Some characteristics and shortcomings of quarterly gross domestic product estimates in South Africa
From the seventeenth century attempts were made to estimate national economies. The development of the theory and practice of national accounts gained momentum during the 1940's. Under the auspices of the United Nations (UN) and the Organisation for Economic Co-operation and Development (OECD) National Accounts were further developed and culminated in the publication of the 1953 System of National Accounts (SNA). This was followed by the 1968 SNA and in 1993 the revised edition of the international System of National Accounts was published. An aggregate of the SNA such as GDP is used for monitoring and developing of economic policies. Although important, it is also necessary to get an overview of quarterly gross domestic product estimates. The aim of the study is therefore to refer to some shortcomings and characteristics of quarterly gross domestic product estimates. The research methodology for the study was a literary investigation. Published materials on the field of national accounts are limited and even more restricted when the emphasis is moved to quarterly national accounts. In general the sources used for the study are from international agencies dealing with the compilation of national accounts. These sources are based on the primary source namely, the SNA93, which forms the base for national accounts estimates in general. Although quarterly gross domestic product estimates are widely use for, inter alia, economic growth rate, an early indicator of turning points in economic development and for business cycle analysis, these estimates do have some shortcomings. These shortcomings are for example the reliability of the estimates and that quarterly gross domestic product estimates are not a measurement of welfare. Despite these shortcomings, quarterly gross domestic product estimates are crucial for economic planning and decision making.
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