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Emerging Market Economic Data Cannot be Trusted

Brian Sturgess - August 2013

Speed Read
  • The failure by many national statistics offices to regularly update the base year on which GDP growth is measured casts doubt on the accuracy of much published data.
  • The need to account for changes in the dynamic structure of economies necessitates regular rebasing, ideally every 5 years, but these exercises are costly and are carried out irregularly by most countries.
  • A survey of 187 countries using IMF data found that the average period since the base year was updated was 11 years, but 29% of the non-OECD countries had not rebased for over 16 years.
  • Rebasing after a long period of time can have a dramatic impact on GDP revisions, but the infrequency of the practice means that most published emerging market economic data and cross-country comparisons are largely meaningless.

The Importance of Base Years

The accuracy of much international GDP and economic growth data, particularly for emerging and frontier markets, is poor. This makes many cross-country comparisons of GDP, income per capita and growth rates made with the more developed countries of dubious value. A serious problem undermining the quality of published data is the failure of national statistical offices to u...

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