BRUSSELS Jan 17 The European Union will revise
upwards its members' economic growth data from September but the
change will have little effect on indicators that are relevant
to the EU's fiscal discipline regime, the European Commission
The upward revision of annual Gross Domestic Product data,
by an average of 2.4 percent, will be a result of a switch to a
new accounting standard that is being implemented around the
world. The United States adopted the standard in August.
The GDP revisions, which will go back at least to 1995,
will have an impact on countries' debt-to-GDP and budget deficit
to GDP ratios - both important for the EU as measures to keep
public finances in check, but not much.
"Any changes are likely to be very small - the revision does
not change materially the economic picture. One could not argue
that the picture of the fiscal situation in any country would
materially change," Commission spokesman Olivier Bailly said.
The main changes are that research and development will be
counted as investment rather than current expenditure. Spending
on weapons systems will also be treated as investment.
The new standard will also affect the treatment of pensions,
insurance and goods sent abroad for processing.
Latvia, Lithuania, Hungary, Poland and Romania are likely to
see an increase in GDP between zero and 1 percent as a result of
the switch, Finland and Sweden can expect the highest revision
of between 4 and 5 percent, Austria and Britain between 3 and 4,
and Belgium, Denmark, Germany, France and the Netherlands of
between 2 and 3 percent of GDP.
Assuming a 3 percent upward revision of 2013 data, Germany's
GDP last year will be 82 billion euros ($111 billion) higher
than the earlier expected 2,736 billion, bringing its debt to
GDP ratio to around 76 percent from around 80 percent, Reuters
Germany's budget deficit in 2013 will be 0.06 percent of GDP
rather than 0.1 percent. Germany's
The deficit and debt ratios matter, because if they breach
certain thresholds or do not diminish quickly enough, they can
trigger EU disciplinary action, called the Excessive Deficit
Procedure (EDP), which could end in fines for countries.
But Bailly said it was not possible to assess the impact of
the switch to the new system at this stage.
"It is inappropriate to comment on the potential impact on
debt and deficit until member states' data for the October EDP
notification is known," he said.
"The change in GDP is not the only factor that contributes
to changes in the EDP data. Changes or improvements of source
data, reclassification, amongst others, must also be taken into
consideration," he said.