A political slugfest has been created after the International Monetary Fund’s projection, that Bangladesh is set to surpass India in nominal per capita GDP terms in 2020, but the analysis of the IMF data suggests the event is unlikely to be a blip for one year.
The coronavirus pandemic shook India in 2020, India got hit harder than Bangladesh, India’s nominal per capita GDP is set to decrease from $2100 in 2019 to $1880 in the current financial year. However, the nominal per capita GDP of Bangladesh during the same period is projected to surge from $1820 in 2019 to $1890 in 2020, marginally higher than that of India. Nonetheless, according to the IMF projection, India will again outperform Bangladesh in 2021 as its economy will bounce back from the ongoing situation. IMF’s projections for India and Bangladesh for 2021 are $2030 and $1990.
Nonetheless, with Bangladesh projected to match India’s nominal per capita GDP in 2024 at $2540, the good news is unlikely to last long for India. Bangladesh In 2025, is projected to overtake India again with nominal per capita GDP at $2760 against $2730 for India.
After the news outbreak that Bangladesh will outperform India’s nominal per capita GDP in 2020 for one year, a political slugfest broke out. Congress leader Rahul Gandhi tweeted: “Solid achievement of 6 years of BJP’s hate-filled cultural nationalism: Bangladesh set to overtake India.”
However, the government processed that per capita gross domestic product of our country is far bigger than Bangladesh compared in purchase power parity terms. Last year, India’s gross domestic product in purchasing power parity terms (PPP) was eleven times a lot of that of Bangla Desh whereas the population was eight times a lot of. In purchasing power parity (PPP) terms, India’s per capita gross domestic product in 2020 is calculable by International Monetary Fund at $6284 as compared to $5139 for Bangladesh,” it added.
The government also processed that on the subject of per capita gross domestic product, it’s conjointly vital to notice that underneath prime minister Narendra Modi, it’s accumulated from ₹83,091 in 2014-15 to ₹1,08,620 in 2019-20 that is a rise of thirty.7%. During the time of UPA the GDP of India accumulated from ₹65,394 in 2009-10 to ₹78,348 in 2013-14 that is a rise of 19.8%.
The de-growth projection comes after India reported a contraction in its GDP for the June quarter at 23.9%, making it the worst performer among G20 economies. The Reserve Bank of India last week admitted that the economy will contract 9.5% in FY21, with a mild recovery in economic activity in the March quarter.
What makes this situation even worse is that till five years ago, India’s per capita GDP was nearly 40% higher than Bangladesh’s. In the last five years, Bangladesh’s per capita GDP has grown at a compound annual growth rate of 9.1%, compared with 3.2% growth reported by India during the same period.
With the ongoing US-China trade war, apart from other global tensions, Bangladesh has over the years adapted to the changing landscape and has managed to grow its exports, leading to a rise in its per capita GDP growth. The country is now set to overtake India which had a significant lead over it a few years ago.
Bangladesh’s GDP growth in the last few years has averaged around 8%, according to reports, at a time when economic growth in the rest of the world was slowing down. HSBC Bank had predicted that Bangladesh would be the 26th largest economy in the world by 2030.