India Defies Oil Shock with Surprise GDP Growth

India's economy defied expectations and grew at an impressive 7.8% in the first quarter, beating forecasts and sparking controversy over its credibility.

The growth was attributed to a cyclical recovery driven by fiscal stimulus, including direct tax cuts and interest rate reductions, as well as a strong acceleration in exports and a surge in private corporate investments.

Economists praised the government's efforts to diversify energy imports and protect its economy from the Middle East oil shock. Sajjid Chinoy, chief India economist at JP Morgan, said the government deserves 'enormous credit' for insulating the recovery from external events.

However, not everyone is convinced of the numbers' credibility. Opposition leaders called them 'statistical gymnastics', and a former finance secretary raised doubts about the GDP calculation methodology. The World Bank's executive director for India, Neelkanth Mishra, defended the new GDP series, saying it 'cleaned up the data and also significantly improved the methodology'.