New Delhi:
The International Monetary Fund on Tuesday estimated that India will fall below Bangladesh in terms of per capita Gross Domestic Product (GDP) as the economy, is projected to contract by a massive 10.3 per cent this year.
India’s Gross Domestic Product will shrink 10.3% in the fiscal year to $1,877, ending March 31, 2021, while Bangladesh’s economy is expected to grow 3.8% to $1,888.
According to the IMF's World Economic Outlook report, released on Tuesday, India's per capita GDP is set to plunge to $1,877 this fiscal year ending on March 31, 2021. The IMF's previous prediction in June said output would shrink 4.5 percent.
Bangladesh per capita GDP in dollar terms is expected to grow to $1,888, according to the IMF report.
Going by the latest IMF estimate, India would be the third poorest nation in South Asia, with only Pakistan and Nepal reporting lower per capita GDP, whereas Bhutan, Bangladesh, Maldives, and Sri Lanka would outpace India.
The Indian economy will be the hardest-hit from the coronavirus pandemic in South Asia after Sri Lanka, whose per capita GDP is likely to contract 4 per cent in 2020, as per the WEO database.
However, India, Asia's third-largest economy, is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China's projected growth rate of 8.2 per cent, the IMF said.
The international organisation has forecast a sharp economic recovery in India next year, which is expected to push the country's per capita GDP ahead of Bangladesh in 2021 by a small margin.
India's per capita GDP in dollar terms is likely to rise 8.2 per cent in 2021, as against an expected 5.4 per cent growth for Bangladesh.This will increase India's per capita GDP to $2,030 next year, compared to Bangladesh's $1,990.
Five years ago, India’s per capita GDP was nearly 40% higher than Bangladesh’s, according to the newspaper. Dhaka’s GDP grew at a compound annual growth rate of 9.1%, in comparison to India’s 3.2% growth during the last few years. This has allowed the country to close the economic gap with India.
With these projections, India will be the third-poorest country in South Asia. Pakistan and Nepal are will be only countries with lower GDP. Bangladesh, Bhutan, Sri Lanka and Maldives would be ahead of India. The IMF predicted that Sri Lanka will be the second-most-affected after India. Sri Lanka’s per capita GDP is expected to shrink 4.6% in the current calendar year.
“All emerging market and developing economy regions are expected to contract this year, including notably emerging Asia, where large economies, such as India and Indonesia, continue to try to bring the pandemic under control,” the IMF report said.Gita Gopinath, the IMF’s chief economist, said the organisation has “significantly downgraded” India’s growth for the fiscal year 2021. “The hit to the economy has been large and pretty much broad-based,” she added. “You saw that in the April, May, June months, so this has been a very hard hit.”
Over the last five years, Bangladesh's per capita GDP has increased at a compound annual growth rate (CAGR) of 9.1 per cent, compared to 3.2 per cent growth recorded by India during the said period.
.Nepal and Bhutan comparatively are pegged to grow their economies this year, though IMF has not disclosed Pakistan's data for 2020 and beyond.
India's projected slump is the largest of any major economy except for Italy and Spain, and the biggest among the main emerging markets.Among the other countries in the BRICS group, Brazil's economy will contract 5.8 per cent, Russia 4.1 per cent, South Africa 8.0 per cent while China will grow 1.9 per cent, according to the IMF's report.