GDP data for Q3 2023–24: The mystery of a robust growth

Recently released GDP figures have sprung a surprise, baffled experts and overturned the government’s own data and projections. What could be the reason

GROSS Domestic Product (GDP) figures have sprung a surprise— showing a growth of 8.4 percent in Quarter 3 of 2023–24, on top of the previous two quarter’s growth of 8.2 percent and 8.1 percent.

The annual growth for 2023–24 is projected at 7.6 percent. But given the growth rates in the first three quarters, it is likely to be above 8 percent, unless the economy decelerates sharply in Q4, of which there is little sign.

The surprise

Experts are embarrassed that how could they be so far off. In December 2023, the Reserve Bank of India (RBI) had upped its projected growth rate from 6.5 percent to 7 percent.

Various foreign credit rating agencies had revised the expected growth rate to only around 6.5 percent. The International Monetary Fund (IMF) expected a 6.3 percent rate of growth.

Arun Kumar

Professor Arun Kumar, Distinguished Fellow at TPF, is the Malcolm Adisheshiah Chair Professor at the Institute of Social Sciences, New Delhi and was formerly professor of economics at Jawaharlal Nehru University from 1984 to 2015. He has an MA (Physics) from Princeton University, USA and PhD (Economics) from JNU. His recent book (published in Dec 2020), Indian Economy's Greatest Crisis:Impact of The Corona Virus and The road Ahead, has generated great interest and discussion.