IMF Supports India’s Updated GDP Calculation as Aligned with Best Practices
The International Monetary Fund (IMF) has endorsed India’s revised method for calculating gross domestic product (GDP), stating it aligns with sound statistical practices and the guidance provided by the organization. Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, characterized the revision as a “welcome development” and noted that it adheres to recommendations from the IMF’s statistics department. He acknowledged the efforts of the Ministry of Statistics and Programme Implementation (MOSPI) in enhancing GDP statistics.
Srinivasan emphasized that the revisions are consistent with good practices in GDP measurement. He acknowledged that while there is always room for improvement, the work done by MOSPI to strengthen GDP statistics deserves recognition. The IMF’s remarks follow its recent upward revision of India’s GDP growth forecast for 2026-27 to 7%, up from a previous estimate of 6.4%. This adjustment reflects stronger-than-expected economic momentum, resilient domestic demand, and robust services activity.
Currency Pressure Not Indicative of Weak Growth
Srinivasan also addressed the recent pressure on India’s exchange rate, attributing it to external factors rather than domestic economic performance. He stated that fluctuations in the exchange rate are influenced by global interest rates, investor risk appetite, and oil prices. The IMF’s Regional Economic Outlook for Asia and the Pacific included India among emerging economies facing currency pressure following an energy shock, but Srinivasan clarified that this does not signify a disconnect with the country’s economic growth.
Revised GDP Estimates Spark Political Dispute
India’s GDP calculation method faced scrutiny after the government reported a surprising growth rate of 7.8% for the June quarter. Former finance secretary S C Garg questioned the figures, alleging that previous data had been manipulated to inflate the reported growth rate. Opposition parties have leveraged Garg’s claims to challenge the credibility of the government’s GDP numbers. In response, Chief Economic Advisor V Anantha Nageswaran dismissed Garg’s arguments as “cherry-picking” of data, explaining that the latest GDP estimates were based on a new financial year ending in March 2023, which also led to revisions of quarterly GDP figures from the previous year.
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