GDP Figures Research Articles

World Economic Prospects Monthly

Overview: Q3 rebound will quickly fade ▀ Latest GDP figures confirm what has long been known – the global economy shrank at an unprecedented pace in Q2. While the gradual re‐opening of economies over recent months should generate a substantial growth bounce in Q3, the expansion will tail off markedly thereafter. ▀ The quarterly falls in US and eurozone GDP – of 9.5% and 12.1% respectively in Q2 – were markedly larger than the cumulative declines recorded during the global financial crisis and were on a par with China's own lockdown‐driven plunge in activity in Q1. Factoring in the latest GDP and other activity data, we now estimate that the global economy shrank by around 9% in H1 this year. ▀ Industrial production and retail sales data from around the world confirm that global growth began to rebound in the latter stages of Q2 and in July on the back of post‐lockdown re‐opening. But detailed data from various economies show that the scale of the expansion is uneven across sectors and that the retail sales and industrial data overstate the degree to which wider economies have grown. ▀ Even so, the scale of the global GDP expansion in Q3 is set to be impressive by any normal standards and we expect most of the sharp fall seen in Q2 to be reversed. Thereafter, though, the pace of growth will slow markedly. By the end of Q3, the sharp initial burst of activity from re‐opening will have waned and the effect of this will be exacerbated by factors such as some emergency support measures being phased out and many firms restructuring their workforces. ▀ Our baseline assumes that a major worldwide second wave of Covid‐19 is avoided, but the pace of growth in late‐2020 and 2021 could clearly be further undermined by the need for widespread resumption of lockdown restrictions as the northern hemisphere moves into winter. Overall, our world GDP growth forecasts for 2020 and 2021 are little changed from a month ago at −4.4% and +5.8% respectively.

Italy grapples with its public debt: A dog chasing its tail

ABSTRACTThe article reviews Italy’s fiscal policy over 2019-2020. Notwithstanding the fact that two different coalitions have been responsible for the budget law over the period and conducted two alternative fiscal strategies, they have both failed to tackle the public-debt problem. They have done so not only in practice with debt to GDP figures showing no significant progress, but also in the political narrative paying little attention to the need to reduce the debt burden weighing on future generations. Looking ahead, the repeated breach of EU debt rules poses a challenge that is both domestic and international, unless EU rules are significantly reformed.

The Shared Economy in the Current Market

This paper presents the characteristics of the shared economy phenomenon. The theoretical part focuses on the activities of the shared economy in the current international market environment. We describe the categorization of shared economy activities across platforms. We devote ourselves to measuring a shared economy because it also generates many values that are not fully captured in GDP data. The global value of the shared economy is only an estimate. We also deal with threats to the shared economy as these can also be seen as a growing network of unregulated digital markets. These pose a threat to regulated businesses and to consumers. Shared economic platforms are different in national economies. They are highly criticized in some economies because they create unfair competition conditions. They create illegal, black or gray markets or support, for example, tax avoidance. The shared economy also generates many values that are not fully captured in GDP figures. The research part of the paper consists of an UBER analysis in selected countries. At present, UBER is one of the most widespread structures of the shared economy compared to classic taxis. The analysis offers a comparison of the UBER platform, which can bring a new perspective on shared economy issues. The selected indicators are country-specific and collected for two periods: before the UBER come to country and after that.

Трудовые мигранты из стран СНГ в России: масштабы, аспекты, проблемы

The decline of the role of a national state after World War II, which went against the conservative idea, inseparable from the awareness of national interests and the right of citizens to control the size and composition of the population of their own country, influenced approaches to the problem of migration. The movement of migrant flows from the CIS countries to the Russian Federation fits into the objective migration process taking place in the world, which is characterized by movement from the periphery to the center. Russia continues to be the center and attracts residents of the periphery of the once unified state, its per capita GDP figures continuing to differ favorably from those recorded in the former Soviet republics. The process inevitably leads to problems of adaptation of migrants in a receiving country. The article examines the evolution of attitude towards the problem of inclusion of migrants into society of the host countries from the so-called “melting pot”, meaning their complete assimilation, to transnationalism that allows people to have two or more cultural identities and be involved in multiple social contexts. The economic motivation of employers preferring to hire immigrants from the CIS countries, who are more “competitive” in comparison with domestic specialists claiming decent working conditions and pay, often prevails.

