International Monetary Fund has formally released the World Economic Outlook report on 13 Oct 2020. According to the WEO report, In 2020, India will to slip below Bangladesh in terms of per capita GDP. Current report Highlights that In 2020, Bangladesh is likely to expand by 4 per cent. It stated that, Indian Economy is facing contractions because of Covid-19 lockdown.
Points To Note
- World Economic Outlook 2020 report has stated that India’s economy will contract by 10.3 per cent. The growth rate of India will be the slowest among BRICS countries. It is India’s lowest growth in 4 years.
- This has revised the growth projections of the world by 0.8 per cent as compared to June 2020. It states that, after 2021 the Global growth would be at 3.5 per cent.
- In 2020, consumer prices in India will grow at 4.9 per cent while 3.7 per cent in 2021.
- The current account balance of India has been projected to grow by 0.3 per cent in 2020 and will be up to 0.9 per cent in 2021.
- India would be the third poorest country in South Asia according to the WEO report along with Pakistan and Nepal. Bangladesh, Bhutan, Maldives and Sri Lanka have been placed above India.
- WEO report highlights that India’s economy has been hardest-hit by the pandemic in South Asia after Sri Lanka.
- In 2020, Sri Lanka’s per capita GDP has been projected to contract by 4 per cent .
Situation in 2021
World Economic Outlook report for 2021 forecasts that there will be a sharp economic recovery in the Indian economy. In 2021, India’s GDP will grow by 8.8 per cent . Thus, it will push India ahead of Bangladesh’s per capita GDP of 5.4 per cent in 2021.
The latest report of International Monetary Fund have projected a deep recession in 2020. It has projeced the global growth to be 4.4 per cent. There is an upward revision of 0.8 per cent in the latest projection.
World Economic Outlook report have recommended that there is a need of Global fiscal support of $12 trillion which can be infused through asset purchases, liquidity injections and the rate cuts by the Reserve Bank of India. It has also suggested the Nations to collaborate on treatments and tests of CORONAVIRUS vaccines. It also suggests, the policies framed by the Central government should focus on limiting the economic damage and add workers to transit towards growing sectors.
India to slip below Bangladesh in Per Capita GDP