News / National
UK based World Economics says Zimbabwe's economic data unusable
29 Nov 2023 at 07:32hrs | Views
UNITED KINGDOM-BASED economic researcher, World Economics, has rated the country's official gross domestic product (GDP) and population data as "unusable", a week after State media applauded the UK-based firm for saying Zimbabwe was now a US$66 billion economy.
About a week ago, World Economics reported that the official estimate for Zimbabwe's GDP was US$35 billion at the end of 2022 in purchasing power parity terms.
The firm said it had developed a database presenting GDP in purchasing power parity terms with added estimates for the size of the informal economy and adjustments for out-of-date GDP base year data. World Economics estimates Zimbabwe's GDP to be US$66 billion — 88% larger than official estimates. 2023 data is based on IMF (International Monetary Fund) growth rate estimates applied to World Economics GDP data."
This sparked debate on the authenticity of this figure as Treasury in the pre-budget meetings reported that the nominal GDP at market prices was ZWL$119,01 trillion, translating to US$20,8 billion. Nominal GDP is given at current prices, without adjustment for inflation.
Further, according to the IMF, the economy is valued at nearly US$33 billion.
However, World Economics put a disclaimer to its US$66 billion GDP valuation.
"Zimbabwe's GDP and population data are rated E, which equates to unusable for serious decision-making. The Zimbabwe Governance Index is also E rated, meaning the government is untrustworthy, and may have interfered in the production of government economic and demographic data," World Economics said.
"Hence, GDP size and growth data and all demographic data are suspect and unreliable, as is all data (such as GDP per capita, debt per capita, etc) based on economic data produced by government."
The mission of the UK researcher is to provide clear guidance on what is good usable data and what is likely to mislead by augmenting official usable data with regular quarterly surveys enabling greater data integrity.
About a week ago, World Economics reported that the official estimate for Zimbabwe's GDP was US$35 billion at the end of 2022 in purchasing power parity terms.
The firm said it had developed a database presenting GDP in purchasing power parity terms with added estimates for the size of the informal economy and adjustments for out-of-date GDP base year data. World Economics estimates Zimbabwe's GDP to be US$66 billion — 88% larger than official estimates. 2023 data is based on IMF (International Monetary Fund) growth rate estimates applied to World Economics GDP data."
This sparked debate on the authenticity of this figure as Treasury in the pre-budget meetings reported that the nominal GDP at market prices was ZWL$119,01 trillion, translating to US$20,8 billion. Nominal GDP is given at current prices, without adjustment for inflation.
However, World Economics put a disclaimer to its US$66 billion GDP valuation.
"Zimbabwe's GDP and population data are rated E, which equates to unusable for serious decision-making. The Zimbabwe Governance Index is also E rated, meaning the government is untrustworthy, and may have interfered in the production of government economic and demographic data," World Economics said.
"Hence, GDP size and growth data and all demographic data are suspect and unreliable, as is all data (such as GDP per capita, debt per capita, etc) based on economic data produced by government."
The mission of the UK researcher is to provide clear guidance on what is good usable data and what is likely to mislead by augmenting official usable data with regular quarterly surveys enabling greater data integrity.
Source - newsday
