{"id":607188,"date":"2025-12-02T10:35:20","date_gmt":"2025-12-02T10:35:20","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/607188\/"},"modified":"2025-12-02T10:35:20","modified_gmt":"2025-12-02T10:35:20","slug":"nominal-gdp-slowdown-rings-alarm-despite-strong-8-2-real-growth-careedges-rajani-sinha","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/607188\/","title":{"rendered":"Nominal GDP slowdown rings alarm despite strong 8.2% real growth: CareEdge\u2019s Rajani Sinha"},"content":{"rendered":"

India\u2019s headline GDP growth surged to 8.2%, far above expectations, but the celebration is tempered by the sharp drop in nominal GDP to 8.7%, raising concerns about pricing power, corporate revenues, and government finances, according to Rajani Sinha, Chief Economist, CareEdge Group.<\/p>\n

Sinha told ET Now that while real GDP is impressive, nominal GDP is a more direct indicator of corporate pricing strength and tax revenue potential. \u201cNominal GDP being so low is concerning because it reflects very weak inflation. Pricing power is low and this will show up in corporate revenues\u2014especially for smaller firms,\u201d she said.<\/p>\n

Low inflation could hit government revenues
With CPI inflation<\/a> at 0.25% and WPI in negative territory, India\u2019s benign inflation environment is starting to weigh on fiscal math.
\u201cTax collections\u2014both direct and indirect\u2014are already below budgeted levels. Without the RBI dividend windfall, government finances would be under stress,\u201d Sinha added. A slower nominal GDP also mechanically pushes the fiscal deficit ratio higher.IMF\u2019s data critique valid, upgraded GDP methodology coming
Responding to the IMF\u2019s concerns about outdated metrics and the lack of seasonally adjusted data, Sinha said the issues are real and already under review.\"ETLive EventsIndia still uses a 2011\u201312 GDP base year, despite major shifts in the economy. The revised methodology using a 2022\u201323 base is expected next year, with greater inclusion of digital datasets, new surveys, and better tracking of the unorganised sector.
\u201cMoSPI is actively updating the methodology\u2014coverage, data sources, and deflation techniques will all be upgraded. The new GDP series should be more robust,\u201d Sinha said.US tariff impact to show up more clearly in October data
With the additional US tariffs kicking in at the end of August, Sinha said the Q2 GDP print only captures one month of impact, and even that was masked by heavy front-loading of exports.
\u201cExporters and global buyers pre-stocked before tariffs began. That boosted Q2 numbers artificially,\u201d she noted.<\/p>\n

While exports to the US have contracted, rerouting via other markets has softened the blow, at least so far.<\/p>\n

RBI rate-cut decision: \u201cA very difficult call\u201d
With RBI\u2019s December 5 policy meeting around the corner, Sinha expects a tough balancing act:<\/p>\n

Growth is high<\/p>\n

Inflation is extremely low<\/p>\n

Global uncertainty persists<\/p>\n

Despite the strong GDP print, Sinha believes there is still room for a 25 bps rate cut.<\/p>\n

\u201cRBI may use this window of low inflation to deliver a shallow cut, anticipating growth moderation in the second half,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"India\u2019s headline GDP growth surged to 8.2%, far above expectations, but the celebration is tempered by the sharp…\n","protected":false},"author":2,"featured_media":607189,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,190090,15291,1700,190092,190088,58855,190087,190085,190089,190091,190086,16,15],"class_list":{"0":"post-607188","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-corporate-pricing-power","10":"tag-cpi-inflation","11":"tag-economy","12":"tag-export-tariffs-impact","13":"tag-imf-gdp-methodology","14":"tag-india-gdp-growth","15":"tag-inflation-impact-on-government-revenue","16":"tag-nominal-gdp-slowdown","17":"tag-rajani-sinha-careedge","18":"tag-rbi-rate-cut-decision","19":"tag-real-gdp-growth","20":"tag-uk","21":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115649533398845886","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/607188","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=607188"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/607188\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/607189"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=607188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=607188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=607188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}