PKR director of strategy Rafizi Ramli said the much-boasted estimation by Prime Minister Najib Abdul Razak that the Malaysian Gross Domestic Product (GDP) will surpass the one trillion ringgit milestone in 2013 is merely a “mathematics trick”.
The accountant-turned-politician told a forum last night that the difference in the nominal GDP figure for 2013 as compared to last year’s was due to the use of a different base year, resulting in vastly differing figures.
The nominal value of the 2013 GDP was measured using the constant prices of 2005, while the 2012 GDP was measured in the constant prices of 2000, he explained.
“When we revise our base year from 2000 to 2005, the nominal 2013 GDP will increase by RM60 billion. If we still use 2000 as base year, the figure would be about RM980 billion,” Rafizi (right) explained.
The revision of base year not only produced a higher nominal GDP, but also portrayed a lower deficit-to-GDP ratio of 4.0 percent because the estimated RM40 billion deficit in 2013 is a constant value regardless of base year, he claimed.
“If we take 2000 as base year, the deficit-to-GDP ratio would be higher than 4.0 percent, about 4.4 percent.”
Met after the forum, Rafizi elaborated to Malaysiakini that although there is no rule of the thumb on how often the base year should be revised, the revision in other countries is often done by an independent panel such as the budget committee in US.
“The question is why is Najib doing it now? It is certainly conspicuous,” he remarked.
The accountant-turned-politician told a forum last night that the difference in the nominal GDP figure for 2013 as compared to last year’s was due to the use of a different base year, resulting in vastly differing figures.
The nominal value of the 2013 GDP was measured using the constant prices of 2005, while the 2012 GDP was measured in the constant prices of 2000, he explained.“When we revise our base year from 2000 to 2005, the nominal 2013 GDP will increase by RM60 billion. If we still use 2000 as base year, the figure would be about RM980 billion,” Rafizi (right) explained.
The revision of base year not only produced a higher nominal GDP, but also portrayed a lower deficit-to-GDP ratio of 4.0 percent because the estimated RM40 billion deficit in 2013 is a constant value regardless of base year, he claimed.
“If we take 2000 as base year, the deficit-to-GDP ratio would be higher than 4.0 percent, about 4.4 percent.”
Met after the forum, Rafizi elaborated to Malaysiakini that although there is no rule of the thumb on how often the base year should be revised, the revision in other countries is often done by an independent panel such as the budget committee in US.
“The question is why is Najib doing it now? It is certainly conspicuous,” he remarked.
The forum organised by Pakatan also featured political researcher Ong Kian Ming, who has just joined DAP, and PAS’ economist Dzulkefly Ahmad as speakers.
[More to follow]
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