India’s economy grew by 7.9% year-over-year in the first quarter of 2016, according to the Statistics Ministry.
That’s an increase from the fourth quarter’s 7.2% yoy print.
And it’s above economists’ expectations of 7.5% growth, according to the Bloomberg consensus.
“There is some evidence that India’s economy has picked up speed recently but today’s remarkably strong GDP data are hard to believe,” wrote Capital Economics’ India Economist Shilan Shah in a note to clients.
“The short point is that — as we have cautioned since the release of the revised GDP series last year — we should take the official GDP data, and the world-beating rates of growth they are suggesting, with a pinch of salt.”
Shah notes that while there have been some recently signs of growth — including strong auto sales and cargo volumes — overall, India’s data does not exactly add up.
He points out that Tuesday’s data showed that manufacturing grew by 9.3% yoy last quarter, but monthly data on industrial production show output rose by only 0.2% yoy in Q1. Moreover, growth in bank lending is near its slowest rate in a decade.
Plus, Bloomberg’s Vrishti Beniwal noted that “capacity utilization is low and private investment is weak.”
In short, “these figures are hard to align with other evidence on the economy’s health,” Shah added.