Ratings of GDP Accuracy in Europe
16 June 2019
The quality of economic data in Europe is very variable. Switzerland, the United Kingdom and Germany publish consistently good quality data, ranking high by international standards. There are sizeable quality issues with data produced in Eastern Europe. And at the lower end of the scale, data produced in Russia and Georgia is likely to be of least value in describing prevailing economic conditions.
► See the Data Quality Ratings table for Europe
Why GDP Quality is Very Important
GDP data have been described as “The World’s Most Powerful Numbers“1. We wouldn’t take issue with that description.
GDP data are, without question, of crucial importance. GDP data are used by Governments everywhere to help make policy decisions affecting millions; to direct governmental aid flows; and in many other ways. GDP data are used by banks, financial organisations of all kinds and businesses the world over to help make investment decisions, as a base for base corporate strategy, and for many other tasks.
Yet few countries achieve the standards set internationally by the United Nations, or keep up to date with recommended best practice. 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 (further papers will review the conceptual problems underlying GDP data).
This paper sets out only to review which GDP data sets in Europe are reliable 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 ordained System of National Accounts (SNA) they use (some still use 1993 standards – a pre Amazon, Facebook and Google era); how much informal economic activity may remain uncounted (maybe up to 50%); and various other proxy indicators of possible inac