Ln July 28, Statistics Ireland estimated that the country’s second-quarter growth was 3.3%. 1er September, he revised his estimate to… 0.5%. Almost seven times less! At this level, it is no longer a revision, but poetry.
1er In September, United Kingdom statisticians also announced a particularly significant correction. This covered the years 2020-2021. After careful consideration, they found almost two points of gross domestic product (GDP), which was probably lying around on the back of the sofa. In the fourth quarter of 2021, UK GDP was ultimately 0.6% above its pre-pandemic level, compared to a previous estimate which put it 1.2% below. Suddenly, all the little political music of the moment, which said and repeated that “the United Kingdom is the country which has experienced the worst growth of the G7 countries since the pandemic”, turned out to be false. It’s still not brilliant, but Germany is doing worse and France is at the same level.
Economic statistics are currently experiencing serious slippage. Jobs in the United States? In June, 209,000 were created, US authorities initially announced. No, it was 185,000, they clarified in the second calculation. Ultimately, it was 105,000, according to the third calculation. Between the first and third estimates, the difference goes from simple to double. Initially, the US economy seemed on the verge of overheating; in fact, it was slowing down.
This is not about throwing stones at statisticians. Succeeding in estimating a GDP trend less than a month after the end of a quarter is extremely difficult, knowing that it involves adding apples and pears: GDP is the sum of the added values of a economy, which amounts to piling up hospital services, restaurant meals, agricultural exports, school work, accounting services… When the economy does not suffer from shocks that are too violent, the calculations are already difficult. But in times of pandemic, or during a sudden jump in commodity prices, this becomes impossible.
Demonstrate “humility”
As for Ireland, the problem is deep. Economists have long warned that it is better to avoid using the GDP of this country, completely biased by the enormous presence of American multinationals, which place their European headquarters there for tax reasons. All of their profits in the region are recorded in this small country, generating erratic oscillations unrelated to economic reality.
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