India: New GDP series challenges growth narrative – Societe Generale

Societe Generale’s Kunal Kundu argues that India’s new GDP series points to weaker historical growth and softer domestic demand than previously reported. The revision suggests earlier real GDP and consumption were significantly overstated, aligning better with high-frequency indicators and labour market surveys. The analysis highlights structural constraints, household balance-sheet stress and limited benefits from the September 2025 GST rate cut for overall demand.

New data expose overstated Indian growth

"The revised data indicate that real GDP growth was over‑stated by ~2 percentage points, an unheard‑of magnitude for a national account’s revision."

"India’s newly launched GDP series indicated a lower activity level and more modest earlier growth."

"We have for long been arguing that cyclical recovery of the economy from the pandemic low has hit a barrier imposed by the structural limits to growth."

"The new series revealed an unprecedented trend of negative manufacturing sector deflator for the intervening periods (especially during the period when inflation was raging), underscoring persistently weak domestic demand conditions."

"Unsurprisingly, the data now shows that the old series consistently overestimated domestic demand."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)