Friday, September 21, 2012

GDP/GNP Revisions

As pointed out in the previous post Irish national income statistics are hugely influenced by the MNC presence here.  The figures themselves are also subject to frequent revision as new information becomes available and is incorporated into the statistics.  In the fourth paragraph of the recent National Income and Expenditure Accounts the CSO said the following:

The estimates for 2011 are based upon indicators for the different aggregates and must be regarded as tentative. The provisional nature of the estimates for 2009 and 2010 must also be borne in mind. In particular, the estimates for the year 2010 in the present report must be regarded as preliminary. Many of the inquiries upon which the basic compilations rest are incomplete and to the extent that figures given for 2008 and 2009 are still partly subject to revision, projections for the year 2010 are also affected. While no guarantee can be given that published figures will remain unaltered as inquiries proceed and as sources and methods are reviewed, it is expected that any changes made in future in relation to years earlier than 2007 will have a relatively insignificant effect on the year-to-year trend in these data.

The first estimate we will use is from the Q4 2011 QNAs released back in March and the second is from the Q2 2012 QNAs released yesterday.

The statistical revisions for GDP are shown below.

GDP Revisions

And is what has happen to the GNP estimates.

GNP Revisions

The upwards revisions make absolutely no difference to the economic reality faced by people but it does highlight the difficulties of measuring economic activity and further downplays the import that should be placed on the 4.3% rise in GNP reported yesterday.  As well as not reflecting the domestic economy it could be revised away in subsequent data releases.

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