GDP calculations to include bootleggers, drug dealers
November 9, 2009
By Ethel Hazelhurst
Production of witblitz and a range of other illegal activities will be captured in future calculations of gross domestic product (GDP). Coverage of activities not previously recorded - including crime - were part of a major review of GDP data, Statistics SA said on Friday.
On November 24 the agency will release the results of its latest benchmarking and rebasing exercise - something it undertakes every five years, together with the Reserve Bank.
The release will include GDP estimates for the third quarter of this year, as well as revised quarterly, annual and regional estimates as from the first quarter of 2002.
Benchmarking is a process that reconciles data not available on a quarterly or annual basis with the short-term data already reflected in the GDP figures. The exercise also takes account of structural shifts in the economy during the period, improves coverage and may involve changes to statistical methodology.
Rebasing will move the base year for the calculations from 2000 to 2005.
Joe de Beer, Stats SA's executive manager of economic analysis, said there were "three main improvement areas". The first was the inclusion of estimates for the non-observed economy (NOE), described as "activities which for one reason or another are not recorded in the statistical surveys or administrative records".
Estimates of the "value" of criminal activity will be based on available information, for instance the value of goods, such as narcotics and pirated products, confiscated in police "busts". These would provide a minimum figure for the type of activity, De Beer said. He pointed out that it was impossible to extrapolate the figure to arrive at a total.
But Rashad Cassim, Stats SA's deputy director-general of economic statistics, said crime figures would not have a material impact on overall GDP.
The NOE does not refer only to illegal trade and other criminal behaviour but includes activities of the household sector - such as subsistence farming and any form of household production of goods or services for own use.
The second area of improvement is the introduction of new classifications in line with international requirements.
The third is the inclusion of more detailed industry information. Stats SA will compile information on 292 industries compared with 95 previously and on 105 products compared with 28.
But this information will only be reflected in data up until the end of last year. Information on the current year will be incorporated in next year's releases, when this year's details have become available.
De Beer said the revisions were likely to be smaller than on the past two occasions - 1999 and 2004.
For the period based on 1995, the revisions effectively rewrote South Africa's economic history. Between 1993 and 1998, GDP at current prices (which includes the impact of inflation) was about 11 percent to 14 percent higher than previous estimates, De Beer said. "And the real economic growth rate was 2.7 percent in that period, compared with the previous estimate of 2.2 percent."
There were several reasons for the sweeping changes, including a change in the system of national accounts, which record GDP, and the inclusion of the informal sector.
For the period based on 2000, published five years ago, statistics based on tax registers were included and were largely responsible for upward revisions in GDP at current prices of between 0.5 percent and 3.9 percent.
"The average annual real economic growth rate was 2.7 percent during the period 1997 to 2003 compared with the previous 2.4 percent estimate."
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