GDP Data Are Excellent But Watchful

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The most recent GDP statistics are encouraging but not deceptive because they show upward trends. Quarterly GDP numbers need to have included a disclaimer: Important, proceed with caution! Examine the data indicating 7.6% GDP growth for the July-September quarter to comprehend the rationale behind this. Examine the sector-specific numbers, which demonstrate this growth. Relative to the same quarter last year, the manufacturing sector grew by 13.9%, which is shockingly larger than the growth rate of other sectors. The manufacturing rate dropped by 3.8% in the July-September quarter, stunning everyone, which is why the figure has climbed so much. Therefore, the comparison basis was somewhat smaller this time.

Based on the data from both the current quarter and the previous quarter, there was only a 10.1% increase (13.9-3.8), resulting in an average of 5-5% for the two quarters. The GDP growth in the most recent quarter will also decrease from 7.6% to about 6% if the figure of 13.9% stays “normal,” or 5% after performing calculations like a journalist (and the figure for the July-September quarter last year has increased Will go). Thus, the first piece of advice when looking at GDP data is to pay particular attention to the industries that are growing at the highest rate.

The GDP statistics are subject to additional qualifiers, such as the method inflation is used to convert nominal growth (at current prices) into real growth (at constant prices). Some of the other statistics utilized, such the sizeable unorganized sector, have fragile statistical foundations. how GDP has been calculated using fluctuations in the cost of imported items (like oil). It’s peculiar. Additionally, they 1 have demonstrated higher gross growth in the most recent quarter. However, it’s safe to say that economists and statisticians have made a living out of deciphering India’s official GDP numbers.

While no fraud is being claimed, there is a warning that the true voice has to be heard rather than the numbers being celebrated. The numbers have been further muddled by Covid. For instance, the first half boom, which was observed as a result of recovery from the Covid recession, was the true cause of last year’s rise of 7.2%. Although the epidemic may have caused some decreases or faults, India’s statistical system and databases still have long-term issues.

One-sided statistics are never true. If one period’s data are inflated, subsequent periods’ values are automatically deflated. As a result, while the 7.7% GDP growth in the first half of this year and the 7.2% GDP growth in the previous fiscal year are fantastic, the real pace is a little slower, and the growth rate in the upcoming quarters is probably going to be about 6 percent. India’s long-term growth rate will be roughly represented in the final quarter number.

The assumption of a higher growth rate stems from the fact that private investment has not yet reached its full capacity in the economy. The GDP data indicate a slow development in personal spending, but they have also recorded a sharp increase in personal loans, which suggests that the growth rate may be low. Loan recipients will not spend the money; instead, they will return the debt in upcoming quarters. In this sense, the GDP would decline and investment would cease as a result of the lack of continuous development in consumption.

However, these facts make it impossible to dispute the strength of the Indian economy. It is outperforming all other major economies and expanding twice as quickly as the world economy. As a result, word is getting out both domestically and internationally every quarter that India may lead the world’s economies in this decade.

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