Number Theory: The state of the Indian economy in four charts -Roshan Kishore

-Hindustan Times

What do the latest numbers, analyst forecasts, and high-frequency data tell us about the state of Indian economy?

The National Statistical Office (NSO) released GDP numbers for the quarter ending September 2022 on November 30. GDP growth for the second quarter is 6.3%, which is exactly what the Monetary Policy Committee (MPC) of the RBI projected in its September resolution. What do the latest numbers, analyst forecasts, and high-frequency data tell us about the state of Indian economy? Here are four charts which explain this in detail.

The base effect is over

Two back-to-back disruptions because of the pandemic – the first was because of a 68-day long nation-wide lockdown which started on March 25, 2020 and the other, due to the second wave of the Covid-19 pandemic which peaked in May 2021 – have introduced a complicated base effect in the quarterly GDP numbers. The waning of base effect is the biggest reason behind the large moderation in GDP numbers between the June and September quarters this year. Having said this, it needs to be acknowledged that almost all institutional and private forecasters have made a downward revision to their growth forecasts for India’s GDP growth. Even the MPC, which was spot on in its GDP projection for the September quarter, expects growth in the December 2022 and March 2023 quarters to be just 4.6%.

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