What is rebasing of gdp

what is rebasing of gdp

Ghanas rebased GDP explained

Gross Domestic Product (GDP) is an internationally recognised measure of economy size and strength. It is importance to have up-to-date data so the rebasing is a step in the right direction. It is expected to make planning and investment decisions more robust and informed. Upon completion of this workshop, participants should be able to: Describe fundamental aspects of a GDP rebasing exercise and be able to select an appropriate new base year. Understand the data requirements to undertake GDP rebasing, and how to manage a statistical system that intends to conduct a rebasing.

Margaret Mwanakatwe said:. Speaker, in Government will undertake an exercise to rebase the Gross Domestic Product, an exercise last conducted in The rebasing of the Gross Domestic Product will provide reliable and updated information on the current size and structure of the national economy.

The rebasing will also provide Government with an opportunity to update and develop appropriate social and economic indicators to measure progress in achieving the objectives under the National Development Plans and the Sustainable Development Goals. What is evidently clear is that many people do not understand what GDP rebasing is, why it is done and the implications of such an exercise on the economy.

I thought I dedicate some time to share what GDP rebasing is and why it is important for an economy how to make a motorcycle jack stand ours that has been undergoing transformation.

Gross Domestic Product GDP is an internationally recognised measure of the size and composition of an economy. GDP attaches monetary value to all the goods and services that a country produces in a given year. It is a measure of how well an economy is performing how to draw facial expressions capturing either its expenditure or incomes. Think of this at the household level in our homes, we can tell how well off a family is by looking at the assets they have, the value of these assets and how much money they make or how much they spend the same how to gradually lighten your hair countries.

It is an invaluable input in national development planning and helps the government know whether or not the country is growing or contracting.

In addition, knowing the size and structure of the economy helps government assess its performance by disaggregating the source of economic performance. So when you really think about it, GDP measures are key as they provide a general overview of how an economy is doing.

If GDP is high,it is a signal that good things are happening or about to start happening such as people getting more jobs or more money in their pockets or businesses beginning to boom. In addition to the above, GDP measures help a country gauge itself against other countries.

Comparatively, it means that the South African economy is 14 times bigger than the Zambian economy. It means that collectively, we need 14 countries the economic size of Zambia to make one South Africa. During the same period, the Chinese economy was times bigger than the Zambian economy.

With regards economic might, therefore, at our current economic performance, Zambia is the size of a tiny mosquito in relation to China! I will not bore you the economic jargon but briefly, under the expenditure approach, we compute GDP by calculating and summing all the monies spent by the different economic players in the country.

Governments also spends money in the economy through its investments in roads, vehicles, medical equipment etc. The income approach is the reverse of the expenditure approach in that here, we focus on the money that individuals, household, firms and government earn. Since ideally we will spend what we earn, both the Income Approach and Expenditure Approach to GDP measurement should yield the same result.

CSO does a fantastic job in reporting both methods in their statistical bulletins. As the economy grows and evolves, GDP measures need to be recalculated to account for the new sectors that are emerging. For example, prior to theour GDP estimates would not capture the role of mobile telecommunications in Zambia because we had no mobile telecoms industry.

It means that until the GDP was rebased, we underestimated our economic size because we ignored the new sector. In addition to including new sectors, the relative importance of GDP sectors change as time progresses. Recently, we have seen new economic activities such as gambling as well as the increasing importance of the real estate industry, construction and agricultural sectors.

These changes need to be accounted for, hence the need for rebasing. Rebasing our GDP given these developments is thus an important undertaking as it will provide government, private sector as what is the jake ayres master attraction formula as the foreign sector with up to date information on the size, composition and relative strength of the Zambian economy.

This information is key to making well informed planning and investment decisions. If someone who was in school has now graduated and is contributing to the incomes and expenditures in the home, do you still treat them as students? No, rather, you acknowledge their contributions to the household, just as you would recognise a new member of your home such as an in-law who is contributing to the economic livelihood of your home.

Once rebased, there are only two feasible outcomes: Either the economy has grown further or that it has shrunk. It is, however, highly unlikely that the Zambian economy would have shrunk from the last What does a physical chemist do rebasing of As a result of the rebasing, Nigeria is now the largest country in Africa beating South Africa which had dominated the top for many years. For Zambia, once confirmed that our GDP figures are higher after rebasing, the following will be obvious:.

It will piles how long to clear up that our Debt to GDP Ratio will reduce, which implies that we would have more room to borrow than we earlier imagined. This will reduce the risk of debt distress. Our Tax to GDP Ratio will further reduce, meaning that we would have to see more enhanced efforts to collect more taxes.

