GDP: The base matters but it is not the only thing that matters

Economic recovery is taking place: you can argue over its pace but denying it altogether is being wilfully blind.

Most of those who are either cheering or jeering at the recently released Q1 GDP data are missing the point. Most of them are economists.

Those who are cheering it are doing so because 20.1 percent sounds like a big, impressive number for GDP growth. Those who are pooh-poohing it are doing so because they say the high growth rate is due to the ‘base effect’. 

Both views are correct. But they are also mostly irrelevant because a high growth rate in itself doesn’t say much unless you know what the state of the economy was before. 

And those who