recover
more quickly from global economic challenges, whereas Sri Lanka's economy has faced greater
volatility due to internal challenges, political instability, and economic crises. The comparison
illustrates the importance of economic diversification and sound governance in sustaining long-
term economic growth.
Real GDP
Malaysia Real GDP
Date Real GDP Value
2000 148.3B
2001 149.B
2002 157.1B
2003 166.2B
2004 177.4B
2005 186.9B
2006 197.3B
2007 209.8B
2008 219.9B
2009 216.6B
2010 232.7B
2011 245.B
2012 258.4B
2013 270.5B
2014 286.8B
2015 301.4B
2016 314.8B
2017 333.1B
2018 349.2B
2019 364.6B
2020 344.7B
2021 356.1B
2022 386.9B
2023 401.1B
Graph
Malaysia's real GDP grew from $148.3 billion in 2000 to $401.1 billion in 2023. The country
exhibited consistent growth throughout the period, with only a slight dip in 2009 during the
global financial crisis, where real GDP fell from $219.9 billion in 2008 to $216.6 billion in
2009. However, the economy quickly recovered, with robust growth continuing through the
2010s. The COVID-19 pandemic in 2020 led to another dip in real GDP to $344.7 billion, but
Malaysia rebounded strongly in the subsequent years, reaching $401.1 billion in 2023.
Malaysia's steady real GDP growth can be attributed to its diversified economy, strong export
sector, and effective economic policies that have supported industrial expansion, domestic
consumption, and infrastructure development. The ability to quickly recover from global
economic shocks highlights the resilience of the Malaysian economy.
Sri Lanka Real GDP
Date Real GDP Value
2000 37.8B
2001 37.2B
2002 38.7B
2003 41.B
2004 43.2B
2005 45.9B
2006 49.4B
2007 52.8B
2008 55.9B
2009 57.9B
2010 62.5B
2011 67.9B
2012 73.8B
2013 76.8B
2014 81.7B
2015 85.1B
2016 89.4B
2017 95.2B
2018 97.4B
2019 97.2B
2020 92.7B
2021 96.6B
2022 89.5B
2023 87.5B
Graph
Sri Lanka's real GDP increased from $37.8 billion in 2000 to a peak of $97.4 billion in 2018,
after which it began to decline, falling to $87.5 billion by 2023. The country experienced steady
growth in the early 2000s, driven by post-war reconstruction, increased foreign investment,
and growth in key sectors such as textiles, tourism, and agriculture. However, from 2019
onwards, real GDP started to decline due to a combination of economic mismanagement,
political instability, and the impact of the COVID-19 pandemic, which led to a significant drop
in economic activity.
Sri Lanka's real GDP growth has been more volatile than Malaysia's, influenced by internal
challenges such as high public debt, political instability, and economic mismanagement. The
decline in real GDP after 2019 reflects the country's vulnerability to both internal and external
shocks, including the economic crisis of 2022.
Summary:
Malaysia's real GDP growth has been more consistent and resilient, with the country
demonstrating a strong capacity to recover from economic shocks, such as the global financial
crisis and the COVID-19 pandemic. In contrast, Sri Lanka's real GDP growth has been more
erratic, with significant declines in recent years due to internal economic challenges and crises.
Malaysia's diversified economy and effective governance have contributed to stable and
sustained growth, while Sri Lanka's economy, heavily affected by domestic issues and less
diversified, has struggled to maintain consistent growth, particularly in the face of external
shocks. This comparison underscores the importance of economic diversification, sound
governance, and political stability in achieving long-term economic growth.
