I have long considered ABS inflation statistics to be an underestimate of the true situation. A major implication of this is that the reported Australian GDP/GDI growth rates are overestimated. Using Roy Morgan Researchs inflationary expectations survey data as the proxy for the true inflation rate, I recalculated the Australian GDI and GDI per capita in terms of 2010 dollars (the GDI is theoretically synonymous with the GDP). In the first quarter of 2012, the real GDI generated in the previous twelve months was approx. $1.415 trillion. In the third quarter of 2013, the real GDI generated in the previous twelve months was approx. $1.345 trillion. In other words, the real 12-month GDI declined by approx. $70 billion, or 4.93%, in one-and-a-half years. The decline in the 12-month GDI has been consistent and substantial. In other words, the Australian economy has been in recession since at least the first quarter of 2012. In the same period, the 12-month GDI per capita declined from $62,609 in the first quarter of 2012 to $58,154 in the third quarter of 2013. This $4,455 decline translates into a 7.12 percent decline in the GDI per capita.
Posted on: Thu, 06 Mar 2014 05:22:43 +0000
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