ABS Response to 'When official numbers belie the real story' (Australian Financial Review, 11 June, pg 63)

ABS Response to 'When official numbers belie the real story' (Australian Financial Review, 11 June, pg 63)

Alan Hall has provided an insightful analysis of economic conditions in Australia in the article "When Official Numbers Belie the Real Story" published in the AFR of 11 June 2009.

The Australian Bureau of Statistics compiles national accounts for Australia according to international standards and the accounts are recognised as being amongst the best in the world. They are widely understood and used by policy makers and analysts in Australia and around the world. The headline measure, following the standards, is the volume of economic production, GDP. This volume measure is calculated by removing the direct impact of price changes.

Changes in relative prices of exports and imports, shown in the terms of trade, do not have a direct impact on the volume measure of GDP, but do impact on incomes. These impacts are shown in the Australian national accounts in the measures of real gross domestic income (RGDI) and real net national disposable income (RNNDI).

All three measures, GDP, RGDI and RNNDI are published quarterly and Mr Hall has made good use of these high quality measures in his analysis.

The claim that any of these measures is inaccurate is incorrect and is not supported by Mr Hall's analysis. He appears to disagree with the choice of GDP as the headline measure rather than provide any evidence of inaccuracy of any of the measures.

The headline should perhaps have been "When Official Numbers Reveal Real Story".

Peter Harper
Acting Australian Statistician
Australian Bureau of Statistics