Actual economic growth may be lower than GDP figures

The economic growth may have been lower than the almost five percent recorded by the National Government, an economist said.

"Economic growth may have been lower than indicated by the gross domestic product (GDP) statistics," Felipe Medalla of the Foundation for Economic Freedom said in a recent conference.

This, he said is suggested by the three percentage points discrepancy between the growth rate and the population’s ability to buy basic goods.

According to Medalla, for the first two quarters of the year, the government indicated a five-percent to six-percent growth in the economy. However, the people’s purchasing power had only grown by three percent.

Purchasing power is the amount money can buy while the GDP of a country is defined as the market value of all final goods and services produced within it in a given period of time.

"Probably the country is not really growing five to six percent… GDP numbers can actually be worse," the economist said. However, he was quick to note that the discrepancy should not be taken as an attempt to mislead the public.

The latest GDP figure showed a growth of only 4.8 percent for the third quarter.

"We are simply not investing enough in statistics. Actually we are not investing enough, period," Medalla stressed.

Statistics show that starting 2003, both the GDP and the gross national product, which is GDP plus inflows from overseas, have been growing. "GDP growth was much higher since 2003," Medalla said.

In spite of this, Social Weather Stations (SWS) surveys reflect that for the same year 2003, hunger started to rise. For 2003, only five percent of the population considered themselves hungry.

The numbers shot up to double digits as of third quarter this year to 17 percent of the total households. The latest figures likewise stated that 12.3 percent consider themselves moderately hungry while close to five percent feel severe hunger.

– Ma. Elisa P. Osorio

Another disturbing factor is the incidence of poverty. According to the data gathered by the SWS from Sept. 24 to Oct. 24 this year, over half of the population considered themselves poor. Self-rated poverty has started to decline in 2002 but again began to increase during the second half of 2005.