A technical feature of the chain volume measures was that for earlier years, the GDP components in real terms might not add up to the GDP aggregate, owing to the fact that the price weights were updated every year. However, it should be noted that this non-additivity element arose from purely mathematical reasons; the discrepancy should not be interpreted as an indication of the quality of the GDP measure.
The current price GDP is not affected by the new method for calculating the volume measure of GDP, though the estimates for the recent years are subject to revision due to regular updating of data sources and incorporation of latest benchmark data, in particular the 2004/05 Household Expenditure Survey. The level of the current price GDP was revised slightly upwards by an average of 0.1% for the period of 2000 to 2006.
For the GDP deflator which is derived implicitly by dividing the current price estimate of GDP by the volume estimate of GDP, the revision to the year-on-year changes was similar in magnitude, but opposite in direction, to that for the volume measure of GDP.
A government spokesman remarked that an increasing number of statistically advanced economies had changed over from the constant price measures to the chain volume measures of GDP. In implementing the new calculation method for the volume measure of GDP, it provided a better measure of the real growth rate of GDP and enhanced the international comparability of Hong Kong's GDP statistics.
Census and Statistics Department
marketing@alchempro.com
