India’s economy expands by 7.8% growth in December quarter
Construction workers work on a high-rise building in Kolkata on July 23, 2024.
Dibyangshu Sarkar | Afp | Getty Images
The Indian economy grew faster than expected at 7.8% in the end-December quarter.
A Reuters survey of economists had predicted that gross domestic product would rise 7.2% in the October-December period.
The latest crackdown comes after the government overhauled its economic output calculation framework to improve accuracy.
While India’s GDP growth rate was 8.2% in the previous quarter, this rate was revised to 8.4% according to the new series. The GDP growth forecast for fiscal 2026 has also been increased to 7.6% from 7.4% previously.
Ministry of Statistics and Program Implementation of India (MoSPI) in January changes The statement stated that the GDP series, inflation and industrial production data will strengthen data quality, reliability and policy relevance.
As part of the changes to the framework, the world’s fastest-growing economy will shift its gross domestic product base year from 2012 to fiscal 2023.
In a report last year, the International Monetary Fund had expressed concerns about the accuracy of the Indian government’s economic data. appointed it is a “grade C” rating, its second-lowest ranking.
The IMF report said government data has limitations such as using “an outdated base year (2011/12)”, wholesale price indices, and single deflation to calculate inflation, all of which can distort true economic measurements.
“The new GDP series will largely address the IMF’s concerns and we expect its assessments and ratings of India’s national accounts data to change as a result,” MoSPI secretary Saurabh Garg said in a statement. he said. report with local media on Thursday.
Domestic consumption, tariffs
In the December quarter, the Indian economy saw a selective increase in domestic consumption. gold and automobiles due to the festive season. However, this was also the first quarter in which Indian exporters felt the brunt of the US’s 50% tariff.
India’s exports to the US have been facing these tariffs since August last year, but the two countries have now agreed to an interim trade deal that reduces tariffs to 18%.
But the situation became more complicated last Friday when the U.S. Supreme Court declared much of President Donald Trump’s tariff regime illegal. Washington currently imposes global tariffs of 10% and is threatening to raise them further.
India’s economic growth has not been hampered by the slowdown in exports to the US, the economic survey published last month said.
Textiles, seafood, gems and jewellery, automobile components and leather products are among India’s top exports affected by US tariffs. However, according to data shared by the Indian government, these products have found alternative markets.
