GDP changes could alter States spend Recalculation of GDP could alter targets
REVISED economic growth calculations have shown that Guernsey was in recession for two years this decade and leave the door open for States spending to increase.
The island’s Gross Domestic Product for 2016 has been restated from an original £2.4bn to £2.86bn. after it was re-evaluated under updated, more standardised methodology.
Declines in total GDP by 3.6% in 2010 and 3.7% in 2012 are now visible.
This was masked in the old method by the way it interpreted company profits data - it reported positive GDP changes of around 2 and 5% respectively in those years.
Policy & Resources president Gavin St Pier said it was the data that had changed, not the economy.
‘The economy is as strong today as it was yesterday.
‘The island’s GDP data is now calculated using a methodology comparable to other similar jurisdictions and, as a result, has risen from £38,000 to £46,000 per person,’ he said.
‘Having said that, the restated GDP estimate does have various knock-on effects for government and its policies – our fiscal framework, for example, uses GDP estimates as a base for a number of targets.
