India set to slip below Bangladesh in terms of per capita GDP in 2020, as per International Monetary Fund (IMF)-World Economic Outlook (WEO) that was released on October 13, 2020.
As per the latest World Economic Outlook, Bangladesh is going to overtake India as its per capita GDP in dollar terms is likely to expand 4 percent in 2020 to $1,888. Indian Economy, on the other hand, is facing a steep contraction as a result of the coronavirus lockdown.
India's per capita GDP is expected to slump 10.5 percent to $1,877 in 2020, which is the lowest in the last four years. Going by this projection, India would be the third poorest nation in South Asia, with only Pakistan and Nepal reporting lower per capita GDP. All other South Asian nations including Bangladesh, Bhutan, Maldives and Sri Lanka would outpace India.
COVID-19 impact in South Asia
• India's economy is one of the hardest-hit by the COVID-19 pandemic in South Asia after Sri Lanka.
• As per the WEO growth projections, Sri Lanka's per capita GDP is likely to contract 4 percent in 2020.
• Other nations such as Nepal and Bhutan are comparatively projected to grow their economies this year.
• The IMF did not disclose Pakistan's data for 2020.
Economic Recovery in 2021?
The IMF's World Economic Outlook (WEO) for 2021 forecasts sharp economic recovery for the Indian economy. India's GDP is expected to grow by 8.8 percent in 2021, which is expected to push India ahead of Bangladesh by a small margin. The WEO growth projection for Bangladesh's per capita GDP is 5.4 percent in 2021.
How can Bangladesh overtake India in per capita GDP?
India's per capita GDP was almost 40 percent higher than Bangladesh's up until five years ago. However, in the last five years, Bangladesh's per capita GDP increased at a compound annual growth rate (CAGR) of 9.1 percent, compared to 3.2 percent growth recorded by India during the said period.
Bangladesh's economic growth was supported by a rapidly growing export sector and stable growth in the savings and investment rate of the country. India's exports, on the other hand, saw a downturn in recent years and savings and investments also showed a decline.
World Economic Outlook |
| • As per the latest World Economic Outlook, the IMF continues to project a deep recession in 2020, while global growth is projected to be -4.4 percent, an upward revision of 0.8 percent compared to the previous June update. • The upward revision of global growth projections is due to less dire outcomes in the second quarter of the fiscal year and stronger signs of recovery in the third quarter, as some countries have benefited from the re-opening and partial rebound. • Gita Gopinath, Chief Economist of the International Monetary Fund, posted a small message on the WEO projections on her twitter account, in which she said that to return back to pre-pandemic levels of activity in most countries is going to be a long, highly uneven and highly uncertain journey.
• In 2021, WEO projects global growth to rebound to 5.2 percent, -0.2 percent below June projections. Further, the latest economic outlook revealed that except for China, where output is expected to exceed 2019 levels this year, output in both advanced economies, emerging market and developing economies is projected to remain below 2019 levels even next year. |
Background
As per the latest World Economic Outlook, India’s economic contraction in 2020 will be its worst since the 1990-91 economic crisis when the per capita GDP had contracted 17.5 percent.
India’s GDP per capita in dollar terms had last contracted 1 percent in 2012 due to currency depreciation. Overall, India’s per capita GDP in dollar terms contracted on eight occasions in 40 years, five of which occurred before 2000.
-1760907338778.png)
-1760611221133.jpg)
Comments
All Comments (0)
Join the conversation