India's economy grows at faster-than-expected pace of 7.8% in December quarter
#India GDP #Economic growth #Data overhaul #IMF rating #US tariffs #Base year #Domestic consumption #Fiscal projection
📌 Key Takeaways
- India's economy grew 7.8% in October-December quarter, exceeding economists' expectations
- India overhauled its economic data calculation framework, updating the base year from 2012 to 2023
- The changes address IMF concerns that had resulted in a 'C grade' rating for India's economic data
- Despite challenges from U.S. tariffs, India's economy remains resilient with projected 7.4% growth for the current fiscal year
📖 Full Retelling
India's economy demonstrated stronger-than-expected growth of 7.8% in the October-December quarter, according to data released by the Ministry of Statistics & Programme Implementation (MoSPI), surpassing economists' forecasts of 7.2% and marking a slight slowdown from the previous quarter's 8.2% expansion. The robust performance comes after India implemented significant changes to its economic data calculation framework in January, addressing international concerns about data accuracy. The International Monetary Fund had previously assigned India's economic data a 'C grade' rating, citing the use of an outdated base year (2011/12) and questionable inflation calculation methods. The new GDP series shifts the base year to financial year 2023 from 2012, with MoSPI secretary Saurabh Garg indicating these changes should improve the IMF's assessment of India's national accounts data. During the quarter, India's economy showed selective strength in domestic consumption of gold and automobiles during the festive season, while simultaneously facing challenges from U.S. tariffs that affected key exports including textiles, marine products, gems and jewelry. However, the government reported that affected products have found alternative markets, with India's economy still projected to grow 7.4% in the fiscal year ending March 2026, outpacing the previous fiscal year's 6.5% growth despite export concerns.
🏷️ Themes
Economic Growth, Data Accuracy, International Trade
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Measure of increase in market value of goods
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Original Source
India's economy grew at a faster pace than expected of 7.8% in the quarter ending December. A Reuters poll of economists had pegged the October-December gross domestic product to grow at 7.2%. In the previous quarter, India's GDP growth rate was 8.2%. The latest print comes after the government overhauled the framework for calculating economic output to improve accuracy. In January, India's Ministry of Statistics & Programme Implementation introduced changes to the GDP series, inflation and industrial production data to strengthen data quality, credibility and policy relevance, it said in a statement. As part of the changes to the framework, the world's fastest-growing economy will shift the gross domestic product base year to financial year 2023 from 2012. In a report last year, the International Monetary Fund had raised concerns over the accuracy of the Indian government's economic data and assigned it a "C grade" rating, its second-lowest rank. watch now VIDEO 5:00 05:00 India's GDP overhaul: A better collection of data better than misreading economy Inside India The government data has limitations, such as the use of "an outdated base year (2011/12)" and the use of wholesale price indices and single deflation for calculating inflation, all of which can distort real economic measures, the IMF said in its report. "The new GDP series will largely address the concerns of the IMF, and as a result, we expect that their assessment and rating of India's national accounts data will change," Saurabh Garg, secretary at MoSPI, said in an interview with local media on Thursday. Domestic consumption, tariffs During the December quarter, the Indian economy saw a selective uptick in domestic consumption of gold and automobiles due to the festive season. However, this was also the first full quarter when Indian exporters felt the brunt of the U.S.' 50% tariffs. Indian exports to the U.S. have been facing those tariffs since August last year, but the two countries have now agreed...
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