Provisional estimates show that quarterly GDP in the Organisation for Economic Co-operation and Development (OECD) area grew by 0.2% in the third quarter of 2012, the same rate as in the previous quarter, but with continuing diverging patterns across countries. The growth is seen by many as a key economic performance indicator of significance globally and nationally.
It is interesting that we always talk about GDP ‘growth’, presumably important in a national mindset of ‘onwards and ever upwards’ for success in a global economy and towards some goal. The evidence appears to be that if GDP shrinks, our economy is perceived to be falling into recession, but can GDP grow forever and can everyone become progressively richer? Statistics like the OECD quarterly GDP figures also vary by such small percentages, with small swings or trends commonly fractions of one percent. Such small changes manage to achieve great importance, where the numbers being crunched are astronomically large. In many other fields of statistical research it is doubtful that the size of percentage changes being evidenced about GDP, would be perceived as statistically significant or reliable.
Nevertheless it is both heartwarming and encouraging, albeit maybe only temporarily, that for the third quarter of 2012, the United Kingdom topped the table of all OECD countries and areas, for increases in GDP growth, at 1%! An OECD commentary noted that this was due to the London Olympic and Paralympic games boosting the GDP growth to 1% compared with a contraction of – 0.4% in the previous quarter. At least we may begin to see the differences and impact as significant. In Italy, GDP contracted for the fifth consecutive quarter, although the pace of contraction did slow to – 0.2%, compared with – 0.7% in the previous quarter. Complacency is not to be encouraged because in recent quarters the UK figures have ‘see-sawed’ up and down around the zero mark. Our current concern should be will the Festive Season maintain the UK Olympic surge?
A final observation is about the quarterly figures for Canada, home and work base of our incoming Governor of the Bank of England. In Canada, GDP growth has been more positive with only one quarter in the last 2 years dipping below the zero line and all the others being plus 0.5% or more. However for this latest OECD report, the figures from Canada were not ready – could this be because a certain financial expert’s eye was off the ball and looking forward to a new job? Could it also be that in a year’s time, UK quarterly GDP growth figures will look like Canada’s?
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