Reuters - Video

Edition: US | UK | IN | CN | JP

Finance Videos

Sex, drugs and GDP

Friday, May 30, 2014 - 02:12

May 30 - The phrase 'economically active' takes on new meaning as the UK stats office reveals illegal drugs and sexual services are worth £10 billion a year to the British economy - or 0.7% of GDP. Joanna Partridge reports.

▲ Hide Transcript

View Transcript

Out of the shadows - and on to public accounts. What sex and drugs are worth to the British economy has been revealed for the first time by statisticians. Sales of illegal drugs and sexual services add a whopping £10 billion to economic activity each year, according to the Office for National Statistics. That equates to just under 1% of total economic output. That's almost the same as what agriculture and publishing bring to UK GDP. And roughly double the economic activity produced by air transport - both passenger and freight flights. The figures will appear along with other black-market activity on Britain's accounts from September. They're expected to add 4 - 5% to the current level of GDP as new businesses are added to the economy. Accurately estimating Britons' consumption of drugs and prostitution is especially tricky. While prostitution is legal in Britain, advertising sex, brothels and pimps are not. For some figures, the ONS turned to Dutch research of the number of clients prostitutes have per week, and prices came from a website with client reviews. That could be problematic, says Simon Derrick from Bank of NY Mellon. SOUNDBITE: Simon Derrick, Chief Currency Strategist, Bank of NY Mellon, saying (English): "If we're going to include these numbers in GDP then quite clearly they need to be as accurate as possible, so I think it's about the collection of the data and the quality of the statistics." Britain is moving in line with new EU accounting rules. Italy's already announced it would also record the value of all activities that generate income. That could be quite substantial - in the home of the Mafia. The Bank of Italy estimates the criminal economy there accounts for approximately 10% of national GDP. Chris Beauchamp is from IG. SOUNDBITE: Chris Beauchamp, Market analyst, IG, saying (English): "An attempt to accurately reflect what goes on in an economy. The criticisms of GDP as an economic measure are widespread and well-known, but including the wider activities, even the illegal activities, just give you a better picture of what goes on in a national economy. Anything which makes GDP clearer as a measure will be very much welcomed by financial markets." As many of Europe's economies continue to struggle with sluggish growth, few would reject anything which boosts their GDP figures.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Sex, drugs and GDP

Friday, May 30, 2014 - 02:12