Estimating Quarterly GDP for Nepal: An Application of Chow-Lin Procedure

Nepal started producing annual national income estimates following an internationally accepted system of 'National Account Systems' since the late1960s; and, accordingly, the annual GDP figures for Nepal are available for a longer period. However, the production and publication of quarterly GDP for public consumption have been both rare and occasional. This paper aims to bridge this gap by providing an estimate for quarterly GDP for the period of 1997/98 Q1 to 2017/18 Q4 following well established Chow-Lin procedure. The quarterly exports and government tax revenue are used to extrapolate the magnitude and movement of quarterly GDP. The results show a deterministic seasonal movement over the quarters. In particular, increased economic activities are observed in the second and fourth quarters while making a comparison on quarter to quarter basis. It is expected that this paper will partially fulfill the gap of unavailability of quarterly GDP figures in the public domain, and documents that the researcher may use suitable econometric exercise to obtain inter-temporal disaggregation of low-frequency data such as annual GDP into quarterly figures.

Is China Fudging Its GDP Figures? Evidence from Trading Partner Data

Is China Fudging Its GDP Figures? Evidence from Trading Partner Data

The Influence of GDP on Rental Growth of Residential Properties in Ede, Nigeria

Changes in rental values may occur in response to changes in economic conditions at all levels of an economy. Against the backdrop of recent unstable GDP growth rates in Nigeria, this study evaluated the influence of GDP on rental growth rates of residential properties in Ede, Nigeria with a view to providing information that will aid better understanding of the dynamics of residential property market for investment decisions. It analyzed the magnitude of growth in rental values of five residential property types comprising tenement room, one room self-contained, room and parlour self-contained, two bedroom flat and three bedroom flat to determine whether significant difference exist in the growth rates across the five property types; the extent of variation in the rental values of the properties types in Ede caused by GDP growth; and also, the relationship between GDP growth rates and rental growth rates of residential properties in the study area. The study utilized both primary and secondary data. Primary data used for the study was collected through structured questionnaire administered on landlords who rented their properties within the study period and comprised rental values of five residential property types between 2002 and 2017. Secondary data for the study comprised Nigeria’s GDP figures between 2002 and 2017. Descriptive and inferential statistical techniques such as frequency table, chart, ANOVA and linear regression were used to analyse the data. The results revealed a mean yearly growth rates of 17.03%, 17.01%, 16.57%, 19.86% and 20.83% for tenement room, one room self-contained, room and parlour self-contained, two bedroom flat and three bedroom flat respectively; and the mean rental growth rates across the selected residential property types at 95% confidence level are not significantly different F (4, 70) = 0.345 P = .847 > .05. Furthermore, during the period under study, GDP values were found to have a strong positive relationship with rental values of residential properties in the study area and accounts for about 73%, 75%, 82%, 76% and 83% of variation in rental values of tenement room, one room self-contained, room and parlour self-contained, two bedroom flat and three bedroom flat respectively. The study however found no statistically significant relationship between GDP growth rates and rental growth rates of residential properties in the study area. Consequently, the study concluded that GDP growth rates do not have significant influence on rental growth rates of selected residential properties in Ede during period understudied.

