Robust GDP figures have left economists dazed and have raised fresh doubts about the quality of India's official economic data reporting. Annual gross domestic product (GDP) growth for the period of October-December came in at 7.0 percent, a little slower than 7.4 percent in the previous quarter, but much faster than the 6.4 percent expansion forecast by economists in a Reuters poll.
"Perhaps this data is not capturing the impact of demonetisation," said Aneesh Srivastava, chief investment officer, IDBI Federal Life Insurance Co. "I am totally surprised and stunned to see this number."
PM Modi had received flak for his shock monetary therapy to outlaw old 500 rupee and 1,000 rupee banknotes, from political opponents as well as prominent economists such as Amartya Sen and Paul Krugman.
"The numbers completely negate the kind of negative projections and speculations which were made about the impact of demonetisation," Economic Affairs Secretary Shaktikanta Das said after the data release.
"With inflation pressures also building, we think that the RBI could begin hiking rates over the next 12-18 months," analysts at Capital Economics wrote in a note.
"There are widespread doubts about the accuracy of the national accounts numbers," analysts at Capital Economics wrote. "The unexpected strength of today's data will do nothing to allay these concerns."
By Premji
