Has the economy indeed bounced off a bottom? The answer seems to entirely depend on your measuring rod
Has the economy turned the corner? That’s the big question the gross domestic product (GDP) numbers were supposed to answer. Has it indeed bounced off a bottom? At first glance, the answer to that question seems to entirely depend on your measuring rod. For instance, if we take the quarterly estimates of GDP at 2004-05 market prices from the expenditure side, we find real GDP growth was 3.4% in the June quarter, 2.5% in the September quarter, 4.1% in the December quarter, and 3% in the March quarter. By that yardstick, the economy hit a bottom in the September quarter of 2012-13, bounced back in the next, and then fell back again in the March quarter. The rather dubious consolation is that this yardstick is well known to be dodgy and the credibility of the expenditure-side GDP figures is rather low.