The impact of infrastructure development on economic growth in sub-Saharan Africa with special focus on Ghana

PurposeThis paper aims to assess the impact of infrastructure development on Ghana’s economic growth.Design/methodology/approachUsing data obtained from the World Bank’s World Development Indicators, the United States’ (US) International Energy Statistics and the Central Intelligence Agency’s (CIA) Factbooks from 1980 to 2016, an autoregressive distributed lag (ARDL) framework is used to determine the long- and short-run impact of the selected infrastructure stock and quality indices on Ghana’s economic growth.FindingsFindings indicate a statistically significant relationship between infrastructure development and economic growth. Additionally, electricity-generating capacity is identified as the infrastructure stock index that has the greatest positive impact on Ghana’s economic growth. The study reveals that electricity-distribution loss has a significant negative effect over both long- and short-run periods.Research limitations/implicationsCommercial petroleum export from Ghana since 2010 has been a key contributor to economic growth. Although its aggregate effect is included in the annual GDP figures adopted for the study, the authors would have wished to assess its impact on GDP as an independent standard growth determinant. However, because of a lack of available data over this study period, petroleum exports could not be adopted as an independent standard growth determinant. Additionally, an aggregated index of infrastructure stock and quality could not be derived because of the small size of data available. Hence, this study did not assess its impact on Ghana’s economic growth.Practical implicationsThe research provides pragmatic guidance to policymakers to focus their efforts on expanding electricity-generating capacity while simultaneously taking steps to curb electricity transmission and distribution losses. These two related actions offer the greatest positive impact on infrastructure development and, as a consequence, Ghana’s economic growth.Originality/valueThis paper represents the first attempt to empirically study the relationship between infrastructure development and Ghana’s economic growth. A key contribution to the existing body of knowledge includes strong evidence of a positive effect of infrastructure development upon Ghana’s economic growth. Results also reveal that the greatest positive impact on economic growth is derived from electricity-generation capacity. However, the study also uncovers a negative, but statistically significant, relationship between road and economic growth.

In Search of Fluctuations: Another Look at China’s Incredibly Stable GDP Growth Rates

China’s official real GDP growth has held surprisingly stable in recent years. As national GDP figures influence both policy analysis and political decisions, the GDP growth rate of the Chinese economy has also great international implications. Taking the nominal GDP growth and price index data as given and experimenting with alternative deflators, this paper attempts to track missing fluctuations in real GDP growth in recent years. Real GDP growth in the constructed series decreased in 2015–2016, picked up in 2017, and again decelerated in 2018, in contrast to the rather stable official real GDP growth rates of these years. Furthermore, in recent years the constructed growth rate seems to be well below the official figures.

Global Development, Converging Divergence and Development Studies: A Rejoinder

Global Development, Converging Divergence and Development Studies: A Rejoinder

PMIs: Reliable indicators for exports?

AbstractForeign economic activity is a major determinant of export developments. However, foreign GDP figures are published too late to be useful for short‐term forecasting. This paper presents a number of indicators based on the widely available PMI surveys that provide very early signals of foreign activity. Using MIDAS models we analyze the in‐ and out‐of‐sample performance of these and related indicators for two very trade‐exposed countries (Germany and Switzerland). We find that the monthly indicators based on foreign PMIs are strongly correlated with quarterly export growth. The forecast comparison shows that PMI‐based indicators perform very well relative to other benchmark models.

Political Entrenchment and GDP Misreporting

By examining discrepancies between officially reported GDP growth figures and the actual economic growth implied by satellite-based night time light (NTL) density, we investigate whether democracies manipulate officially reported GDP figures, and if so, whether such manipulation pays political dividends. We find that the over-reporting of growth rates does indeed precede increases in popular support, with around a 1% over-statement associated with a 0.5% increase in voter intentions for the incumbent. These results are robust to allowing the elasticity of official GDP statistics to NTL to be country specific, as well as accounting for the quality of governance, and checks and balances on executive power.

