Eurostat to revise EU's annual GDP figures higher
The European Union's statistics office will revise upwards the EU's annual gross domestic product figures by 2.4 percentage points when it switches to a new accounting standard in September, the European Commission said on Thursday (16 January).
The change will affect all past GDP figures and future data series, the EU's statistics agency Eurostat said.
The switch to the European System of Accounts 2010, replacing the old ESA 1995, is part of a worldwide move to a new accounting system called System of National Accounts 2008, already implemented in the United States last August.
"The weighted average impact on GDP of methodological changes is an increase of 2.4 percent of GDP, of which 1.9 (around 80 percent of the total impact) is due to the capitalisation of research and development," the European Commission said in a statement.
"The remaining methodological impact is due to different elements, the most important of which is capitalisation of military expenditure which represents 0.1 percentage point."
The statement said that in the United States the new standard led to an increase of 3.5 percent of GDP for years 2010 to 2012, with the capitalisation of research and development accounting for 2.5 percentage points.
The main changes introduced by the ESA 2010 are that research and development will be counted as investment rather than current expenditure. Spending on weapons systems will also be treated as investment.
The change will affect the treatment of pensions, insurance and goods sent abroad for processing, the statement said.
A table in the statement showed that Latvia, Lithuania, Hungary, Poland and Romania would have between zero and 1% more GDP growth as a result of the change.
Finland and Sweden can expect the highest revision of between 4 and 5% of GDP, Austria and Britain between 3 and 4, and Belgium, Denmark, Germany, France and the Netherlands of between 2 and 3% of GDP.
"The 2.4% is a provisional approximate estimate of the increase of the level of GDP which, more or less, will affect all years," said Louise Corselli-Nordblad of the Eurostat press office.
"In other words, all GDP figures for past recent years (and future years most probably) will be increased by approximately the same amount," she said.
"Finally, this means that changes between successive years will only be marginally affected. It should be noted that the estimated 2.4 percent does not refer to the euro area, but to the weighted average of the available member states," she said.