GDP grew 7.8% — and almost every forecaster, this paper included, had it wrong
The April–June quarter came in a full point above the Reserve Bank's own 7% projection and well above the 6.4–7.2% range forecasters were printing a week ago. Real GVA grew 8.2%.
Last week this paper told you that forecasters expected a four-quarter low, somewhere between 6.4% and 7.2%. The number the NSO published on 31 August was 7.8% — not a four-quarter low but the joint-strongest print in five quarters, comfortably past the RBI's own 7% projection. Real GDP reached ₹81.36 lakh crore against ₹75.46 lakh crore a year earlier; nominal GDP rose 10.3% to ₹88.27 lakh crore, and real gross value added — the measure that strips out taxes and subsidies, and the one closer to what a business actually experiences — grew 8.2%.
We print the miss because it matters more than the number. A consensus this wide of the mark, in the same fortnight that the MPC's own minutes projected 5.9% inflation by winter, tells you how little anyone can currently price the next two quarters. If you were holding back a hire or a machine because the mood in the commentary was gloomy, the mood was not data. And if the quarter was strong for you too, the arithmetic that follows is your advance-tax instalment on 15 September: 45% of the year's liability, cumulative, computed on this year's run-rate rather than last year's.