Measuring GDP – Media statement from Government Statistician Geoff Bascand

Statistics New Zealand continually works with other countries and international agencies to improve the measurement of economic growth.

Government Statistician Geoff Bascand welcomed today's speech from Reserve Bank Governor Alan Bollard on calculating gross domestic product (GDP).

"Dr Bollard is quite right that comparing international statistics requires care. All economies are unique, and while international statistical standards exist to assist comparisons, there are inevitably some differences in measurement. We have confidence in our GDP figures but are always looking to update our methods."

Mr Bascand said the way Statistics NZ calculates GDP adheres to a set of international standards, but will move into line with the recently updated standards in 2014.

"Australia was an early adopter and is the only country so far that has moved to the new methods. Like other countries, we are implementing these changes now."

Mr Bascand said it is important to understand that while Statistics NZ has measurement changes planned to its GDP calculation, the current methods follow best practice.

"Like all of our statistics, we are always looking for ways to better assess GDP. We have several pieces of work underway that will make it easier to compare our GDP with that of Australia."

In his speech, the Governor had said that the Reserve Bank's very rough analysis suggested that the measurement differences could mean our GDP was understated by up to 10 percent.

"Based on Statistics NZ's detailed knowledge of measuring the economy, I am confident that any measured rise in GDP will be significantly less than that amount," Mr Bascand said.

"We will know the specific impact on GDP over the next two years as our changes come into effect."