COVID-19 creates hurdles in yet another progress of Indiawith a sharp contraction in the Indian economy being seen. The neighbor Bangladeshis set to beat India in terms of per capita gross domestic product (GDP), asclaimed by International Monetary Fund (IMF).
The international agency’s World Economic Outlook (WEO) foryear 2020 estimates that Bangladesh’s per capita GDP may grow at 4%, while thatof India may decline 10.5%. The figures make India the third-poorest nation inSouth Asia and only Pakistan and Nepal behind it. The other countries SriLanka, Bhutan, Bangladesh, and Maldives would be ahead of India.
Contrary to the expectations due to the pandemic, two countriesin South Asia, Nepal and Bhutan, are expected to grow their economies.
There is a silver lining for India in that the agency sees asharp recovery in 2021 and sees this pushing the per capita GDP ahead of thatof Bangladesh.
The geographic size of the two neighbors, India andBangladesh, is quite different and the former has led the latter till five yearsago by 40%. However, the strong exports of Bangladesh coupled with a steadygrowth in rate of savings and investments are giving the country lead.
The WEO database clarifies that India’s economic contractionin this year will be the worst since the 1990-91 economic crisis and thecontraction at that time was 17.5%.
In 40 years, the per capita GDP has contracted 8 times, andthis year will be the first time in the last 20 years.