GDP Deflator
Malaysia GDP Deflator
Date GDP Deflator Value
2000 61.55
2001 60.57
2002 62.47
2003 64.53
2004 68.41
2005 74.47
2006 77.43
2007 81.21
2008 89.65
2009 84.28
2010 90.40
2011 95.30
2012 96.25
2013 96.42
2014 98.80
2015 100.00
2016 101.66
2017 105.50
2018 106.16
2019 106.24
2020 105.37
2021 111.38
2022 118.56
2023 116.35
Graph
Malaysia's GDP deflator increased from 61.55 in 2000 to 116.35 in 2023. The GDP deflator
reflects the overall price level of goods and services in the economy. It generally increased
steadily, indicating moderate inflation over the years. Notable periods include a significant rise
from 2004 to 2008, peaking at 89.65 in 2008, which corresponds to a global rise in commodity
prices before the 2008 financial crisis. After a brief decline in 2009, the deflator continued to
rise, stabilizing around 100.00 from 2015 onwards, indicating relatively stable inflation levels.
A marked increase occurred again from 2021 to 2022, reaching 118.56, likely due to post-
pandemic inflationary pressures.
The consistent increase in the GDP deflator reflects moderate inflation, driven by factors such
as rising commodity prices, strong domestic demand, and economic expansion. The
stabilization post-2015 suggests effective inflation management, though recent increases
indicate inflationary pressures, potentially from global supply chain disruptions and increased
demand post-COVID-19.
Sri Lanka GDP Deflator
Date Value
2000 24.50
2001 27.85
2002 30.11
2003 32.75
2004 35.63
2005 39.34
2006 43.78
2007 49.92
2008 58.07
2009 61.48
2010 78.04
2011 81.15
2012 89.64
2013 95.24
2014 97.07
2015 100.00
2016 105.44
2017 111.21
2018 115.99
2019 120.48
2020 124.22
2021 134.18
2022 197.87
2023 232.54
Graph
Sri Lanka's GDP deflator rose dramatically from 24.50 in 2000 to a staggering 232.54 in 2023.
The deflator saw a steady increase in the early 2000s, accelerating significantly from 2006
onwards. Notable spikes occurred from 2019 to 2020, and even more so from 2021 to 2023,
with the deflator nearly doubling from 134.18 in 2021 to 232.54 in 2023. This indicates a severe
inflationary environment, particularly in recent years.
The sharp increase in Sri Lanka’s GDP deflator reflects significant inflation, driven by factors
such as political instability, economic mismanagement, and external debt crises. The massive
spike in the deflator post-2020 correlates with the country's severe economic crisis,
characterized by a sharp devaluation of the currency, skyrocketing prices, and a collapse in
consumer and business confidence.
Summary:
Malaysia’s GDP deflator shows a controlled, moderate inflationary trend, reflective of a stable
economic environment with managed inflation. In contrast, Sri Lanka’s GDP deflator indicates
severe and escalating inflation, particularly in recent years, highlighting the country’s economic
instability and the impact of its financial crises.
The stark difference in the GDP deflator trends between the two countries underscores the
relative economic stability of Malaysia compared to the volatile and crisis-prone economy of
Sri Lanka. Malaysia’s ability to maintain a relatively stable inflation environment contrasts
sharply with Sri Lanka’s struggle with hyperinflation and economic turmoil, particularly
evident from 2020 onwards.
CPI
Malaysia CPI
Date Value
2000 56.81
2001 80.52
2002 81.66
2003 83.14
2004 84.04
2005 85.24
2006 87.77
2007 90.94
2008 92.78
2009 97.83
2010 98.40
2011 100.00
2012 103.17
2013 104.89
2014 107.10
2015 110.46
2016 112.79
2017 115.15
2018 119.61
2019 120.66
2020 121.46
2021 120.08
2022 123.05
2023 127.21
Graph
Malaysia's Consumer Price Index (CPI) increased from 56.81 in 2000 to 127.21 in 2023. The
CPI measures the average change over time in the prices paid by consumers for a basket of
goods and services. Malaysia's CPI showed a steady, moderate increase throughout the period,
with significant stability around the 100 mark in 2011, which was set as the base year. This
indicates a relatively low inflation environment, with gradual price increases over time.