World Economic Prospects Monthly

Overview: A solid 2019, despite the soft end to this year ▀ While the global economy looks set to end this year on a soft note, we still see the expansion regaining some momentum in 2019 and attach only a 5% probability to a global recession next year. Overall, we still see global GDP growth slowing to 2.8% in 2019 from 3.0% (0.1pp lower than last month) in 2018. ▀ The Q3 GDP figures from the advanced economies made fairly dismal reading. Admittedly, US growth only slowed marginally on a quarterly basis, and remains comfortably above potential, but Germany, Japan and Italy, among others, all contracted. Nonetheless, apart from Italy, these contractions appear to be explained by one‐off factors – as a result, we see growth rebounding in Q4, with only Italy entering recession. This is supported by the recent stabilisation of composite PMIs after their slide in Q3. ▀ China has also slowed and a further loss of momentum is likely in the short term as the effects of recent policy loosening take time to filter through to the real economy. Emerging market GDP growth has softened too and the generalised tightening in financial conditions suggests that the slowdown may continue. ▀ But the US and China slowdowns reduce the risk of destabilising imbalances building that would add to medium‐term downside risk. US growth is also likely to remain above trend and thus broadly supportive for the global outlook. A silver lining to US growth moderation may be a weaker US dollar – we expect the euro to rise to $1.20 by end‐2019 – which would, other things being equal, support global trade and should also boost EM growth via financial market and financial balance sheet channels. ▀ Finally, the oil price plunge over recent months may provide a fillip for global growth via lower inflation. We now expect the oil price to rise gently in 2019 to about $65pb by year‐end, well below our previous forecast of $73pb. Not only will this boost households' real incomes, but it may also temper central banks' plans to raise rates.

Getting the Measure of Money: A Critical Assessment of UK Monetary Indicators

The Monetary Policy Committee of the Bank of England’s reliance on faulty indicators has led to suboptimal policy decisions and masked what is actually happening in the economy. The introduction of quantitative easing (QE) in 2009 has made the money supply relevant again and made a discussion about alternative money supply measures of direct policy significance. Unfortunately, Bank of England figures have proved misleading and subject to major alterations. This book argues in favour of measures such as MZM and Divisia money, which attempt to find a middle ground between narrow and broad measures. It introduces a new and publicly available measure, MA, based on an a priori approach to defining money as the generally accepted medium of exchange. Central bankers are right to alter monetary policy in light of changes in the demand for money (i.e. velocity shocks), but they also need to recognise the potential for their own actions to be the cause of such shocks. In particular, central banks are ‘big players’ who can weaken confidence by generating regime uncertainty, and this played a major role in the 2008 financial crisis. While increased attention to uncertainty by economists should be welcomed, we should also be wary of attempts to measure it. From 1999 to 2006 the Consumer Prices Index (CPI) systematically underreported the inflationary pressure in the UK. More attention should be given to indices that include asset prices. GDP figures available at the time understated the severity of the 2008 recession, but also understated the strength of the recovery. GDP is flawed as a measure of well-being, of economic growth and even of economic activity. We get a fuller picture if we include intermediate consumption (or business-to-business spending), which is known as ‘Gross Output’ (GO). GO for the UK is typically two times bigger than GDP and more volatile. Unfortunately, official figures are only published on an annual basis and with a significant lag.

A Study on the Impact of GDP Growth Rate on Fdi Inflows in Present India

Empirical studies uphold GDP growth rate as one of the determinant factors of FDI inflows. United Nations Conference on Trade and Development (UNCTAD) in its World Investment Report 2002 and 2012 identified Real GDP growth and GDP per capita of the host country as crucial factors that attract inward FDI. It is evident that the developed economies having high GDP figures receive the major part of world FDI flows. It is also observed that the countries where the growth rate is comparatively high enjoy good flows of inward FDI. India experienced a smart growth of GDP during the post-liberalized period but the growth has not found any consistency so far. The present study is intended to find whether the sluggish growth trend of Indian economy in the present decade influences the country’s inward FDI flows negatively or not. The study finally finds that the GDP growth rate alone fails to determine the FDI inflows in India in the post-liberalized period.

