DIFFERENT TAKE - Economy grew at 5.2% under old method: BofA-ML report

[fsayed]

DIFFERENT TAKE - Economy grew at 5.2% under old method: BofA-ML report

The gross domestic product (GDP) of the country has grown 7.4% in the second quarter ending September 2015, data released by the government, using new methodology , showed. But, the growth would have been lower at 5.2% under old methodology , said Bank of America-Merrill Lynch (BofA-ML) in a report. In the first quarter also (April-June), GDP growth was at around 5% under old series as against 7% according to the new series, the report added.
The new method (series) is more broad-based and gives a comprehensive picture of the economy as against the old series, says the government. But, the general perception is that the economy is not reflecting the mood that is normally seen when 7.4% growth is realised. Also, GDP growth in new series is lower than that measured on curren price, mainly because who lesale inflation is negative According to HSBC Globa Research, GDP on curren price grew at 6% but the growth was 7.4% in the rea term (at constant price) This means GDP was incre ased by 1.4 percentage points. “Nominal GDP grew at a much slower rate than real GDP implying that deflators (adjustment for inflation and other factors) have fallen sharply into the negative territory ,“ said the bank in the report.

Even at Gross Value Added (GVA) term, the economy at current price grew at 5.2% but the growth was 7.4% at constant price. Here, it is inflated by 2.2 percentage points. The bank said it seems that deflators have been underestimated in the new GDP series because services deflator has been “pegged more to WPI than CPI“, which is in the positive territory .

 

[Nilgiri]

Yes it was less under the old local method (not internationally prevalent method).

If you want to compare with international growth in other countries, then you measure your growth under those methods and standards.

As for pegging more to the WPI than CPI, that is a debate in itself.

 

[fsayed]

Yes it was less under the old local method (not international).

If you want to compare with international growth in other countries, then you measure your growth under those methods and standards.

As for pegging more to the WPI than CPI, that is a debate in itself.

I think bank of america expert veiws mention above is more important and serious for our economy then urs and mine bcoz he already running a bank which influence investor perception interm of investment and future growth of business

 

[Infinity]

Monthly Manufacturing figures are lowest of two years for nearly six months..................Exports are low.............How is the economy growing at 7.5% /5.2%..................I feel the actual figures should be far low

Manufacturing sector growth slumps to 25-month low in November - The Economic Times

 

[Didact]

I think bank of america expert veiws mention above is more important and serious for our economy then urs and mine bcoz he already running a bank which influence investor perception interm of investment and future growth of business

Both the sets of data can be correct without contradicting the other. In fact, there is no apparent contradiction between the two. The new methodology for GDP calculation analyses data from 500,000 industries that exist now; the earlier from 5,000 which existed in 2004-05. What the BofA-ML report implies is that those 5,000 industries or (1% of the total industry) are growing at 5.2% per annum, which is probably accurate based on a perusal of the data from the disappointing agricultural sector. But that still leaves some 99% of the industries that would be unaccounted for in this report.

Just to give you an example of the 99% industries unaccounted for in this list, the entire E-commerce sector didn't exist in 2005, and hence wasn't included in GDP calculations at all. The smartphone is another sector absent in the old calculation method. The new GDP estimation method takes into account sectors and industries such that this into account for a more accurate picture. That is why the WB, the IMF, the ADB all advise developing nations to upgrade the base year as frequently as possible.

 

[Nilgiri]

I think bank of america expert veiws mention above is more important and serious for our economy real then urs and mine bcoz he already running a bank which influence investor perception interm of investment and future growth of business

Its one bank out of many and its one minor quibble all things said regarding their overal analysis of India:

India offers relative value in 'slow-growth' world: BofA-ML - The Economic Times

Besides where exactly is this original report? I can't find it anywhere to get this quote of "WPI bias".

Monthly Manufacturing figures are lowest of two years for nearly six months..................Exports are low.............How is the economy growing at 7.5% /5.2%..................I feel the actual figures should be far low

Manufacturing sector growth slumps to 25-month low in November - The Economic Times

Month on Month survey based sentiment data (for just one month of a quarter) is a poor alternative to actual Year on Year output change.

If you don't take the time to understand the details of the indices (or at least first reading the previous threads covering them), dont bother posting the same articles again and again.

I would first suggest everyone reads this on CPI vs WPI and overall deflator:

Why deflator is best indicator of price rise | The Indian Express

 

[SarthakGanguly]

Monthly Manufacturing figures are lowest of two years for nearly six months..................Exports are low.............How is the economy growing at 7.5% /5.2%..................I feel the actual figures should be far low

Manufacturing sector growth slumps to 25-month low in November - The Economic Times

India is moving towards being a failed state.

Modi should be held to account.

 

[fsayed]

Its one bank out of many and its one minor quibble all things said regarding their overal analysis of India:

India offers relative value in 'slow-growth' world: BofA-ML - The Economic Times

Besides where exactly is this original report? I can't find it anywhere to get this quote of "WPI bias".



Month on Month survey based sentiment data (for just one month of a quarter) is a poor alternative to actual Year on Year output change.

If you don't take the time to understand the details of the indices (or at least first reading the previous threads covering them), dont bother posting the same articles again and again.

I would first suggest everyone reads this on CPI vs WPI and overall deflator:

Why deflator is best indicator of price rise | The Indian Express

Private sector firms' PAT fell 9.9% in Q2 FY16: RBI - The Economic Times

 

[Nilgiri]

Private sector firms' PAT fell 9.9% in Q2 FY16: RBI - The Economic Times

Anymore cherry picked figures to quote while you skirt my main points?

 

[SarthakGanguly]

Its one bank out of many and its one minor quibble all things said regarding their overal analysis of India:

India offers relative value in 'slow-growth' world: BofA-ML - The Economic Times

Besides where exactly is this original report? I can't find it anywhere to get this quote of "WPI bias".



Month on Month survey based sentiment data (for just one month of a quarter) is a poor alternative to actual Year on Year output change.

If you don't take the time to understand the details of the indices (or at least first reading the previous threads covering them), dont bother posting the same articles again and again.

I would first suggest everyone reads this on CPI vs WPI and overall deflator:

Why deflator is best indicator of price rise | The Indian Express

India was a money maker during the UPA rule. See the multi thousand crore losses to the exchequer. That itself meant that India had the potential. Now even those big budget scams are absent as Modi has ensured that no capital remains here.

 

[Nilgiri]

India was a money maker during the UPA rule. See the multi thousand crore losses to the exchequer. That itself meant that India had the potential. Now even those big budget scams are absent as Modi has ensured that no capital remains here.

Yah all the figures by BJP are totally wrong....they simply rubbed away the minus of the final figure to make it positive....i.e we are actually contracting by more than 7%! An evil sanghi conspiracy!

 

[fsayed]

Anymore cherry picked figures to quote while you skirt my main points?

India’s November services PMI hits 5-month low - The Economic Times

 

[Nilgiri]

India’s November services PMI hits 5-month low - The Economic Times

Already responded to (and ignored by you). Anything else?

 

[fsayed]

Already responded to (and ignored by you). Anything else?

Plz read and respond other wise u will be ignored

 

[Nilgiri]

Plz read and respond other wise u will be ignored

Responded to in post 6.

Let me copy and paste it again:

Month on Month survey based sentiment data (for just one month of a quarter) is a poor alternative to actual Year on Year output change.

Tell me if you are able to make any sense of why.