India set to drop below Bangladesh in per capita GDP during this financial year; to bounce back in next year: IMF

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India is expected to witness the biggest contraction among major emerging markets amid the coronavirus pandemic, says the IMF report

Bangladesh is set to overtake India in terms of per capita Gross Domestic Product (GDP) during this fiscal, according to the International Monetary Fund report.

Indian economy is projected to contract by a massive 10.3 percent this year. The IMF's forecast for India is that it is expected to witness the biggest contraction among major emerging markets amid the coronavirus pandemic.

The IMF's ‘World Economic Outlook’ report, released on Tuesday, said that India's per capita GDP will decline to $1,877 during the financial year ending March 31, 2021. On the other hand, Bangladesh’s per capita GDP in dollar terms is expected to surge to $1,888, said the IMF report.

Despite this, India is expected to bounce back with an impressive 8.8 percent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China's projected growth rate of 8.2 percent, the IMF said.

India’s per capita GDP in dollar terms may grow 8.2 percent in 2021, against an expected 5.4 percent growth for Bangladesh. This will grow India’s per capita GDP to $2,030 next year, against Bangladesh’s $1,990.

Released ahead of the annual meetings of the IMF and the World Bank, the report said global growth would contract by 4.4 percent this year and bounce back to 5.2 percent in 2021.

Gita Gopinath, Chief Economist and Director of the Research Department, IMF, said that India’s growth would fall to -10.3 percent.

"We do have a significant downgrade for India's growth for the fiscal year 2021. It is -10.3 percent. The hit to the economy has been large and pretty much broad-based. You saw that in the April, May, June months, so this has been a very hard hit," she said.

India’s per capita GDP was nearly 40 percent, higher than that of Bangladesh till five years ago. In the last five years, Bangladesh’s per capita GDP surged at a compound annual growth rate of 9.1 percent, against 3.2 percent growth reported by India during the period.

Image credit: Financial Express

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