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India Says Its Economy Will Grow 7.4%, But Economists Can't Figure Out Why

The uncertainty surrounding the data makes it unclear how much room Rajan has to lower interest rates as Prime Minister Narendra Modi’s government prepares to reveal its first full-year budget on Feb. 28.

The uncertainty surrounding the data makes it unclear how much room Rajan has to lower interest rates as Prime Minister Narendra Modi’s government prepares to reveal its first full-year budget on Feb. 28.

Photographer: Dhiraj Singh/Bloomberg
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India forecast its growth will accelerate this fiscal year under a revised method for calculating gross domestic product that has confused economists since it was unveiled 12 days ago.

The economy will grow 7.4 percent in the year through March 31, aided by a 7.5 percent increase in October-December, the Statistics Ministry said in New Delhi on Monday. Last month it revised the previous year’s expansion to 6.9 percent from 4.7 percent, prompting economists including Reserve Bank of India Governor Raghuram Rajan to question the growth surge.