Ratings of GDP Accuracy in Asia
9 October 2019
Why GDP Data are Important
GDP data are, without question, of crucial importance. They are used by Governments, banks, companies, and investors the world over to make life changing decisions. Yet relatively few countries achieve the standards set internationally by the United Nations, or keep the data up to date. Even when data meets UN standards, most measures of GDP are flawed conceptually, in the way they are collected and presented, to an extent that few realise.
This paper reviews GDP data in the Asia Pacific region in relation to basic standards, including base years used (basing data on a 25 year old snapshot of economic activity isn’t likely to produce accurate data); which UN System of National Accounts (SNA) they use (some still use way out-of-date 1993 standards ) ; how much informal economic activity may remain uncounted ( in many countries a great deal of economic activity remains uncounted ); and various other indicators of potential inaccuracy. The resulting Data Quality Ratings ( DQR ) enable an understanding of which countries data are reasonably useful, through to which countries produce data that are potentially highly misleading.
The quality of economic data in the Asia-Pacific region is particularly important, since after adjusting for price and data quality differences it probably now accounts for over half global output, and contains three out of four of the biggest economies . As well as half the world’s population and two thirds of its largest cities. In very general terms, Asia is now quite simply about half the entire world in economic terms.
Measuring GDP Data Quality
The GDP Data Quality Ratings currently cover five factors to determine data quality. Each factor is evaluated to provide country scores which are then normalised using the standard deviation of the data for each factor and combined into the DQR score using a weighted aggregate to reflect the i