A False Measurement: Gross Domestic Product

Another example of the shortcomings of GDP as an indicator of the economic health of a country has been provided by an analysis of the actual effects of the exit of Intel from Costa Rica compared to the supposed catastrophic ones according to the indicator.

Monday, April 21, 2014

Around the world, negative opinions are growing in regards to using Gross Domestic Product as a key indicator for a country's economy.

An article by Joe Miller on bbc.co.uk notes that this indicator, "... a measure of the value of goods and services a country produces - is perhaps the most powerful statistical indicator in history, and has a huge influence on global policy..." but .."it is hopelessly flawed as a yardstick of human welfare."

The criticisms of GDP as an indicator of economic health are very old, and the globalization of the production of goods and services and the rapid increase in world trade, have dramatically increased the difficulties in measuring it correctly. One extreme example of this is Costa Rica, which includes in all of its economic indicators production by Intel and the value of its exports, artificially inflating the value of GDP and its global position as an exporter of technology.

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More on this topic

Panama: Economic Growth Will be Below Potential

April 2018

According to business sector estimates, this year the Panamanian economy will grow around 5.4%, below the rate of 6.5%, considered optimal.

The Center for Economic Studies at the Chamber of Commerce, Industries and Agriculture of Panama (CEECAM), has prepared a study detailing Panama's economic performance, a review of sector indicators and economic and business expectations.

Costa Rica: GDP Up 3.2% in 2017

April 2018

The increase reported at the end of the fourth quarter of 2017 is mainly explained by higher spending on final household consumption and higher gross capital formation.

From a report by the Central Bank of Costa Rica:

In the fourth quarter of 2017, economic activity, measured by the trend of the real Gross Domestic Product (GDP), grew at an annualized rate of 3.2%, in response, mainly, to higher spending on final household consumption and in gross capital formation.  In the year-on-year comparison, production registered a growth of 3.1%.    

Guatemala in Statistics 2011

April 2012

Statistical information compiled by the Banco de Guatemala has been released, which includes general indicators of real, external, monetary, financial and fiscal indicators.

"Gross Domestic Product (GDP) grew 3.9 percent in 2011, according to the latest review by the Bank of Guatemala (Banguat) confirming an improvement in the performance of productive activities."

Guatemalan Economy - July 2012

August 2011

The monthly report of major national economic indicators has been released by the Foundation for the Development of Guatemala.

Inflation
According to the Consumer Price Index (CPI) at republic level, prepared by the National Statistics Institute (INE), in July of 2011, it registered a value of 105.22, compared to 104.25 recorded last month, making the monthly variation 0.95%, while the cumulative increase to 31 July was 5.22%, which means that the price level rose during the month of December last year. The rate of change (change in July 2011 compared with the same month of 2010) stood at 7.04%, higher than that observed in July 2010.The main determinants of inflation products were agricultural products.

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