IMF predicts India to be the third poorest country in SE Asia, sliding below Bangladesh

IMF predicts India to be the third poorest country in SE Asia, sliding below Bangladesh
Photo Credit: Reuters

September 14: The International Monetary Fund (IMF) has estimated that India’s per capita Gross Domestic Product (GDP) will shrink 10.3% (in dollar terms, at current prices) falling to $1,877 in 2020, ending March 31, 2021, while the figure in Bangladesh is expected to grow 3.8%, correspondingly growing to $1,888 (in dollar terms, at current prices). According to these projections, India will face the biggest contraction of major emerging markets while the coronavirus pandemic runs rampant, the news came just on the heels Q1's unprecedented GDP and strikes a chord of melancholy.

“Revisions to the forecast are particularly large for India, where GDP contracted much more severely than expected in the second quarter”, The Washington-based lender said in its World Economic Outlook report.

If the IMF’s project hit its mark India will be the third poorest country in South Asia just above Pakistan and Nepal. Bhutan, Sri Lanka, and Bangladesh 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.

However, the report does foresee a sharp recovery for the Indian economy in 2021, after which India will slide back on top of Bangladesh again. The report projected that in (calendar year) 2021, per capita GDP in dollar terms for India is likely to grow 8.2 per cent. Whereas, for Bangladesh, it was projected at 5.4 per cent in growth taking India to $2,030 in per capita GDP in 2021 comparing to $1,990 for Bangladesh.

 

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