China Youth Network, Beijing, July 15 (Intern Reporter Yang Xiaolin) The State Council Information Office held a press conference at 10 a.m. Sheng Laiyun, spokesperson of the National Bureau of Statistics, introduced the national economy operation in the first half of 2015. At the press conference, in response to the problem that the GDP deflating index was accused of being low, Sheng Laiyun responded that this was a difference in understanding caused by different accounting methods.
Sheng Laiyun said that the GDP deflating index is relatively low, and the situation of overestimating the data on GDP growth does not exist. The reason why some analysts have this view is because they have insufficient understanding of the accounting method.
He explained this: There are two main methods for accounting for GDP, the expenditure method and the production method.
Many Western countries use the expenditure method when accounting for GDP, which divides GDP into three parts from the perspective of expenditure - final consumption expenditure, fixed capital formation, and net exports. These three parts are deducted using different price indices, among which imports and exports are basically deducted using the price indices of imported and exported commodities. Therefore, the impact of these price indexes on the deflating index on the accounting method is easy to observe.
The GDP accounting method adopted by my country is to calculate using the production method, and divide GDP into the added value of the primary, secondary and tertiary industries from the perspective of industry. The secondary industries can be divided into the added value of industry and construction, and the tertiary industries can be divided into the added value of finance, transportation and other services, and their added value is calculated separately and then summed up. When deducting prices, deduct different indexes from the perspective of final product and intermediate investment. For example, when calculating the total industrial output, the industrial ex-factory price index can be used to deduct it, and when industrial intermediate inputs, the price index of the purchased products can be used to deduct it. Some imported goods are used as intermediate inputs, and some are used as consumer goods. Therefore, when deducting, they are actually implicitly implicitly in the consumer price index, industrial product ex-factory price index and fixed product price index.
Therefore, Sheng Laiyun emphasized that we cannot apply and judge the logic of production method deduction according to a kind of price deduction logic of the expenditure method. There is a view that we underestimate the deflating index because we have not deducted the prices of imported goods as the prices of imported goods have dropped significantly this year. In fact, when we use the production method to calculate, we have deducted the relevant deductions through a series of price indices such as the industrial ex-factory price and purchase price used to reflect intermediate inputs and final outputs. Therefore, the deflating index is considered to be low because the understanding of China's accounting methods and processes is not very good, and a logic of the expenditure method has been misused.
[Noun Explanation]
GDP deflator: Average price index (GDP deflator, also translated as GDP deflator, GDP average price index, or implicit price deflator for GDP), is the ratio of nominal GDP to real GDP, and expresses the proportional relationship between money supply and money demand. The calculation method is: nominal GDP/real GDP*100%.
Nominal GDP: also known as monetary GDP, is the market value of all final products calculated using the prices of the products and services in the year. There can be two reasons for changes in nominal GDP: one is changes in actual output, and the other is changes in price. In other words, changes in nominal GDP reflect both changes in actual output and price changes.
Actual GDP: It is the market value of all final products in that year calculated using the price of a certain year as the base period. It measures changes in product output in the economy in two different periods, and calculates the value of all products generated in the two periods at different prices or constant amounts.
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