PWC: growth of GDP ceases to be an indicator of the state of the global economy

PWC: growth of GDP ceases to be an indicator of the state of the global economy

MOSCOW, December 30. Growth in the gross domestic product (GDP), which is used as a basic for assessing the state of the economy, may soon lose its importance in the development of new technologies and e-Commerce, said in an interview with the head of the consulting and audit company PwC International Dennis nally.

Governments, Central banks and international financial institutions is used in reports and forecasts, this indicator, which measures the total value of all goods and services produced in the economy. The term “GDP growth” is often used synonymously with economic growth.

According to Nelly, this figure does not account for value added created in the implementation of electronic transactions and is no longer a valid indicator of economic efficiency.

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“In recent years we talk a lot about whether there are other adequate ways, which reflect the progress in the economy with regard to electronic data interchange and other means of value creation,” said Nelly.

The international monetary Fund (IMF) forecasts a decline of Russia’s GDP by 3.8% in 2015 and 0.6% in 2016. For the global economy overall, the IMF forecasts growth of 3.3% this year and 3.8% in 2016.

A number of countries have set goals for GDP growth, in particular, at the beginning of 2000-ies Russia aspired to a doubling of GDP required growth rate at 7-8% per year. “Group of twenty”, which includes the largest developed and developing economies of the world, one of the main goals sets the achievement of sustainable growth.

A debate that is just beginning

PWC, one of the four largest audit companies in the world, believe that the world economy will grow 2.5% in 2015. According to Nelly, in 2016 the situation will not change much, which was confirmed by a survey of 700 managers of the largest companies in the world, the company has undertaken for the summit of leaders of the countries of the Asia-Pacific economic cooperation (APEC). In the survey the level of confidence of managers has decreased in 2 times in comparison with 2014.

“We are in a period of weak growth and will stay in it in the near future,” said Nelly.

However, Nelly said growth opportunities in technology sectors, which dramatically increases efficiency and productivity. According to the expert, these changes are not taken into account modern methods of assessing the state of the economy.

“Low GDP growth rates no doubt are the result of bad economic situation in the world. However, whether the old method of calculating GDP reflects the creation of value in the modern world? We believe that there is no,” said Nelly.

Changes in the trading sphere

In his view, large-scale changes occur primarily in the sphere of global trade, which is increasingly carried out in electronic form. The growth performance of electronic transactions, as well as qualitative changes in the economy not included in the measurement of GDP growth. As an example of a company that showed a sharp increase in efficiency in recent years, Nelly called the Chinese giant e-Commerce Alibaba, owned by the billionaire Jack MA.

Evaluation of the analytical Agency eMarketer, the forecasted growth in the world of online trading in 2015 will make up 17.7% to $1.67 trillion, in 2014 it was estimated at 20.2%. And if the products and services provided via the Internet, in 2015 amounted, according to preliminary data, 7.4% of global retailers, in 2019 will reach 12.8 per cent ($3.58 billion ).

PWC believe that the search for new forms of evaluation of the economy will occupy a Central place in economic discussions in the near future. As possible alternatives to the GDP growth of Nellie called the rate of labor productivity, which in his opinion requires modification in light of technological advances.

“It’s possible that the economy is not growing, because we have no proper ways to measure. However, at the same time, the economy becomes more efficient because we use new technology. How to accommodate the growth of the efficiency taking into account technological advances? We believe that this is a very interesting discussion that is just beginning,” said Nelly.