HELSINKI (Reuters) – Finland’s third-quarter economic output rose 3.3% from the second quarter, Statistics Finland said on Friday, outstripping an earlier flash estimate of a rise of 2.6%.
The new estimate prompted Danske Bank chief economist Pasi Kuoppamaki to call it “an encouraging sign of the Finnish economy’s corona resilience”.
Statistic Finland also revised its estimate of the decline in Finnish second-quarter gross domestic product to 3.9% quarter-on-quarter, from a previous estimate of a 4.5% drop.
The earlier estimate of the second-quarter GDP drop caused by the COVID-19 pandemic was already the smallest among euro zone economies, according to estimates collected by Eurostat in September.
Year-on-year, Finland’s GDP fell 2.7% in the third quarter, Statistics Finland said.
Finland’s consumer confidence index recovered in November to -4.8 points but remained below its long-term average level of -1.8 points, Statistics Finland said.
“The corona epidemic has a clear impact on consumers’ sentiments, and thus the news on the coming vaccines have likely cheered up the expectations,” Kuoppamaki said in a statement.
Even so, the industry confidence indicator increased just one point from October’s figure, to -14 in November, well below its long-term average of +1. Production expectations for the coming months remained pessimistic among manufacturers, the Confederation of Finnish Industries said.
Economists simply cannot leave raw data alone. They tweek away with odd goals. Then, they make those tinkered numbers the official ones, locking in their perspective while ignoring and even hiding the actual data.
Compounding the problem is the media’s race to be first with “breaking news.” By quickly regurgitating the flawed numbers, they offer no added value. Moreover, the widespread dissemination of those numbers connotes acceptance and popularity. That, in turn, produces groupthink conjectures without having to lift a mental finger.
To understand abnormal times, like now, ignore the economists’ altered data.
The GDP data has been mistakenly and misleadingly described
The best way to understand what the GDP data is revealing is to start at the ground floor.
In the table below, the actual quarterly GDP amounts are the source of analysis. Actual means:
Not seasonally adjusted– Seasonal adjustment only works for normal times. In abnormal ones like now, increasing or decreasing actual numbers alters reality
Not annualized– Annualizing monthly or quarterly numbers is popular with economists, but can be highly misleading to everybody else. Unfortunately, the media spreads the data about. For example, in The Wall Street Journal (October 30), the front-page article about GDP included a graph of annualized, fully adjusted quarterly numbers. It labeled the two latest quarters as $17.3T (2nd quarter) and $18.58T (3rd quarter). How are those numbers derived? By multiplying the fully adjusted quarterly numbers by 4! So, why do that? Because economists are used to thinking in annual terms. The media should ignore that preference and report what everybody else thinks when they see, “Third quarter = $xxxT.”
Not inflation adjusted – Like seasonal adjustment, inflation adjustment during recessionary times can be flawed. Moreover, for investors, analyses using GDP growth often include non-inflation adjusted data like sales, earnings and investment returns. (And remember, economists never inflation-adjust those “zero” interest rates. Imagine the reaction if negative “real” returns were widely known and understood by savers and investors.)
However, that’s not the worst of it. The WSJ‘s footnote is incomplete: “Seasonally [sic] and inflation adjusted at annual rates.” How is the inflation adjustment done? By revaluing the current GDP number in 2012 dollars! The “GDP implicit price deflator” for 2012 dollars is now 113.849, meaning the actual third quarter 2020 GDP amount of $5.318T is divided by that deflator, thereby reducing it by over 12% to $4,680T. That is nota real number. Clearly, The Wall Street Journal reporter and editor don’t understand that, so all the discussion and analysis is suspect.
What should have been done? Not what the Commerce Department reports. Their worked over numbers need to be reworked. If inflation adjustment is desired, it needs to start with the latest value being the actual amount, then applying the deflator backwards, putting everything in 2020 dollars. Of
Eradicating all barriers to girls’ development will be pivotal in post-COVID recovery and attainment of UN SDGs
Emerging economies that achieve 100% secondary school completion rates for girls by 2030 could see their GDP being boosted by an average of 10%, according to a new report by Citi Global Insights and Plan International.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201026005917/en/
The report,The Case for Holistic Investment in Girls – Improving Lives, Realizing Potential, Benefitting Everyone, reveals that a total investment of just $1.53 per day per girl in emerging economies would have a huge impact on countries’ overall economic potential.
More than 130 million girls worldwide were out of school before the COVID-19 crisis. According to UNESCO, over 11 million girls may not go back after the crisis.
Adolescent girls everywhere, but especially in developing economies, encounter barriers in accessing and completing quality education, becoming economically independent, participating in the labour force, and living a healthy life free from violence.
“COVID-19 recovery plans that prioritise investment in girls’ education and well-being will help communities and economies build back better and stronger,” said Anne-Birgitte Albrectsen, CEO of Plan International. “But importantly, this must be comprehensive investment not just in education itself, but in dismantling all the various barriers to girls’ empowerment, from child and early forced marriage to gender-based violence and early pregnancy. As we can see from this study, holistic investment in all areas of girls’ lives will result in increased GDP, a high return on investment for countries and a more just world.”
Even greater economic returns would materialise beyond 2030, thanks to the cumulative effects of the benefits, and taking into account the impact educating girls will also have on families and communities
“The special value of the collaboration between Citi and Plan International comes through bringing together the economic and social case, and presenting a solid multi-component investment case,” said Andrew Pitt, Global Head of Research Citi.
“Eradicating barriers to girls’ education and development may hold the key to achieving many of the UN Sustainable Development Goals,” he added.
This report brings together the diverse expertise of Citi Global Insights and Plan International and features three key components:
a deep dive into the complex barriers that adolescent girls face, and what interventions are required to overcome them;
an original economic analysis of the potential costs of an intervention package and the economic benefits that could be achieved through this; and
recommendations on how different sectors can come together to effectively tackle the barriers that are holding adolescent girls back.
A major challenge to research over the years has been a lack of high-quality and inclusive data. Citi and Plan International have partnered to address this crucial knowledge gap, creating one of the most holistic data sets yet on the economic and social benefits of investing in adolescent girls and young women.
The UN has encouraged the development of collaboration between the private sector, the public sector,