Central Bank governor Hector Valdez Albizu says that the revision of the base year for the analysis of the National Accounts from 1991 to 2007 shows the GDP is undervalued by more than half a point, or more than RD$10 billion. Valdez said that 2007 was chosen because it is regarded as a year of recovery and macroeconomic stability. He said that the Dominican Republic is now the Latin American country with the most up-to-date base year, after Chile that is using 2008.
With the use of the new base year the production of goods in the DR now represents 32.34% of GDP, down from 44.9% when the base year was 1991. Another significant result is the behavior of exports of goods and services that shows only a six-fold growth over the period.
While presenting the data, Olga Diaz, economic advisor to the Central Bank governor warned the authorities to reorient the economic model to promote and encourage export activities. She said there has been a reduction in agriculture and manufacturing and the services sector continues to increase its participation of GDP. Services participation increased from 48% in 1991 to 59.4% in 2007.
Central Bank governor Valdez stressed that with the statistical analysis of the results using base year 2007 compared to 1991 one can observe that as a result of the economic growth of the past 16 years the size of the economy has increased 10 times, going from a GDP of RD$123.43 billion (1991) to one of RD$1.37 trillion (2007), a percentage growth of 1,013%.
The analysis of the evolution of the GDP from the standpoint of spending, nevertheless, shows significant changes in its main components, such as the case of the behavior of public consumption with a growth way beyond that observed overall in the economy. This increased 30 times going from RD$3.97 billion in 1991 to RD$123.85 billion in 2007.
The Central Bank said that the National Accounts now are taking into account, in addition to goods and services, or what was produced in the country, who produces them. In that sense institutional accounts are included, classified by non-financial corporations, financial corporations, government and households, including non-profit institutions that serve households. In addition, another account The Rest of the World measures transactions abroad using as source the Balance of Payments.
Worldwide the base year is periodically changed for meaningful analysis of structural changes in the economy in real terms. The base year for major economic indicators such as the Consumer Price Index, Real Gross Domestic Product and the Producer Price Index.
This is the third base year change for the Dominican Republic since 1965 when the first national accounts were prepared. The other changes occurred in 1977 with the use of 1970 replacing 1962 and in 1993 with the use of 1991 instead of 1970.
www.hoy.com.do/economia/2012/11/8/453982/Valdez-defiende-medicion-del-PIB
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