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 .
...why ? I am not interested in a popularity contest. At least not in a forum full of Bigots 
