Readers Question: Does growth forecast always corresponds to the mesured growth?
If a bias exist, is it always on the same side?
Recently, growth statistics published on February 26th showed that the GDP figures for the fourth quarter of 2009 were a higher than first recorded. GDP grew by 0.3%, rather than the initial estimate of 0.1%.
However, the growth was from a lower base, though, and the cumulative loss of output to the trough in the third quarter was revised down to – 6.2% from – 6.0%.
This shows that economic statistics are often revised when more data has become available. Producing economic statistics is an inexact science, because of the need to get so many.
Interestingly when statistics of GDP growth in fourth quarter of 2009 were produced a few weeks ago, many were disappointed and sceptical of the 0.1% growth. Other indicators such as manufacturing output and confidence indicators suggested stronger growth.
It is certainly welcome to see economic growth increase faster than expected. A growth rate of 0.1% puts more pressure on the need for more quantitative easing. But, growth of 0.3% means there is less need to pursue further monetary boosts.
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- Misleading economic statistics