Real GDP now more reflective of prevailing conditions

Real GDP reflects the value of all goods and services produced by an economy in a given year, while removing the "price effect" - or adjusting for inflation.
Real GDP reflects the value of all goods and services produced by an economy in a given year, while removing the "price effect" - or adjusting for inflation.ST PHOTO: LIM YAOHUI

Singapore's real gross domestic product (GDP) is now reweighted annually instead of once every five years, in a move to make it more reflective of prevailing economic conditions, the Department of Statistics (DOS) said yesterday.

Real GDP reflects the value of all goods and services produced by an economy in a given year, while removing the "price effect" - or adjusting for inflation.

The relative price structures used in this calculation are now updated annually rather than once every five years.

"As the prices of goods and services change, the relative price weights of a particular year become less representative over time," said the DOS.

"It is therefore necessary to update the relative price weights to a more recent year periodically."

A version of this article appeared in the print edition of The Straits Times on May 22, 2019, with the headline 'Real GDP now more reflective of prevailing conditions'. Print Edition | Subscribe