Given that Chinese GDP numbers are manufactured top-down and don’t add-up; and that the US – in its wisdom – added “intangibles” to its GDP measure of economic progress and create $500 billion worth of growthiness out of thin air; it should not come as a huge surprise to learn that Greece is picking up bad habits. Following the realization that all their promises (and IMF forecasts are total bullshit), Eurostat will adopt a “new methodology” that will boost Greek GDP by 3 percentage points and historically reducing the depression in the Greek economy to a 0.3% shrinkage to be proud of. But where it gets downright idiotic, is that as a result of the methodology change, Greek GDP in 2014 will “grow” 3.6%, orders of magnitude above the previous forecast expansion of 0.6%, and also well above how much the US economy is expected to grow in 2014. Yup – good stuff.
Troika forecasts of the past… as a reminder…
The new methodology Eurostat is to adopt from October will see Greek gross domestic product boosted by 3 percentage points for this year, while reducing the ratio of debt to GDP by 4.4 percent.
The European System of Accounts (ESA 2010) will replace the existing ESA 95. The next deadline for the submission of data by the Hellenic Statistical Authority will be in September and it will use this new system. Where the new system is different is that it takes into account defense expenditure, investment in research and development, and the export of goods for further processing. Greece will benefit as it has a large defense bill.
The new method, for example, would have seen recession in 2013 shrink from 4 percent to just 0.3 percent, including the impact of the deflation, and turn the small GDP increase of 0.6 percent projected for this year to a robust 3.6 percent expansion.
Nothing like adding intangibles in the fluid, ever-changing definition of what constitutes an economy.
Naturally, the only reason for this artificial “boost” to the [Greek] economy which apparently can be any old arbitrary number agreed upon by a few accountants, and which always goes up post revision, never down, is to flatter Greek debt/GDP once again, if only very briefly, to satisfy any need for the Troika to justify moar bailouts to keep their own dream alive. Surely a few months later something else can be “added” to GDP making the Greek economic crisis disappear entirely… oh yeah apart from the record unemployment, delinquent loans, homelessness, suicides, and a rising nazi party…