Such efforts could be either increased tax rates or a broader tax base or the introduction of more innovative tax collection measures on already existing taxes. I hope we are now all on the same page with regards rebasing. With the above, let us, however, agree that more than rebasing, what Zambia needs is a stimulation of the economy to create sustainable job and high disposable incomes and low poverty.

However, even with the new GDP measures, if poverty reduction programmes are not enhanced and sustained, we would have only grown as an economy on paper. Your email address will not be published. Skip to content. By Hjoe Moono. Electoral blackmail in Mangango disheartens G. Leave a Reply Cancel reply Your email address will not be published.

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The GDP rebasing is also happening; last time when the GDP was rebased in there was no significant jump in the economy size - In FY06, on base, nominal GDP was Rs trillion . Oct 06, What is rebasing of GDP? GDP or Gross Domestic Product is the market value of all final goods and services produced in a country within a period of time (usually a year). It is used by economists as a measure of the performance of an economy and is the most widely used statistic in comparing the economies of different countries. The rebasing of the Gross Domestic Product will provide reliable and updated information on the current size and structure of the national economy.

The Presentation of the Budget in Parliament. Margaret Mwanakatwe said:. Speaker, in Government will undertake an exercise to rebase the Gross Domestic Product, an exercise last conducted in The rebasing of the Gross Domestic Product will provide reliable and updated information on the current size and structure of the national economy. The rebasing will also provide Government with an opportunity to update and develop appropriate social and economic indicators to measure progress in achieving the objectives under the National Development Plans and the Sustainable Development Goals.

What is evidently clear is that many people do not understand what GDP rebasing is, why it is done and the implications of such an exercise on the economy. I thought I dedicate some time to share what GDP rebasing is and why it is important for an economy like ours that has been undergoing transformation.

To begin, let us be clear that what is being proposed for rebasing is Gross Domestic Product GDP and not the economy per ser. GDP is an internationally recognised measure of the size and composition of an economy. GDP attaches monetary value to all the goods and services that a country produces in a given year. It is a measure of how well an economy is performing by capturing either its expenditure or incomes.

Think of this at the household level in our homes, we can tell how well off a family is by looking at the assets they have, the value of these assets and how much money they make or how much they spend the same with countries.

Knowing the size and structure of the economy is as important as the economy itself:It is an invaluable input in national development planning and helps the government know whether or not the country is growing or contracting.

In addition, knowing the size and structure of the economy helps government assess its performance by disaggregating the source of economic performance. So when you really think about it, GDP measures are key as they provide a general overview of how an economy is doing. If GDP is high, , it is a signal that good things are happening or about to start happening such as people getting more jobs or more money in their pockets or businesses beginning to boom.

In addition to the above, GDP measures help a country gauge itself against other countries. Comparatively, it means that the South African economy is 14 times bigger than the Zambian economy. It means that collectively, we need 14 countries the economic size of Zambia to make one South Africa.

During the same period, the Chinese economy was times bigger than the Zambian economy. With regards economic might, therefore, at our current economic performance, Zambia is the size of a tiny mosquito in relation to China!

I will not bore you the economic jargon but briefly, under the expenditure approach, we compute GDP by calculating and summing all the monies spent by the different economic players in the country. Governments also spends money in the economy through its investments in roads, vehicles, medical equipment etc. The income approach is the reverse of the expenditure approach in that here, we focus on the money that individuals, household, firms and government earn.

Since ideally we will spend what we earn, both the Income Approach and Expenditure Approach to GDP measurement should yield the same result. CSO does a fantastic job in reporting both methods in their statistical bulletins. As the economy grows and evolves, GDP measures need to be recalculated to account for the new sectors that are emerging.

For example, prior to the , our GDP estimates would not capture the role of mobile telecommunications in Zambia because we had no mobile telecoms industry. It means that until the GDP was rebased, we underestimated our economic size because we ignored the new sector. In addition to including new sectors, the relative importance of GDP sectors change as time progresses. Recently, we have seen new economic activities such as gambling as well as the increasing importance of the real estate industry, construction and agricultural sectors.

These changes need to be accounted for, hence the need for rebasing. Rebasing our GDP given these developments is thus an important undertaking as it will provide government, private sector as well as the foreign sector with up to date information on the size, composition and relative strength of the Zambian economy.

This information is key to making well informed planning and investment decisions. At the household level, think of it this way:If someone who was in school has now graduated and is contributing to the incomes and expenditures in the home, do you still treat them as students? No, rather, you acknowledge their contributions to the household, just as you would recognise a new member of your home such as an in-law who is contributing to the economic livelihood of your home. What are the consequences of rebasing the GDP?

