RisingShiningSuperpower
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The Western media is actively undermining and insulting India's achievements. They fear India's rise as a superpower under Modi-ji's brilliant leadership. India's GDP numbers are calculated using the most advanced Vedic statistical methods, which are far superior to Western equivalents. Modi-ji is applying ancient Vedic wisdom and Vedic knowledge to all fields of development. I have no doubt that India will quickly surpass China and America to become a superpower by 2020!
5 Charts That Show India Might Be Overstating Its Growth - WSJ
When India announced its latest gross domestic product data late Monday, it took many economists by surprise.
The numbers showed GDP growth blazing ahead of other large economies at a rate of 7.3% in the three months through December. The government said it expects it to rise to 7.6% in the year through March.
However, economists say growth is nowhere near as strong as the data suggest and that other performance indicators show the economy is still struggling to gain momentum.
The government made some major changes in the way it measures GDP in January last year, which resulted in a bump in growth rates and presented a much rosier economic picture.
Here are five charts that suggest the GDP numbers could be overstating the strength of the recovery in Asia’s third-largest economy:
1. Indian Exports Aren't Strong
India’s exports, which make up about a quarter of its GDP, fell for 13 straight months until December. With the outlook for global commodity prices–particularly crude oil, India’s largest import–looking subdued and demand in other parts of the world expected to stay tepid, it won’t be a surprise if India’s exports continue to remain weak.
2. Manufacturing Is Weaker Than the Numbers Indicate
A major driver of India’s growth last quarter was manufacturing. The GDP data showed a 12.6% year-over-year expansion in the sector’s output. But is it really doing that well? Some economists don’t believe so. The growth is “unrealistically strong,” and reflects no impact of floods that hit Chennai–an auto-manufacturing hub in southern India–late last year, Anjali Verma, an economist at PhillipCapital, said in research note. Ms. Verma said that industrial production, core sector growth and PMI were all weak for the November to October period. The chart above shows performance of the manufacturing sector is much weaker than the GDP numbers indicate.
3. Factories Aren’t Using All Their Capacity
One way of gauging how strong demand is in an economy is to analyze the production capacity factories are utilizing. High utilization indicates production is at full strength to meet high demand, while a low utilization generally points to insufficient demand. A recent survey of manufacturing companies by the Reserve Bank of India shows capacity utilization fell in the three months ended Sept. 30 to 70.6%, from 76% in the first quarter of 2014 and 78% the year before.
4. New Orders Look Weak
New orders have also been weak in recent quarters, the central bank’s most-recent survey for the three months through September shows. If corporates aren’t winning new business, it isn’t clear what is spurring the reported strong growth in manufacturing.
5. Corporate Earnings Aren’t Great
The average profit after tax at the 30 companies on the country’s benchmark S&P BSE Sensex index fell 2% in the three months ended Sept. 30, according to brokerage Motilal Oswal. Earnings for the December quarter are currently being reported, and they aren’t looking much better. Sectors such as banking, metal and infrastructure have reported weak results as a rise in bad loans, declining global commodity prices and slowing global demand hurt. The Sensex has fallen 8% so far in 2016.
5 Charts That Show India Might Be Overstating Its Growth - WSJ
When India announced its latest gross domestic product data late Monday, it took many economists by surprise.
The numbers showed GDP growth blazing ahead of other large economies at a rate of 7.3% in the three months through December. The government said it expects it to rise to 7.6% in the year through March.
However, economists say growth is nowhere near as strong as the data suggest and that other performance indicators show the economy is still struggling to gain momentum.
The government made some major changes in the way it measures GDP in January last year, which resulted in a bump in growth rates and presented a much rosier economic picture.
Here are five charts that suggest the GDP numbers could be overstating the strength of the recovery in Asia’s third-largest economy:
1. Indian Exports Aren't Strong
India’s exports, which make up about a quarter of its GDP, fell for 13 straight months until December. With the outlook for global commodity prices–particularly crude oil, India’s largest import–looking subdued and demand in other parts of the world expected to stay tepid, it won’t be a surprise if India’s exports continue to remain weak.
2. Manufacturing Is Weaker Than the Numbers Indicate
A major driver of India’s growth last quarter was manufacturing. The GDP data showed a 12.6% year-over-year expansion in the sector’s output. But is it really doing that well? Some economists don’t believe so. The growth is “unrealistically strong,” and reflects no impact of floods that hit Chennai–an auto-manufacturing hub in southern India–late last year, Anjali Verma, an economist at PhillipCapital, said in research note. Ms. Verma said that industrial production, core sector growth and PMI were all weak for the November to October period. The chart above shows performance of the manufacturing sector is much weaker than the GDP numbers indicate.
3. Factories Aren’t Using All Their Capacity
One way of gauging how strong demand is in an economy is to analyze the production capacity factories are utilizing. High utilization indicates production is at full strength to meet high demand, while a low utilization generally points to insufficient demand. A recent survey of manufacturing companies by the Reserve Bank of India shows capacity utilization fell in the three months ended Sept. 30 to 70.6%, from 76% in the first quarter of 2014 and 78% the year before.
4. New Orders Look Weak
New orders have also been weak in recent quarters, the central bank’s most-recent survey for the three months through September shows. If corporates aren’t winning new business, it isn’t clear what is spurring the reported strong growth in manufacturing.
5. Corporate Earnings Aren’t Great
The average profit after tax at the 30 companies on the country’s benchmark S&P BSE Sensex index fell 2% in the three months ended Sept. 30, according to brokerage Motilal Oswal. Earnings for the December quarter are currently being reported, and they aren’t looking much better. Sectors such as banking, metal and infrastructure have reported weak results as a rise in bad loans, declining global commodity prices and slowing global demand hurt. The Sensex has fallen 8% so far in 2016.
