High April-June GDP Growth (7.8%)
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Reason for high growth:
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Very low WPI inflation (<0.3%) → soft GDP deflator → boosted real GDP numbers.
Nominal GDP growth was only 8.8% (lowest in 3 quarters), but low deflator made real growth appear stronger.
Deflator issue:
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MoSPI uses single deflation for many sectors (especially manufacturing). Single deflator means same deflator for both input and output.
When prices fall → growth looks exaggerated; when prices rise → growth looks understated.
Implication:
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Current high growth may not fully reflect real economic activity.
Future trend:
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With WPI inflation in negative territory, July–Sept GDP may also appear overstated.
Suggestions:
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Use of double deflators for all sectors of economy.