Once rebased, there are only two feasible outcomes: Either the economy has grown further or that it has shrunk. It is, however, highly unlikely that the Zambian economy would have shrunk from the last GDP rebasing of As a result of the rebasing, Nigeria is now the largest country in Africa beating South Africa which had dominated the top for many years.

For Zambia, once confirmed that our GDP figures are higher after rebasing, the following will be obvious:. I hope we are now all on the same page with regards rebasing.

With the above, let us, however, agree that more than rebasing, what Zambia needs is a stimulation of the economy to create sustainable job and high disposable incomes and low poverty. However, even with the new GDP measures, if poverty reduction programmes are not enhanced and sustained, we would have only grown as an economy on paper. What is now required given that is near is for government through the Ministry of Finance and Central Statistical Office to carry out a sensitization campaign to inform the stakeholders and citizenry about the process and possible outcomes from the GDP rebasing exercise and their possible implications associated with the results.

Importantly, government will have to convince the citizens why such an exercise is important now given that we rebased our GDP in Importantly, it is critical that people clearly understand that a high GDP does NOT imply an increased standard of living. Furthermore, people should be made aware that to achieve accurate and reliable economic data for effective planning will only be realized through adoption of best practices in national accounts statistics which must be updated as regularly as possible to aid planning.

Too much theories what we want are practical isues. Put kamunani pambale not thoeries on how you will put kamunani pambale. First of all Moono lesrn to summarize. We are not here to read books. We sre boogers.

Secondly no financial system can successfully work in Zambia as long as these guys continue stealing. Very good and informative article Moon. Being someone from a different field, this was definitely educational. We need such unpoliticized articles that are simply about informing and educating citizens. Thanks a million! One important factor you forgot to mention Mr Moono is that the increase of the population will have a negative effect on what ever gains were obtained with a higher GDP.

So a high population growth rate is a challenge that also has to be addressed. Rebasing the GDP should be done after ten yrs or more. This PF govt rebasing is an attempt to cosmetically dress the economy to mask the high foreign debt and high budget deficit.

Just from recent Zambia is now rebasing her GDP after only 5yrs? I smell a big dirty rat in this exercise. Zambia is the size of a tiny mosquito in relation to China is a wrong analogy. Zambia is the size of a dump site rat in relation to China sounds about right. Dokowe I guess you are not Zambian because if you were I would regard you as a very u. They just want more room to borrow and put us deep in the debt trap, rebase what!!

Its only just because our southern neighbor rebased theirs in recent weeks. Its a no-brainer Margaret thank you and we know you will fiddle with the numbers so that no one will believe in the size of our economy leading to disastrous consequences in the financial markets. Zambia is heading to big disaster!!!!!!!!!!!!!!!!!! How can we copy what Zimbabwe is doing rebasing . You rebased the kwacha by removing three zeros and slowly the zeros are coming back!!!!!!!!!!!!!!!!!!!!!!!!

Later on you blame us that we are saying evil regarding our country coz we are not in Zambia.. You want us to keep quite yet you are copyning cholera from Zim. Watch out next stop.

The Zimbabwean economy has shrunk, ours has grown. There is no basis of comparison there. Higher copper production, more food production, cement, sugar, etc, etc. Herryman,I am an admirer of how you simplify the complex economic topics just like i do, even if i am not an economist.

That is what it means to be an expert in my books. Propounding an issue so that ordinary Zambians can understand. There are Phd holders,professors who cannot write the way you do. Just like our Opposition leaders,even those who claim they can fix the economy, cannot simplify the impact of excessive debt,corruption,low reserves,mines,chinese problem etc and other issues to the man on the street and demonstrate how and what they would do differently lso that they provide checks and balances and sell themselves to the electorate.

Although some of us can simplify that,but given the toxic environment and political tribalism,we hold our horse lest we are labelled names. We also. Rebasing an economy basically means revising the methods and base data used to calculate GDP. We did this as recent as Does it mean that it was poorly done to warrant another one within a decade? There is nothing wrong in rebasing the economy but everything wrong if the exercise is done every after two or three years.

It shows lack of integrity by the parties involved. What if a country survives on foreign aid and borrowing to pay a hudge government work force, that is expenditure , so will GDP be a measure of borrowed and donner monies????

It is like having a nice car but no house to park it. In short, let us get a better grip on our mines and the taxation, re-invest in domestic industries and then we can slowly begin to feel confident about our economy.

Alot has happened since we have seen development the likes we have never seen before. Whether you like it or not you HH worshippers we are rebasing.

You think insulting on social mefia will win you votes???. Tell us what you will do differently not just displaying your hatred for you fellow Zambians. The problems with chaps like you is that you are one track minded in your Dundumwezl brains.

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