Notable increments occurred between 2009 and 2010, coinciding with the global financial
crisis, and a more significant rise from 2021 to 2023, reflecting post-pandemic inflationary
pressures.
Sri Lanka CPI
Date Value
2000 36.48
2001 41.65
2002 45.62
2003 48.50
2004 52.18
2005 58.25
2006 64.09
2007 74.24
2008 90.99
2009 94.15
2010 100.00
2011 106.72
2012 114.77
2013 122.69
2014 126.60
2015 131.37
2016 136.57
2017 147.09
2018 150.23
2019 155.53
2020 165.10
2021 176.68
2022 264.53
2023 308.29
Graph
Sri Lanka's CPI surged from 36.48 in 2000 to 308.29 in 2023. The CPI shows much sharper
increases compared to Malaysia, particularly after 2019. The CPI index reflects a rapid rise in
the cost of living, with significant jumps in 2008 and again post-2020, where the CPI more
than doubled between 2021 and 2023. This indicates a period of hyperinflation, especially in
2022 and 2023, driven by the country's economic crisis.
Sri Lanka’s sharp CPI increases highlight severe inflationary pressures, particularly in the face
of economic instability, political turmoil, and poor fiscal management. The extreme rise in CPI
post-2020 is indicative of hyperinflation, driven by factors such as currency devaluation,
skyrocketing food prices, and shortages of essential goods during the country’s economic crisis.
Summary:
Inflation Comparison: Malaysia’s CPI shows a moderate and controlled increase over the years,
reflecting stable economic conditions and effective management of inflation. In contrast, Sri
Lanka’s CPI exhibits a dramatic rise, particularly in recent years, indicating severe inflation
and economic instability, culminating in hyperinflation by 2023.
The comparison underscores the relative economic stability in Malaysia, where inflation has
been managed effectively, versus Sri Lanka’s economic challenges, where mismanagement and
crises have led to sharp increases in the cost of living, significantly impacting the population’s
purchasing power and economic stability
Conclusion
Malaysia's economic performance has been characterized by consistent growth and resilience.
The country’s nominal and real GDP both show a steady upward trajectory, with notable
recoveries from global economic disruptions such as the 2008 financial crisis and the COVID-
19 pandemic. Malaysia’s diversified economy and effective policy responses have contributed
to its stability and relatively smooth economic expansion. The controlled inflation, as reflected
by the moderate increase in the GDP deflator and CPI, further underscores the country’s ability
to manage economic growth without significant inflationary pressures.
In contrast, Sri Lanka’s economic journey has been marked by greater volatility and instability.
Although Sri Lanka experienced notable growth in nominal and real GDP up until 2018, this
was followed by a pronounced decline due to a combination of political instability, economic
mismanagement, and external shocks. The severe increases in the GDP deflator and CPI,
particularly from 2021 onwards, reflect a period of hyperinflation driven by the country’s
deepening economic crisis and currency devaluation. The dramatic rise in inflationary
indicators highlights the severe impact of economic instability on the cost of living and overall
economic health.
The comparison between Malaysia and Sri Lanka illustrates the critical importance of
economic diversification, effective governance, and political stability in achieving and
sustaining economic growth. Malaysia’s ability to manage inflation and maintain steady growth
underscores the benefits of a robust and diversified economic structure. In contrast, Sri Lanka’s
struggles with high inflation and declining GDP reveal the vulnerabilities associated with
economic mismanagement and political instability.
Overall, Malaysia’s experience demonstrates how a well-managed economy with effective
policies can achieve stable and resilient growth, even in the face of global economic challenges.
On the other hand, Sri Lanka’s recent economic difficulties serve as a stark reminder of the
detrimental effects of economic instability and poor governance. This comparative analysis
provides valuable insights into how macroeconomic principles play out in practice and the
importance of sound economic policies and political stability for long-term economic
prosperity.
References
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