India’s economy grows 7.5% in Jan-March, Brazil contracts 0.2%
May 29, 2015, 1:14 pm

Workers make bicycle parts at a factory at Ludhina in Indian state of Punjab, Feb. 1, 2014 [Xinhua]

New data unveiled by Brazil’s  national statistics agency IBGE, in Rio de Janeiro, says gross domestic product contracted 0.2 per cent in the first three months of the year from the previous quarter. This was a better show than the the 0.5 per cent contraction predicted by most economists.

Earlier on Wednesday, the Brazilian Congress approved three key bills pushed by President Dilma Rousseff to cut spending and raise taxes. The government claims this could save the state exchequer an estimated 15.7 billion reais ($4.9 billion) a year.

The Rousseff administration is trying to regain investor confidence even as it battles with the fastest inflation in more than a decade. The president is trying to push through unpopular measures like spending cuts and tax increases at a time when public patience with officials is at an all-time low, thanks largely to an ongoing corruption scandal at state oil giant Petrobras.

Meanwhile, the Indian Statistics office in New Delhi on Friday also published data that said India’s gross domestic product grew by 7.5 per cent in the fiscal fourth quarter, beating estimates. The latest figures show India is growing faster than China, the result of a new method of calculating GDP. The Chinese economy grew by 7 per cent in the March quarter.

The Indian statistics department has started measuring the gross domestic product by including indirect taxes.

Many commentators and economists, including the government’s Chief Economic Advisor Arvind Subramanian, however, have warned against rushing in to use the new numbers to craft policy.

“I am puzzled by the new GDP growth numbers. The revised numbers show GDP growth rose from 4.7 per cent to 5.1 per cent for 2012-13 and from five per cent to 6.9 per cent for 2013-14. This means acceleration in GDP growth of 1.9 percentage points in 2013-14, just by comparing the new numbers across time. This is mystifying because these numbers, especially the acceleration in 2013-14, are at odds with other features of the macro economy,” Subramaniam said in a recent interview to Indian daily, the Business Standard.

TBP