A day after cutting the country’s growth forecast to an abysmally low 3.8 per cent in FY’14, the International Monetary Fund (IMF) today clarified that the projection was based on market price and not on factor cost which is being used by the government and analysts here.

“For India, we wish to clarify the basis on which our forecasts are produced. To be comparable across countries, the IMF's world economic outlook projections are done at market price, which differs somewhat from the factor cost definition used by the government and most analysts, ’’ it said.

The IMF had yesterday projected the domestic economic growth at 3.8 per cent in FY’14 against 5.6 per cent forecast in July.

It said that the GDP growth estimates at market price equals the factor cost estimates, minus subsidies but including indirect taxes.

In the first quarter of FY’14, real GDP growth estimated by the Central Statistics Office stood at 4.4 per cent on a factor cost basis and at 2.4 per cent on a market price basis, the IMF said.

“In India, factor cost GDP generally provides a more accurate picture of economic developments,” it added.

According to the IMF, GDP growth at factor cost in FY’14 will be 4.3 per cent, while growth at market price will be 3.8 per cent.

(This article was published on October 10, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.