Bangladesh to Overtake India in Per Capita GDP Again: IMF

Bangladesh is poised to overtake India in per capita GDP once again, according to the latest forecast from the International Monetary Fund (IMF). This development, reported by Prothom Alo English, highlights the shifting economic dynamics in South Asia. The IMF’s projections suggest that Bangladesh’s per capita GDP will edge past India’s in the coming years, marking a significant milestone for the country’s economic trajectory.

The forecast comes amid robust economic growth in Bangladesh, driven by a strong garment export sector and steady remittance inflows. India, on the other hand, has faced a slower recovery from the pandemic-induced slowdown, with per capita GDP growth lagging. Analysts say that while India’s overall GDP remains far larger, Bangladesh’s smaller population and consistent growth have enabled it to catch up on a per capita basis. This is not the first time Bangladesh has surpassed India; in 2020, Bangladesh’s per capita GDP was higher than India’s, according to World Bank data.

The IMF’s latest World Economic Outlook provides a detailed comparison. The table below shows the per capita GDP figures (in current US dollars) for both countries from 2020 to 2026, based on IMF data.

As the table illustrates, Bangladesh has consistently maintained a higher per capita GDP than India since 2020, and the gap is projected to widen by 2026. The IMF’s forecast underscores the divergent economic paths of the two neighbors. While India’s economy is larger and more diversified, Bangladesh has made remarkable strides in poverty reduction and human development, which have contributed to its per capita income growth.

“Bangladesh’s sustained economic growth, coupled with a relatively smaller population, has allowed it to outpace India in per capita GDP. This trend is expected to continue in the near term,” analysts say.

However, challenges remain for Bangladesh. The country’s export concentration in ready-made garments makes it vulnerable to external shocks, and the upcoming graduation from Least Developed Country (LDC) status in 2026 will bring new challenges, including the loss of preferential trade access. India, meanwhile, is focusing on structural reforms to boost manufacturing and attract foreign investment, which could help it regain momentum in per capita income growth.

For investors, the IMF’s forecast signals potential opportunities in Bangladesh’s growing consumer market and infrastructure development. India, despite the per capita gap, remains a major investment destination due to its size and reform agenda. Analysts say that both countries offer distinct advantages, and a diversified approach may be prudent.

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