An estimate, not a verdict

New Delhi these days is consumed by a number. India's Statistics Ministry puts first-quarter real GDP growth at 7.8%, and the reaction has been extraordinary.

Indian Prime Minister Narendra Modi declared it proof of the nation's collective strength and accused critics of manufacturing despair; the Opposition countered that the figure was bloated by a base-year revision, and that, measured against the old series, growth would have come in closer to 2.6%. Economists and party spokesmen are now arguing past one another over a decimal point most could not correctly define under questioning.

In the home side of the Palk Strait, 2Q GDP results are expected this month, and one hopes Sri Lankan policymakers and experts are not watching the theatrics in India with watering mouths and dreaming up smart arguments. Spare us such theatre!

Our GDP growth has been unremarkable enough to escape fractious politicisation: 4.9% in 2Q 2025, roughly 5.4% in 3Q, 4.8% in 4Q, and 5.1% in 1Q 2026, a steady, boring recovery from the 2022 default. That quiet may not survive 2Q 2026, when growth is expected to have slowed sharply on the energy price shock from the Iran conflict and the closure of the country's sole oil refinery. When that number lands, Colombo will face a choice: re-litigate it, or read it for what it is.

It is worth being precise about what the number represents, because both camps in Delhi are arguing about something never designed to bear the weight either side is putting on it.

GDP is not observed; it is constructed. Statistical agencies build it three ways, summing value added across sectors, expenditure by households, firms and Government, and incomes earned, then reconcile figures assembled from imperfect source data: tax filings, customs records, industrial surveys, and frameworks set by the UN's System of National Accounts and, for quarterly estimates, the International Monetary Fund's (IMF) Quarterly National Accounts Manual.

Early estimates are provisional and get revised, sometimes materially, as fuller data arrive. A base-year update is routine, internationally standard housekeeping, not a lever pulled to manufacture a headline.

That does not mean the number cannot be selectively presented or timed for political effect; it means it is far harder to simply invent than the shouting suggests.

Outright fabrication would require coordinating tax authorities, Customs data, electricity records, corporate filings and independent surveys simultaneously, a problem larger than any ministry can quietly solve.

The institutions that treat GDP as indispensable are narrower than the debate implies, and least inclined to treat it as gospel.

Central banks use it, alongside inflation and output-gap estimates, as one input into a rate decision, not the decision itself. The IMF and rating agencies use debt-to-GDP ratios to assess solvency, but apply their own adjustments and stress tests precisely because they know the denominator is an estimate, not a fixed fact. Bond markets price sovereign risk off GDP-linked metrics, but sophisticated investors triangulate against higher-frequency proxies, electricity generation, port throughput, and tax receipts, because a quarterly print arrives with a lag and a margin of error attached. None takes the headline as final; each treats it as one imperfect signal among several.

This is the standard Sri Lanka's own discourse would do well to hold itself to when harder quarters arrive. The country's structural challenges, a debt burden still being worked through under an IMF program, a narrow export base, dependence on imported energy, and a tax system still rebuilding its administration capacity to keep up revenue are already legible, regardless of whether next quarter's print reads 3.8% or 4.8%.

Litigating GDP, as India is now doing with great sound and fury, would resolve none of them. It would simply substitute an abstraction for the argument that actually matters.