8.5% Growth in 2014-15? Experts are sceptic
Updated: Feb 28, 2015 10:25:08am
New Delhi, Feb 28 (KNN) The Economic Survey released on Friday by the Government projects that country's economic expansion will accelerate to a four-year high 8.5% in the coming fiscal year.
If its growth matches the latest estimates from New Delhi, India will be outpacing China this calendar year for the first time since the 1990s. Economists expect China’s economy to expand by 7% or slightly less this year.
However, much of the glory goes to the recent radical changes in the way the gross domestic product is being measured. After changing the base year and incorporating new data sources in January, India’s recent GDP growth estimates were bumped up considerably:
In the year that ended March 2014, for instance, economic expansion was said to be 6.9% instead of 4.7% as previously estimated. This fiscal year economists had been expecting around 5.5% GDP growth and now under the new methodology the government says growth will be closer to 7.4%.
In its pre-budget review, India's Finance Ministry said it expects Asia's third-largest economy to grow between 8.1% and 8.5% in the next fiscal year, which begins in April. That represents a significant acceleration from the 7.4% growth the ministry forecast for this fiscal year. Last month India tweaked the way it calculates GDP in a way that changed the last fiscal year—a period when India was originally thought to be stuck in a slowdown—into a year of resurgence.
The survey said falling oil prices and Prime Minister Narendra Modi’s commitment to economic overhauls have improved the country’s outlook despite uncertainties about interest rates in the U.S. and continuing troubles in the eurozone. It said that if the optimism and policy changes continue, India’s expansion could eventually accelerate to more than 10%.
But with other indicators of business and consumer activity—from imports to auto sales—still showing weakness, the revised data have been greeted with skepticism by many economists and policy makers
Coming a day before the Indian government unveils its budget for the next fiscal year, the economic survey appeared to temper expectations that PM Modi will use the budget as a platform to launch radical, far-reaching economic overhauls. (KNN/DB)
If its growth matches the latest estimates from New Delhi, India will be outpacing China this calendar year for the first time since the 1990s. Economists expect China’s economy to expand by 7% or slightly less this year.
However, much of the glory goes to the recent radical changes in the way the gross domestic product is being measured. After changing the base year and incorporating new data sources in January, India’s recent GDP growth estimates were bumped up considerably:
In the year that ended March 2014, for instance, economic expansion was said to be 6.9% instead of 4.7% as previously estimated. This fiscal year economists had been expecting around 5.5% GDP growth and now under the new methodology the government says growth will be closer to 7.4%.
In its pre-budget review, India's Finance Ministry said it expects Asia's third-largest economy to grow between 8.1% and 8.5% in the next fiscal year, which begins in April. That represents a significant acceleration from the 7.4% growth the ministry forecast for this fiscal year. Last month India tweaked the way it calculates GDP in a way that changed the last fiscal year—a period when India was originally thought to be stuck in a slowdown—into a year of resurgence.
The survey said falling oil prices and Prime Minister Narendra Modi’s commitment to economic overhauls have improved the country’s outlook despite uncertainties about interest rates in the U.S. and continuing troubles in the eurozone. It said that if the optimism and policy changes continue, India’s expansion could eventually accelerate to more than 10%.
But with other indicators of business and consumer activity—from imports to auto sales—still showing weakness, the revised data have been greeted with skepticism by many economists and policy makers
Coming a day before the Indian government unveils its budget for the next fiscal year, the economic survey appeared to temper expectations that PM Modi will use the budget as a platform to launch radical, far-reaching economic overhauls. (KNN/DB)
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