GDP grows 2.7 per cent

Provisional estimates for the third quarter of 2006 indicate a GDP growth of 5.7 per cent at current prices and 2.7 per cent at constant prices over the same period last year, the National Statistics Office said yesterday.

GDP (Gross Domestic Product) is an estimate of the value of goods and services produced in the economy over a period of time.

The GDP is estimated at current prices using the production approach, aggregating the output of the various productive sectors net of the cost of intermediate inputs.

The expenditure approach is reconciled with the production approach and used to derive an estimate of GDP at constant prices, in other words, excluding the effects of price inflation on market prices.

The income approach shows how GDP at market prices is distributed into compensation of employees, operating surpluses of enterprises and taxes on production and imports net of subsidies.

GDP for the third quarter of 2006 is estimated at Lm550.9 million, up by 5.7 per cent over the same period last year. This growth in value added was generated primarily by the community, social and personal services sector as well as by the financial intermediation sector. Other contributions to the growth in value added during the period included the manufacturing and construction sectors. Higher intermediate costs, mainly on account of rising oil prices, restrained the development in value added across other industries.

The expenditure approach indicates that GDP at constant prices rose by 2.7 per cent. Total final consumption expenditure by households, by non-profit institutions serving households and by general government went up 1.2 per cent, 1.5 per cent and 3.1 per cent respectively. Gross capital formation measured at constant prices declined by two per cent during the reference period. Real exports rose by six per cent while real imports increased by 3.8 per cent.

The annual increase in GDP at current prices, amounting to Lm29.9 million, is estimated to have been distributed into a Lm5.2 million rise in compensation of employees, a Lm21.2 million increase in gross operating surpluses of enterprises, and a Lm3.5 million growth in net taxation on production and imports.

Considering the effects of income and taxation paid and received by residents to and from the rest of the world, Gross National Income (GNI) at market prices is estimated at Lm539.7 million for the third quarter, up by 6.6 per cent over the same period last year.