UK economic output will
get near five percent boost from data changes
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[June 10, 2014]
LONDON (Reuters) - British gross
domestic product is likely to be revised up by almost 5
percent in September because research and development
costs, black-market activities and other changes will be
included, the country's statistical agency said on
Countries across Europe are implementing new European Union
statistical rules - which among other things require estimates of
the profits from prostitution and drug-dealing to be included in
The Office for National Statistics estimated last month that drugs
and prostitution would add almost 1 percent to British GDP, and said
the total changes would raise GDP by 4-5 percent.
On Tuesday, the ONS gave a more detailed estimate of the impact,
saying that for 2009 the changes would increase GDP by 4.6 percent
or around 65 billion pounds ($109 billion). Estimates for 2010-2012
will come in August and the new statistical methods will come fully
into force in September.
The biggest boost comes from counting research and development as
investment, which will add 1.6 percent to GDP.
Previously, research was treated as a pure cost for companies, and
its value was reflected in the prices they charged, rather than
counting as output in its own right.
Changes to the calculation of defense spending and pensions will add
around 0.2 percent each to GDP.
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The impact of the changes on the years before 2009 is smaller,
raising GDP on average by around 2.3 percent. This will affect
growth rates over the period, and the ONS will publish an estimate
of this on June 30.
(Reporting by David Milliken; Editing by Larry King)
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