The National Accounts Section of the Department of Statistics announces the release of the estimates of Gross Domestic Product (GDP) for the period 2007 to 2011. The 2011 figures are Preliminary, 2010 are Provisional, 2009 and 2008 are Revised and the 2007 have been held Final until the next historical revision.
The 2011 preliminary results are based on early estimates from major data sources such as the Central Bank, Ministry of Tourism, and the Foreign Trade Section of the Department of Statistics, etc. These data sets feed mainly into the Expenditure Approach to GDP which allow for Current and Constant Prices to be estimated for 2011.
The Preliminary 2011, Production Approach GDP is estimated at Constant Prices as these are based mainly on indicators which normally mimic movements of particular industries such as hotel room rates, megawatt sales, Building Permits, New mortgages, Consumer Price Index, etc. The Preliminary figures are revised as additional data become available in keeping with international practices and procedures.
According to these early results, the GDP in Current Prices for 2011 had an increase of 0.2% while at Constant Prices the growth was 1.6%. The difference in these two methods of expressing the growth in an economy (GDP) is aptly expressed in the website Diffen.com/diffence/Nominal GDPvsRealGDP which states, “The Current GDP measures the value of all the goods and services produced expressed in current market prices.
On the other hand, Constant GDP measures the value of all the goods and services produced expressed in the prices of a specific year. Constant GDP offers a better perspective than Current GDP when tracking economic output over a period of time. When people use GDP numbers, they are often talking about Current GDP, which can be defined as the total economic output of a country.
This output is measured at current price levels and currency values, without factoring in inflation. One uses the Current GDP figures to determine the total value of the products and services produced in a country during a particular year. However, when one wants to compare GDP in one year with past years to study trends in economic growth, Constant GDP is used.”
The difference in the growth patterns in Constant and Current Prices in 2011 is explained by examining the GDP by the Expenditure Approach, which is estimated as Government and Household Consumption combined with Investment and Exports minus Imports.
Exports of Goods and Services at Constant Prices were higher than at Current Prices during 2009 to 2011 (see table I below). This phenomenon was due to the level of the deflator during this period. This deflator is a combined weighted index of an Average Tourist Expenditure Index and a Goods Exported Index, which were all below 100 during this period.
The Average Tourist Expenditure Index carries the greater weight, with tourism representing an average of 65% of all Exports from 2007 to 2011. This index indicates that tourists spent less per average tourist day during this period, firstly due to the world-wide recession in 2009 when tourist expenditure dropped by $500 million, followed by a recovery that saw tourists also reaping the benefits of the many promotional programs being offered by the industry to encourage patronage.
