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February 22nd 2006

EU GDP may be higher than expected

On paper, the collective economies of the European Union appear stagnant and pathetic, having grown by only 1.6% per year, from 1999-2004. However, it is important to note that when GDP figures are first released, they represent educated guesses, at best. After thorough re-calculation, Euro-area real GDP actually averaged 2.1% in the same time period. Meanwhile, Britain’s economy grew by 2.7% annually during those years, a figure that was revised upwards from 2.1%. As a result, it seems the current performance of the EU economies is being understated, which could provide a case for eventual Euro appreciation. The Economist reports:

On past experience, Europe’s statisticians should add half a percentage point to their first guesses of GDP growth. By also switching to American practices, they could boost growth even further.

Read More: A numbers racket

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Posted by Adam Kritzer | in Economic Indicators, Euro | No Comments »

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