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Benchmarking quarterly GDP to other official statistics.

Benchmarking quarterly GDP to other official statistics. Andrew Mortimer Short-term Economic Indicators Branch. Purpose. To demonstrate a method of constraining quarterly short-term indicators to other published statistics; To seek the views of SESCG on: the need for benchmarking;

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Benchmarking quarterly GDP to other official statistics.

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  1. Benchmarking quarterly GDP to other official statistics. Andrew Mortimer Short-term Economic Indicators Branch

  2. Purpose • To demonstrate a method of constraining quarterly short-term indicators to other published statistics; • To seek the views of SESCG on: • the need for benchmarking; • what source(s) to benchmark to; • timing

  3. Comparison of Quarterly GDP against other sources • Differences between estimates are inevitable • Actual (directly measured) values of sectoral GVA are available from: • Regional Accounts • SABS (ABI) • Scottish Supply-use tables • Quarterly GVA uses completely different data sources • Uses proxy measures as a short-term indicator of GVA – in constant prices. • Is currently the only official measure of real growth in the economy – and consequently is used for long-run analysis Lagged by a number of years

  4. Example: Hotels and catering

  5. Example: Hotels and catering

  6. Example: Hotels and catering

  7. Example: Hotels and catering

  8. Example: Hotels and catering

  9. Example: Hotels and catering

  10. Example: Hotels and catering

  11. Example: Hotels and catering

  12. Example: Hotels and catering

  13. Benefits • Consistency between official statistics is desirable; • Long-run growth measured using ‘actual’ GVA; • Increased scrutiny of Regional Accounts / other official statistics; • Focus on quarterly GDP shifts, appropriately, to its intended use – i.e. a short-term indicator of growth

  14. Problems • Choice of ‘gold standard’ • Depending on the source constrained to, potentially large revisions on an annual basis; • Scottish Government are involved in the quality assurance of regional accounts and have been instrumental in highlighting problems in the statistics but QA is performed using aggregates, not source data – loss of control; • Whether or not to anticipate and adjust for differences: what happens if systematic bias is indentified and then cancelled out by new observations (or vice-versa)? • Some component series used in quarterly GDP are expressed in constant prices at the outset – with no established deflator that could be used to ‘inflate’ them

  15. Timing • Assuming that we pursue benchmarking… • 3 choices (not mutually exclusive) • Constrain constant price estimates to double-deflated constant price I-O tables (2-3 years); • Constrain to time-series of current price I-O tables (1 year) • Constrain to 32 industry-level regional accounts (immediate?).

  16. Discussion • the need for benchmarking; • what source(s) to benchmark to; • Timing.

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