According to the International Monetary Fund‘s latest World Economic Outlook report, India is about to be overtaken by Bangladesh in per capita gross domestic product in 2020 as a result of lockdown impact.
In terms of the American dollar, at the current price, the IMF has estimated that India’s per capita GDP will fall to 1,877 dollars in 2020 which means a decline of 10.3 per cent. In contrast, Bangladesh’s per capita GDP is likely to grow to 1,888 dollars, a rise of 4 per cent.
Even a few years ago, India was way ahead of Bangladesh in terms of per capita GDP, but the gap has been gradually decreasing owing to the country’s rapidly-rising exports.
Moreover, during the halfway period, India’s savings and investments remained average, but the numbers for Bangladesh saw a sizeable surge.
If the IMF’s forecast comes true, India will be just ahead of Pakistan and Nepal in the regional GDP sweepstakes. What this means is that other South Asian countries like Bhutan, Sri Lanka, Maldives and Bangladesh will be ahead of India.
The IMF report has also stated that compared to the downfall projected for India, the economies of Nepal and Bhutan are expected to grow in 2020.
Earlier, RBI had projected a 9.5% contraction of Indian economy for the full fiscal, but IMF’s latest forecast for India is worse than that.
Similarly, IMF’s forecast is also gloomier than the World Bank forecast which predicted a decline of 9.6% for FY21. The World Bank had said that the situation in India is “worse than ever”.
The IMF report has further mentioned that India’s contraction of 10.3% is going to be third sharpest fall in the world followed by contraction of Spain and Italy. India’s contraction will also be the starkest decline among developing nations and emerging economies, the report added.
The data accompanying the report shows that in 2020, the Indian economy will seethe the highest shrink since the 1990-91 crisis. Moreover, India is likely to be the worst hit in South Asia after Sri Lanka.
However, the IMF report has also foreseen a sharp recovery for India in 2021. In 2021, India will be ahead of Bangladesh once again in per capita GDP.