IMF Backs Centre Amid 7.8% GDP Growth Row, Says India's Method 'Consistent With International Standards'

India GDP Growth Row: Weeks after India's GDP numbers faced questions over whether the country's economic growth is as strong as the headline figures suggest, the International Monetary Fund (IMF) has backed the government's revised method of calculating gross domestic product (GDP). The IMF called the changes "consistent with international best practises".The IMF's latest comments come amid a debate over India's 7.8 per cent economic growth in the April-June quarter of the financial year 2026-27. As the growth figure was higher than estimates, it triggered questions about how the government calculates GDP growth and revises past estimates.Krishna Srinivasan, Director of the IMF's Asia and Pacific Department, said India's updated GDP methodology was consistent with the advice provided by the Fund's statistics department. "These revisions to the methodology are entirely consistent with the advice we've been giving them, including from our statistics department," Srinivasan said.Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better PayHe described the revision of India's GDP base year as a "welcome development". He also acknowledged the work done by the Ministry of Statistics and Programme Implementation (MoSPI) to improve the country's economic statistics, while noting that there was still room for improvement.Why Has IMF Backed India's New GDP Method?India released an updated series of annual and quarterly GDP estimates in 2026, shifting the base year from 2011-12 to 2022-23. The base year is the reference point used to calculate changes in the economy over time. It is revised periodically to reflect changes in economic activity, consumption patterns and the structure of different industries.A revision can also bring in newer data sources and improved methods of measuring output. The aim is to provide a more accurate picture of the economy. India's updated GDP series incorporates changes to the way economic activity is measured, including the use of newer price indices and a revised approach to calculating manufacturing output."One important change is the use of double deflation for manufacturing. Under this method, changes in the prices of a company's output and the goods and services it uses as inputs are measured separately. This helps estimate the actual change in production after accounting for price movements," Professor Abhinav Tripathi, a senior economist, told NDTV.The IMF has supported these statistical improvements. Its endorsement indicates that the broad approach is consistent with internationally accepted practices. However, it does not mean that every estimate is beyond scrutiny or that the methodology cannot be improved further.Why India's 7.8% GDP Growth Figure Triggered A RowThe debate intensified after India reported real GDP growth of 7.8 per cent in the April-June quarter of FY27. The figure beat market expectations and came in above the Reserve Bank of India's earlier projection of 7 per cent.Former Finance Secretary SC Garg questioned the reported growth rate. He argued that a downward revision to the GDP estimates for the corresponding period of the previous year had made the latest growth figure appear stronger.GDP growth is calculated by comparing the economy's output in one period with that in the corresponding period a year earlier. If the estimate for the previous year changes, the resulting growth rate can also change. Garg's concerns centred on whether revisions to earlier numbers had materially influenced the latest growth figure. The issue prompted a wider debate over the reliability and interpretation of India's economic data.However, Chief Economic Adviser V Anantha Nageswaran criticised Garg's approach as "cherry-picking" data. The government has maintained that the changes reflect the revised methodology and updated information rather than an attempt to artificially raise growth. Meanwhile, the Centre also explained that the revised series includes changes to the calculation of manufacturing output and the price measures used in estimating economic activity.The IMF's latest remarks add weight to the government's case for updating the statistical framework. But support for the methodology and questions about the interpretation of a particular growth figure are two separate issues.What Does The IMF Say About India's Economic Growth?The IMF has also pointed to the resilience of India's economy despite the global energy price shock. The Fund said India's 7.8 per cent growth in the June quarter exceeded its own staff expectations and the consensus among other observers. Stronger-than-expected activity in services and exports contributed to the upside surprise."For India, higher energy prices can create several economic challenges," says Professor Tripathi. Notably, the country imports a large share of its crude oil requirements. A rise in international oil prices can increase the import bill, put pressure on the rupee and affect inflation.IMF's Srinivasan said India entered the energy shock with relatively strong economic fundamentals and had responded well to the challenge. He also cautioned against interpreting pressure on the rupee as evidence that economic growth and currency movements were fundamentally disconnected.Exchange rates are influenced by several factors, including global interest rates, investor appetite for risk and oil prices. Currency weakness alone does not establish that a country's GDP growth figures are unreliable.