Indians are no longer rich than Bangladeshis? Here is what you need to know

NewsDesk    17-Oct-2020
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In the latest Economic Outlook report released by IMF, Bangladesh has overtaken India in GDP per capita of 2020.

This report is doing round on social media where few people who have the mastery to share negative aspects of our nation are thumping their chest and weeping that Indians are now less rich than Bangladeshis. But there is something which you must know before forming an opinion based on the buzz on social media.

This report is based on normal terms.

The predicted figure of GDP per capita released by IMF is nominal per capita GDP, not the real per capita GDP.

In nominal per capita GDP, one of the important factors like inflation is not taken into consideration.

Now, in Bangladesh since last 5–6 years, the level of inflation is on the rise whereas, in India, it is on the decline.

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This report has been computed without taking inflation factor into account.

Inflation is an important factor which affects per capita GDP of the nation because if inflation is low, income levels will be more and vice verse.

Also, this per capita GDP is calculated by dividing total GDP with the total population. Now in Bangladesh, the population is way less than that of India which naturally gives Bangladesh maturing economy an edge.

Hence, in terms of real per capita GDP which is an accurate indicator, we are still ahead of Bangladesh. Our average citizens still have more income level than an average Bangladeshi citizen.

It is just in nominal terms (without inflation factor), we are lagging for the year 2020.

In 2021, we will be again ahead in nominal terms also but the fight in nominal terms will go neck to the neck in future if this IMF report is to be believed.