How the Covid-19 pandemic has hit GDP growth

Daniel Fowler
October 17, 2020

Comparing India's per capita GDP with that of Bangladesh alone is somewhat arbitrary as South Asia as a whole continues to be among the world's poorest regions, and the entire region is going to suffer a shock on account of the global recession, Bose said.

Bangladesh's gross savings rate was recorded at 30.1% in June 2020, and 29.5% in June 2019, against a record low of 27.4% in June 2018, data showed.

"This is quite a fall from being the "fastest-growing major economy in the world", he said. Its economy is expected to expand 1.9 percent, an upward revision of 0.9 points. Three other countries, Afghanistan (5%), Pakistan (0.4%) and Sri Lanka (4.6%) will also experience a contraction in GDP this year.

"While low interest rates alongside the projected rebound in growth in 2021 will stabilise debt levels in many countries, all will benefit from a medium-term fiscal framework to give confidence that debt remains sustainable", the chief economist said.

China's GDP expanded 3.2 percent year-on-year in the second quarter, reversing a contraction of 6.8 percent in the first quarter, according to the National Bureau of Statistics.

The IMF estimates China will grow by 8.2 per cent next year, down a full percentage point from the IMF's April estimate but strong enough to account for more than one-quarter of global growth.

The IMF is not the only global organization that has raised its forecast for China.

After a blip however, India's per capita GDP is expected to overtake Bangladesh's per capita GDP in 2021, with the International Monetary Fund projecting it to be $2,030.62 as against $1,989.85 of the latter.

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She said this was partly because countries needed to boost spending to fight the crisis and secure the recovery.

Brazil and Russian Federation are projected to contract by 5.8 and 4.1 percent respectively, while India's economy could see a contraction of 10.3 percent.

"But nearly all countries are still hurting, especially emerging market and developing economies".

According to the IMF's projection, India is projected to regain its position as the fastest-growing emerging market and developing economies in 2021, with 8.8 per cent economic growth, followed by China at 8.2 per cent.

"This is the worst crisis since the Great Depression, and it will take significant innovation on the policy front, at both the national and worldwide levels, to recover from this calamity", Gopinath said.

On the role of the International Monetary Fund, she said that since the pandemic began, the International Monetary Fund had been pressing ahead with full force and commitment with its policy advice, capacity development and financial resources.

The upgraded outlook compared to the dire forecast in June reflects the fact the downturn in the second quarter "was very bad but it was the less terrible than we expected", Gopinath said in an interview with AFP. He added that China will increase its contribution to global economic growth, which could potentially further change the global economic structure.

While the considerable global fiscal support of close to 12 trillion dollars and the extensive rate cuts, liquidity injections, and asset purchases by central banks helped saved lives and livelihoods and prevented a financial catastrophe, Gopinath noted that there is still much that needs to be done to ensure a sustained recovery. In the boom years of 2003-08, India's real export growth averaged 17.8% for five successive years whereas domestic consumption (public and private) averaged just 7.2%.

Dream11 IPL 2020, Match 33: RR vs RCB
Even though the former West Indies captain has not been well, Rahul said he could see his determination to be on the field. So, that was the thought behind it and I thought if I get few of the middle then I will get keep going", Agarwal said.

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