Growth spurt doesn’t worry economists

India’s economic growth numbers have undoubtedly surprised economists and analysts, but not enough to trigger doubts about the quality of the data.

- Shayan Ghosh

Among reasons why it appears higher than forecasts is unavailability of high-frequency indicators for services growth and private consumption, sectors that have shown strong growth in the July-September quarter, they said.

However, they believe it needs to be seen whether private consumption, which improved this time around, can retain its momentum since the goods and services tax (GST) cuts came into effect at the end of September quarter.

The Indian economy reported 8.2% growth in the three months through September, showed government data on Friday. Not only did it beat estimates by economists, but it was significantly higher than the 7% forecast of the Reserve Bank of India (RBI).

Given that the surprise growth numbers came in two days after the International Monetary Fund (IMF) graded India’s national accounts data a C-grade on an A to D scale, some have questioned the ability of the data to paint a true picture of the economy.

“I would not go as far as to question the data,” said Gaura Senguta, chief economist, IDFC First Bank.