The IMF World Economic Outlook report 2020 did not claim that India will be poorer than Bangladesh by 2025 - FACTLY
Sai Krishna Muthyanolla
May 3, 2024
A social media post alleges that according to the most recent World Economic Outlook report by the International Monetary Fund (IMF), “India will be poorer than Bangladesh by 2025” (here & here). In this article, we verify the accuracy of this statement.
Claim: IMF in its latest World Economic Outlook stated that “India will be poorer than Bangladesh by 2025”.
Fact: This claim originated in 2020, when the IMF Outlook projected that Bangladesh’s per capita GDP had surpassed India’s. However, this conclusion can be misleading because GDP per capita does not directly indicate a country’s overall wealth. Importantly, since then, India has outperformed Bangladesh in various economic metrics and is projected to continue doing well in the future. Hence, the claim made in the post is FALSE.
The IMF published its most recent World Economic Outlook in April 2024. Although the report does not compare the Indian economy directly with Bangladesh, it provides growth projections for both countries. According to the report, India’s GDP is expected to grow at 6.8% in 2024 and 6.5% in 2025. In contrast, Bangladesh’s GDP growth is estimated to be 5.7% in 2024 and 6.6% in 2025.
The narrative that India had fallen behind Bangladesh economically began in 2020, following an IMF Outlook report that indicated Bangladesh’s real per capita GDP had overtaken India’s. In nominal US dollar terms, the report projected India’s per capita GDP for 2020 at $1,876.53, slightly below Bangladesh’s projection of $1,887.97. It was based on these figures that the discussions about India becoming economically poorer than Bangladesh started.
India leads in multiple indicators:
However, this conclusion is misleading because GDP per capita does not directly reflect a country’s wealth. It’s important to distinguish between total GDP and GDP per capita; the latter is a measure of the average income per person within an economy, calculated by dividing the total GDP by the population size. Additionally, it should be noted that the 2020 GDP per capita projections were made during the COVID-19 pandemic when economies were disrupted by lockdowns, further complicating direct comparisons.
Contrary to the widespread assertion, India has consistently maintained a significantly larger economy than Bangladesh, irrespective of the year. According to the IMF’s latest April 2024 Outlook, India’s GDP at current prices is projected to reach $4.3 trillion in 2025, whereas Bangladesh’s is expected to reach only $491.81 billion.
Even the GDP per capita projections further indicate that India has overtaken Bangladesh. The IMF forecast for 2024 indicates that India’s per capita GDP will be $2730, compared to Bangladesh’s $2650. These projections suggest that India’s per capita GDP will continue to exceed that of Bangladesh at least through 2028.
Moreover, projections of GDP at purchasing power parity (PPP) per capita also indicate that India is performing better than Bangladesh. Historically, India has consistently led Bangladesh in this measure. Although India’s GDP at PPP per capita approached Bangladesh’s levels during the COVID-19 outbreak in 2020, subsequent projections show India’s figures improving. By 2025, India’s GDP at PPP per capita is expected to reach $10,870, compared to Bangladesh’s $10,170.
Therefore, these metrics refute the viral claim that India has become economically poorer than Bangladesh. It’s evident that an erroneous conclusion has been drawn by conflating GDP per capita with overall GDP projections. Previously, when a similar claim circulated widely, the Press Information Bureau (PIB) clarified that it was false, emphasizing that India continues to be a significant contributor to global growth.
It is being falsely claimed that as per IMF's latest World Economic Outlook, "India will be poorer than Bangladesh by 2025 & is no more a developing nation" #PIBFactcheck
✅India remains a ‘bright spot’ & contribute 15% of global growth in 2023: IMF MD Kristalina Georgieva pic.twitter.com/82rDIcyxU4
To sum up, the IMF World Economic Outlook report 2020 did not claim that India will be poorer than Bangladesh by 2025