Surprise GDP Flattered by Data Calculation: Analysts

While growth was stronger than expected, a lower deflator—used to strip out inflation from economic output—may have boosted the headline figure, economists from Goldman Sachs Group, HSBC Holdings, and Nomura Holdings wrote in their reports

- ANUP ROY

INDIA'S SURPRISINGLY STRONG economic growth last quarter was likely exaggerated by statistical factors, economists said, and will push up full-year forecasts even as higher US tariffs take a toll.

Data last week showed the economy expanded 7.8% in the April-June quarter—the most in over a year and way above the 6.7% median forecast in a Bloomberg survey of economists.

While growth was stronger than expected, a lower deflator—used to strip out inflation from economic output—may have boosted the headline figure, economists from Goldman Sachs Group Inc, HSBC Holdings Plc, and Nomura Holdings Inc wrote in their reports.

The reading assumes significance as the market is closely watching for signs of the economy's ability to absorb the coming pressure from the 50% US tariffs that kicked in last week.