The Industrial Production Index, IPI, is a source statistic for quarterly GDP calculations but it is not obvious to what extent the error in the IPI during 2011 impacts on published GDP results for the respective quarters.
More information on the error in Industrial production index
GDP (Gross Domestic Product) is calculated primarily in two different ways. GDP according to the production approach is calculated as the sum of value added within the respective industry and the government. GDP according to the expenditure approach is calculated as the sum of all expenditure for consumption, capital formation and exports minus imports. These two calculations result in more or less different results. To arrive at a final GDP estimate, a reconciliation is required involving adjustments of the production approach and/or the expenditure approach.
The conditions for the reconciliation of the respective quarter during 2011 were different and the assessment of the impact from the IPI error varies accordingly. It is likely that the impact on the final estimate for the first quarter was negligible. However, for the second quarter it is likely that the error has contributed to a higher estimate by close to 0.2 percentage points on an annual basis. For the two last quarters of 2011 the conditions for the reconciliation were such that it is unclear to what extent the error affected the estimates.
Over the next few days Statistics Sweden will analyse whether the error should lead to a correction. At the next scheduled release on May 30, in addition to the first estimates for the first quarter 2012, revised GDP estimates for all four quarters 2011 are also provided. Our view is that this error does not alter the general picture of economic developments during 2011. Given the uncertainty in the statistics, it is doubtful whether an earlier correction is warranted.