By Al Edwards, Business co-ordinatorTHE WORLD Bank has said that "a number of factors suggest that Jamaica's gross domestic product (GDP) growth is underestimated", and the implication is that "real GDP growth from 1990 to 2000 averaged almost 1-3 per cent per year".
In its recently released 220-page country report on Jamaica titled, Jamaica: The Road to Sustained Growth, the World Bank says one indicator that GDP growth may be underestimated is the "large difference" between consumption growth in the GDP accounts and annual household Survey of Living Conditions.
HOUSEHOLD SURVEY
Between 1995 and 2001, estimates of real per capita consumption from the household survey grew by 3.5 per cent per year, while real per capita consumption in the GDP accounts reportedly declined by 1.5 per cent per year.
But the Bank says: "Corrobora-ting evidence for underestimation is the decline in poverty in the latter half of the 1990s".
Poverty in Jamaica declined from an estimated 27.5 per cent of the population in 1995 to about 17 per cent in 1999, the World Bank notes, observing also that "vulnerability to poverty appears also to be somewhat less in 2000 than in 1993". The Bank says that another possible explanation for the underestimation of Jamaica's real growth rate is the fact that it is difficult to estimate the informal and underground economy.