Short-Term Forecasting Economic Activity in Germany: A Supply and Demand Side System of Bridge Equations

We present a comprehensive disaggregate approach for short-term forecasting economic activity in Germany by explicitly taking into account the supply or production side and the demand side of GDP. The GDP figures calculated by the two sides usually yield different results and the official GDP release is somewhere in between. We make use of this statistical procedure by separately modeling the two sides of GDP in a system of bridge equations at the most disaggregate level available and combining the resulting two aggregate GDP forecasts. Comparing several specification schemes in an out-of-sample forecast evaluation setup, we are able to find informative forecasts for most of the underlying GDP components. We then show first, that both approaches already yield informative aggregate forecasts for forecast horizons of up to 28 weeks and second, that combining the production side and the demand side projections substantially improves the forecast performance, in particular for the shorter forecast horizons.

In Search of Fluctuations: Another Look at China's Incredibly Stable GDP Growth

China’s official real GDP growth has held surprisingly stable in recent years. As national GDP figures influence both policy analysis and political decisions, the GDP growth rate of the massive Chinese economy has also great international implications. Taking the nominal GDP growth and price index data as given and experimenting with alternative deflators, this paper attempts to track missing fluctuations in real GDP growth in recent years. Based on the constructed growth series, real GDP growth decreased during 2015–2016 and picked up in 2017. Growth has been again decelerating this year. Furthermore, the constructed growth rate seems to be well below the recent official figures. Data available at https://www.bofit.fi/en/monitoring/statistics/china-statistics/.

How Much Should We Trust the Dictator's GDP Estimates?

I study the overstatement of GDP growth in autocratic regimes by comparing the self-reported GDP figures to the night time lights (NTL) recorded by satellites from outer space. I show that the NTL elasticity of GDP is systematically larger in more authoritarian regimes. This autocracy gradient in the elasticity is robust to multiple changes in data sources, econometric specification or sample composition and is not explained by potential differences in a large set of country characteristics. The gradient is larger when the incentive to exaggerate economic growth is stronger or when the constraints on such exaggeration are weaker. The results suggest that autocracies overstate yearly GDP growth by as much as 35%. Adjusting the GDP data for the manipulation taking place in autocracies leads to a more nuanced view on the economic success of non-democracies in recent decades and affects our understanding of the effect of changes to foreign aid inflows on income per capita.

New Mixed Method of CHARM-RAS for Generating Regional Input-Output Tables (RIOTs) of Gilan and Hormozgan Provinces, Iran

The application of CHARM for the estimation of RIOTs needs two residuals: exports and value added. The first one seems to be plausible whereas the second one is not appropriate for those countries like Iran which have regional accounts. The comparison of the regional sectoral value added and the regional GDP figures of Gilan and Hormozgan provinces derived from the CHARM method with corresponding official figures reveal underestimation of 2.4 per cent for Gilan province and overestimation of 9.9 per cent for Hormozgan province. These deviations are more pronounced in regional sectoral value added of two provinces. These observations raise an important question: why one should overlook and/or unnecessarily adjust the official data? To solve this issue a new mixed CHARM-RAS method is proposed. The overall findings show that first of all, as compared to the CHARM method, the proposed mixed method guarantees the regional sectoral value added and GDP of two provinces provided by SCI. Secondly, the degree of accuracy between two methods reveals that the proposed method outperforms the CHARM method in all the statistical methods.

Predicting Early Data Revisions to U.S. GDP and the Effects of Releases on Equity Markets

The effects of data uncertainty on real-time decision-making can be reduced by predicting data revisions to U.S. GDP growth. We show that survey forecasts efficiently predict the revision implicit in the second estimate of GDP growth, but that forecasting models incorporating monthly economic indicators and daily equity returns provide superior forecasts of the data revision implied by the release of the third estimate. We use forecasting models to measure the impact of surprises in GDP announcements on equity markets, and to analyze the effects of anticipated future revisions on announcement-day returns. We show that the publication of better than expected third-release GDP figures provides a boost to equity markets, and if future upward revisions are expected, the effects are enhanced during recessions.