Many accuse China of serving bunk government statistics, even though the World Bank and most of academia think they are OK.
Yet the real questionable player is India. India’s government barely has the proper data collection to even know what’s going on in their economy, plus the nation is simply subject to the random whims of the weather due to its high dependence on agriculture.
Even in India the spring harvest should help quell wholesale-price inflation. But these prices are a poor guide for India’s monetary policy. They tell the central bank a lot about forces it cannot control, such as the monsoon and the global commodity markets. But they tell it little about the things it can hope to influence, such as domestic demand. The RBI, according to Mr Prior-Wandesforde, is “flying blind most of the time”.
In its statement, for example, the central bank cited increasing capacity utilisation as an inflationary threat. By one measure, prepared by the National Council of Applied Economic Research in Delhi, capacity utilisation has returned to its pre-crisis peaks. But India lacks a robust measure of core inflation, or comprehensive measures of employment and wage pressures. Inflation watchers must instead take their cues from surveys, casual observation and telling anecdotes—as well as the weight of money garlanding politicians’ necks.
Which makes China’s economy look like the most transaprent in the world.
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