The transition from the previous European System of Accounts (Sec 95) to the new Sec 2010 is behaving revalued almost simultaneously of all gross domestic products (GDP) of various countries, including Italy.
The values of the GDP that are increased simultaneously by all national statistical offices according to the new accounting rules.
In short, the GDP will be a bit ‘larger, but the relative size between the different economies will change at most a few places, and especially the history of economic dynamics, which will be gradually reconstructed for the past years, will not change in substance. In other words, the moments (long gone) growth is not at all apparent brightest, nor the crisis, including especially the current one, seem to have been less harsh than it already appeared there with the old accounts of Sec 95 With the GNP improve slightly higher, however, the parameters of the deficit and the public debt of all countries.
The new Sec 2010 includes some important new method of accounting and perimeter than in the past. We consider here, for brevity, only the main ones. The most important is that the expenditure in research and development are now considered as investment spending and thus contribute to the GDP (whereas before they were counted as intermediate costs). They are also considered as fixed costs expenses for armaments that could be considered investments.
Finally, is included in GDP, the estimation of illegal activities such as drug trafficking, prostitution and smuggling of cigarettes and alcohol. This is what the new rules provide international and Italy, as all EU countries, it is simply adequate.
The ISTAT released yesterday the first estimate on the value of the Italian GDP in 2013 with the new accounting methods: 1618900000000 euro. It is a highest value of 58.9 billion of that obtained with the criteria of Sec 95, which stood at 1.56 trillion. Therefore, there has been a revaluation of around 3.8%. We know now for the new data for 2013 only Germany and France published by Eurostat.
With the new methodology, the German GDP rose to 2.8095 trillion (+71.9 billion compared to Sec 95 ), while the French to 2.1137 trillion (+53.9 billion). If before the Italian GDP in 2013 was found to be 75.7% of the French and 57% of the German, now with Sec 2010, transactions have become, respectively, 76.6% and 57.6%, so with a slight improvement to our advantage, but not enough to significantly change the reality.
The year 2011 is for the moment what the Mayor has provided more details on the accounting changes occurred. Although the GDP of that year he had a revaluation at current prices of around 3.7%, not dissimilar to that estimated for 2013 The greatest value of the GDP of 2011 is derived for a 1.6% by the novelty of methodological Sec 2010 (of which 1.3%, which is the main part, due to the recognition of costs as investments in research and development.)
Other accounting changes have contributed to a net increase of 0.8% (within which the illegal activities have weighed for a + 1%, that is, for about 15.5 billion in more). Finally, innovations in national statistical sources and methodologies introduced in parallel to the new Sec 2010, including a different assessment of the underground economy, but not illegal, have accounted for a further 1.3% in raising the value of our GDP compared to the old criteria.
We therefore have a GDP a little ‘higher but still very sick. Its dynamics in the past two years has not changed much: with the new criteria the Italian GDP is in fact fell in 2012 by 2.3% (instead of 2.4%, a difference almost imperceptible) while it is decreased by 1, 9% in 2013, just as with the old accounting.
Neither the new statistical criteria will greatly help Italy and other countries in the single currency to rise faster in 2014-2015. Yesterday, the European Central Bank President Mario Draghi, speaking at a conference of the European Parliament, stated that the economic environment remains difficult. Draghi said that “the eurozone recovery is losing momentum. GDP growth has stopped in the second quarter and received information on the economic conditions during the summer have been weaker than expected. “
With a higher GDP in the denominator, thanks to the new criteria Sec 2010 , but improved a bit ‘the parameters of our public finances, which is not bad. In 2013, for example, the deficit / GDP falls 2.8% to 3% that you had with the old Sec 95 While the public debt / GDP ratio is lowered to 127.9% compared to the previous value of 132.6 %.
So, partly as a result of the changes in international accounting, the task of maintaining Italy virtuously its deficit below 3% (which however will not be able either to France or to Spain even with new parameters) will be a little ‘easier. Although not necessary to loosen the effort to reduce public spending unproductive to increase the primary surplus state and thus allow a stabilization of the debt even in the presence of a deflationary scenario.
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