Reply #33: Oldest profession boosts Greek output [View All]

[Ghost Dog]

http://www.ft.com/cms/s/d2b246a2-4f15-11db-b600-0000779e2340.html

Greece suddenly found itself 25 per cent richer on Thursday after a surprise upward revision of its gross domestic product, the fruit of a change to national accounts designed to capture better a fast-growing service sector – including parts of the black economy such as prostitution and money laundering.

The country’s newfound wealth raised eyebrows in Brussels, because it means Greece will find it easier to bring its budget deficit below the European Union’s 3 per cent of GDP ceiling.

Having previously been found guilty of underestimating the size of its budget deficit, Greece’s new GDP calculation will be scrutinised by Eurostat, the EU statistics agency.

“Member states revise their figures regularly, but this is quite a significant revision and needs to be checked,” said a spokeswoman for Joaquín Almunia, EU monetary affairs commissioner. Mr Almunia’s aides admit they were surprised by Athens’ announcement, which was not discussed in advance with Brussels or other EU finance ministers. Typically, such upward GDP revisions are of between 1-2 per cent, although Greece and Italy have each previously made big revisions.

However, Greece’s finance minister defended the 25 per cent upward revision of annual gross domestic product since 2000 as the result of “improved measurement” of a fast-growing services sector.

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