LONDON: Britain’s economy suffered less than previously thought during the 2008-09 recession, new figures showed yesterday, although this partly reflects weaker growth just before the financial crisis.
The Office for National Statistics is revamping how it calculates the size of Britain’s economy, and yesterday it published new estimates of annual growth in gross domestic product from 1998 to 2009.
The biggest changes were for 2007 and 2009. For 2007, GDP growth was reduced to 2.4 percent from 3.4 percent, turning one of the strongest years of the decade into one that was average.
By contrast, in 2009, when the economy was thought to have shrunk by 5.2 percent, output in fact declined by only 4.1 percent. The year still remains by far the worst for Britain’s economy since at least World War Two.
Taking the changes together, GDP in 2009 now appears to be 5.2 percent lower than it was in 2007, compared with an earlier estimate of 6.0 percent lower, said Daniel Vernazza, an economist at UniCredit. “The new measures had the effect of smoothing the business cycle,” he said.
The revisions reflect European Union-wide changes in what is considered the best way to represent the size of the economy, for example, by treating corporate research as output rather than a cost.
Reuters
