Die Welt: Eurostat changes the method of calculating the GDP

Eurostat plans to change the method of calculating the annual GDP of countries in the European Union an article in the «Die Welt» newspaper says.

Specifically, by next September Eurostat is preparing to upgrade the annual data for the European GDP, adopting the European System of Accounts 2010, which already since last year has been introduced in the U.S. as well, replacing the ESA 1995.

According to «Die Welt», the main change of the new system lies in the inclusion of a state’s investments in the measurement of GDP.

"In the future, importance will be given to investments and not on current expenditures. For example, the armament expenditure in the future will be considered as investments. The change in the U.S. led to an overnight GDP growth of about 3%, while at the same time the proportion of public debt has fallen by 2%. In Europe, the benefit would be somewhat less," the article states and talks about the rise of the average EU GDP by 2.4% under the new methodological modifications.

"This will bring changes even among the Member-States. So, for example, the rise in many Eastern European countries (Romania, Latvia and Hungary) will be less than 1%, in contrast to Finland or Sweden where it will range between 4 and 5%. For Germany, the benefit is calculated at 3% and the country's GDP would thus grow by about 82 billion euros," the article notes, and says that in this way the countries will be able to reduce their debt.
 
According to the author, in Italy it will be reduced from 133.6 to 131%, in Belgium from 191 to 100%, but for Greece the impact on GDP and public debt has not yet been calculated.