India outpaces China as 1Q GDP rises 7.5%
Data released on Friday showed that first-quarter gross domestic product in India grew by 7.5% from a year ago, beating expectations for a 7.3% increase and unchanged from the previous quarter.
These latest GDP figures show India growing faster than China for a third consecutive quarter, with China’s GDP up 7% in the first quarter.
Particular attention is being paid to the numbers after the International Monetary Fund published a report earlier this year in which it predicted that India will become the world’s fastest-growing major economy by next year.
"Overall, today’s data depict an economy that is recovering, but at a very gradual pace," said Nomura. "We expect the cyclical sectors to show a gradual recovery in the coming quarters owing to higher disposable income, easier financial conditions, rising profit margins and continued momentum on project clearances.
Nomura expects growth to pick up to 8% year-on-year in full-year 2016 from 7.3% in full-year 2015.
However, there are doubts over whether a new way of calculating gross domestic product, introduced by the government earlier this year, has distorted the real picture.
In January, the Indian government said that its benchmark measure of economic growth going forward would be based on market prices, not on factor costs, to take into account gross value addition in goods and services as well as indirect taxes.
The government’s statistics department said the new method is more in line with global practices.