22nd September 2023 (10 Topics)
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Asking the wrong questions
Context:
The discrepancies in measurement of Gross Domestic Product (GDP) can make price volatility and consumers drawbacks.
Disputes over India's GDP Growth Rate
- Data Interpretation Discrepancies: Critiques incorrectly measure real GDP, highlighting the volatility of GDP price deflator. Normalizing data reveals less significant gaps, but substituting with a stable CPI measure suggests higher GDP growth rates.
- GDP Price Deflator vs. CPI: The GDP price deflator's volatility is influenced by factors like the Ukraine war and pandemic, impacting nominal GDP.
- Expenditure components of GDP: Expenditures are analysed over varying periods to substantiate claims of economic deceleration.
Critiques of the National Statistical Office
- Criticism of GDP Growth Number: The argument revolves around a perceived underestimation of GDP's output value in the first quarter.
- Comparison with US GDP Data: The US GDP data, often considered a benchmark, also experiences some divergence between GDP and GDI.
- Manufacturing sector and comparison: The 8% growth estimate for the first quarter but note potential manufacturing sector bias.
Defending the Statistical Methodology
- Appreciating the Methodology: Articles disputing GDP growth should acknowledge the methodology used in national accounts computation.
- Administrative body responsible: Casting aspersions on the statistical body is unwarranted when the economic momentum remains strong.
- India’s ability for growth: India's robust economic growth is likely to continue, making it one of the world's fastest-growing economies.
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