UPDATE 2-China revises up nominal 2018 GDP, moves step closer to doubling size of economy
05:43
(Adds analyst comment, quotes)
BEIJING, Nov 22 (Reuters) - China on Friday revised up its
nominal 2018 gross domestic product (GDP) by 2.1% to 91.93
trillion yuan ($13.08 trillion), keeping it on track to
achieving its goal of doubling the size of its economy by 2020
from 2010.
The revisions showed that the services sector contributed
more to GDP in 2018 than the original data had indicated, the
National Bureau of Statistics said in a statement.
The change in the size of 2018 GDP will not significantly
influence the calculation for the 2019 growth rate, the
statistics bureau said.
The world's second-biggest economy is growing at its slowest
pace in almost three decades, pressured in part by a trade war
with the United States.
China routinely revises its annual GDP data. Days before GDP
data for 2018 was released in January, the statistics bureau cut
its final 2017 growth figure to 6.8% from 6.9%.
China's fourth National Economic Census, released on
Wednesday, included "richer" data points that showed more
business entities and a bigger total asset base in 2018 than
assumed under earlier GDP estimates, Li Xiaochao, deputy head of
the statistics bureau, told Reuters earlier this week.
Revisions to historical GDP figures will also be made, Li
told reporters.
Nominal GDP includes changes in prices due to inflation, so
it is usually higher than adjusted, or real GDP.
MASSAGING NUMBERS TO HIT TARGETS?
Growth of about 6.2% is seen needed for the whole of this
year and the next to meet the Communist Party's longstanding
goal of doubling GDP and incomes in the decade to 2020.
Despite "NBS stressing that the current round of revisions
is the result of the census uncovering previously unrecorded
activity, it's hard to ignore the fact that it will also help
them meet official growth targets," said Julian Evans-Pritchard,
Senior China Economist at Capital Economics, in a note.
In previous revisions real growth has almost always been
revised upwards, he said.
Analysts say that without further information from the NBS,
it's hard to calculate the impact of the latest adjustments on
the 2018's real GDP or the GDP growth rate for that year.
But a rough estimate of an adjusted real GDP growth in 2018
might be 8.9%, compared to an original reading of 6.6%, said
Chaoping Zhu, Global Market Strategist at J.P. Morgan Asset
Management, in a note.
The government's target range for 2019 growth is 6%-6.5%.
The economy expanded 6.4% in the first quarter, 6.2% in the
second and 6.0% in the third - the weakest pace since 1992.
If the 2018 figure is revised up, the government might be
more tolerant of an economic slowdown next year and set a lower
growth goal in 2020, said Zhu.
As the deadline for doubling the size of the economy draws
nearer, it's become increasingly clear that the target was "too
ambitious," said Evans-Pritchard.
"Our research suggests that political pressure to meet
growth targets has encouraged the National Bureau of Statistics
(NBS) to massage the GDP deflator in recent years."
The GDP deflator is the ratio of nominal to real GDP.
In an email to Reuters, Louis Kuijs, head of Asia economics
at Oxford Economics, said he would not discount the possibility
of the NBS massaging the data. However, an upward revision by
the NBS is neither surprising nor unreasonable, he said, noting
that newly included sectors in statistical coverage tend to grow
quickly.
"Also, outside of China, revisions of the size of economies
are almost always upwards," he said.
A paper published by the U.S.-based Brookings Institution
earlier this year said China had overestimated nominal and real
growth rates by about 2 percentage points between 2008 and 2016.
($1 = 7.0283 Chinese yuan renminbi)
(Reporting by Gabriel Crossley; Editing by Kim Coghill & Shri
Navaratnam)
((Gabriel.Crossley@thomsonreuters.com; +86 10 5669 2127;))
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