New Delhi: With the world nations reeling under the impact of the COVID-19 pandemic and the lockdown it induced, the Indian economy is expected to contract by 10.3 per cent, the International Monetary Fund says. This is as a part of the expected global economic contraction, projected to be 4.4 per cent, IMF forecast in a report.
In its World Economic Outlook October 2020 report titled “A Long and Difficult Ascent,” the IMF forecasts that India’s gross domestic product (GDP) will plunge 10.3 percent this fiscal year ending on March 31, 2021, the biggest contraction since the country became independent in 1947. This is also the biggest slump of all the emerging nations. Among the other countries in the BRICS group, Brazil’s economy will contract 5.8 percent, Russia 4.1 percent, South Africa 8.0 percent while China will grow 1.9 percent, according to the IMF’s report.
The 2020 IMF prediction for India is a downgrade of -5.8 percentage points from the IMF’s June projection for the country. India is expected to rebound in 2021 with 8.8 percent growth – an upgrade of 2.8 percentage points relative to the June update.
This projection is even grimmer than what the Reserve Bank of India (RBI) predicts. RBI forecasted that there will be a contraction of 9.5% in the GDP for the current fiscal year.
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Bangladesh to overtake India in GDP per capita: IMF forecast
While India’s per capita GDP is expected to decline by 10.5 per cent to $1,877 in 2020, Bangladesh, on the other hand, is expected to rise by 4 per cent to $1,888. This projection is being seen as a major setback for the BJP-led government since the report states five years ago, India’s per capita GDP was nearly 40 per cent higher than that of Bangladesh.
Former Congress President Rahul Gandhi on Wednesday targeted the Centre after the IMF released its predictions. Sharing a graph showing the projection of per capita GDP, Rahul Gandhi wrote on Twitter: “Solid achievement of 6 years of BJP’s hate-filled cultural nationalism: Bangladesh set to overtake India.”
Added to this, since GDP figures are at current prices, India is likely to become the third poorest country in South Asia with only Pakistan and Nepal reporting lower per capita GDP.