India – Can economic data be trusted?

Economists and investors say they are finding it increasingly hard. “Market participants are not able to decide what to make of this data,” said Brinda Jagirdar, economist at the State Bank of India.

Frequent and sharp revisions in inflation and factory output data—key determinants of monetary policy—have confounded experts in recent months.

On Monday, India’s inflation for April was revised upwards to 7.5% from 7.23%. And last week, the government revised India’s industrial production data for April to show a contraction of 0.9% versus a growth of 0.1% as stated previously.

Government estimates missed their expectations by a shockingly large margin for January’s factory output growth.

While initial estimates expected it to grow 6.89% from a year earlier, this was later revised down to 1.1%. Officials blamed this on incorrect sugar output data.

Getting data estimates wrong matters as it can have sweeping repercussions on policy making…

via India’s Economic Data Losing Credibility – India Real Time – WSJ.