India on Monday released its GDP growth estimate for the current fiscal year, the latest data under a new methodology that everyone including the central bank governor is still grappling with. With expansion seen at 7.4 percent in the year through March, India’s on par with China. The 7.5 percent pace reported for the third quarter is the fastest of large emerging markets.
While that sounds impressive, economists can’t quite reconcile the robust GDP data with numbers reported in the past few quarters that point to lackluster credit growth, weak manufacturing and subdued corporate investment. Even so, India is hardly the first country to change the way it measures GDP growth — and get a big boost because of it.
Remember how Nigeria last year was declared the biggest African economy after it bumped up its 2013 GDP estimate by a whopping 89 percent? Back in the 1980s, Italy overtook Britain as the world’s fifth-largest economy after reevaluating its GDP to include the informal sector, a source of pride they called “il sorpasso.”