CAPE TOWN – Statistics SA will overhaul economic output data and revise the weights of the various sectors that are used to calculate gross domestic product (GDP), but the broader growth trends, past and present, were unlikely to be affected, economists said yesterday.
The statistics agency said in response to Business Report questions yesterday that the planned revisions were part of a five-year revision cycle, that was internationally recommended. Previously, Stats SA revised GDPs numbers in 2014, 2009 and 2004, respectively.
“It is best practice to benchmark estimates of national accounts every five-years because you need an opportunity to introduce methodological changes and improvements, as well as periodic datasets such as a household budget survey and large sample surveys.
The revised estimates were scheduled to be released in September, with revisions going back to at least the new base year, 2015, but possibly longer, the agency said.
Economists.co.za chief economist Dr Mike Schussler said in general, the mining and older formal industries were well surveyed statistically in South Africa, but there wasscope for improvement, for example, in the services and transport sectors.
Additionally, he and a number of other South African economists, and the World Bank, had indicated to Stats SA that the informal sector was much bigger than what the current data showed.
Schussler believed better data on the sector could add up to 10-15 percent onto the GDP. The GDP amounted to R4.9 trillion in 2018.
He said typically, a reweighting of data sets results in minor changes to growth rates, but did not detract from the broader growth trends.
GDP figures from the second quarter of 2020 onwards would be calculated using the new reference year and revised weights.
The economy has been mired in the longest economic downward cycle since 1945, strained by political and policy instability, poor business and consumer confidence, rising government debt and electricity cuts.
GDP growth likely slowed to 0.4 percent in 2019 from 0.8 percent in 2018, according to the SA Reserve Bank. National Treasury and the central bank have forecast GDP to expand by 1.2 percent this year, but international lenders such as the World Bank and International Monetary Fund have forecast growth of below 1 percent.
Absa Bank senior economist Miyelani Maluleke said while the rebasing of GDP data was a regular occurrence, it was difficult to say how it would affect historic data and forecasting.
“Our approach is to always wait and see what the new state of national account numbers look like and then I think we’ll recalibrate our models,” he said. The bank forecasts economic growth of 0.9 percent this year.