India is set to drop below Bangladesh in terms of per capita Gross Domestic Product (GDP), according to the International Monetary Fund. The organisation has projected that the Indian economy will contract by a massive 10.3 per cent this year.
"India will see the biggest contraction among major emerging markets amid the coronavirus pandemic," IMF said.
According to the IMF's ''World Economic Outlook'' report released on October 13, India's per capita GDP is set to contract $1,877 this fiscal year ending on March 31, 2021. The IMF's previous prediction in June predicted that the output would shrink 4.5 per cent.
"Bangladesh per capita GDP in dollar terms is expected to grow to $1,888," the IMF report stated.
The report also mentioned that the Indian economy is likely to bounce back with an 8.8 per cent growth rate in 2021, thus achieving the position of the fastest-growing emerging economy, surpassing China's projected growth rate of 8.2 per cent.
The report also said that global growth would contract by 4.4 per cent this year and bounce back to 5.2 per cent in 2021.
Till five years ago, India's per capita GDP was about 40 per cent higher than Bangladesh's. In the last five years, Bangladesh's per capita GDP has grown at an annual growth rate of 9.1 per cent, against 3.2 per cent growth reported by India during the same period.
As per economists, Bangladesh's economic growth has been on the back of its fast-growing export sector and a steady rise in the rate of savings and investment in the country. In contrast, India's exports have stagnated in the recent past, while savings and investment have fallen.