Measuring GDP in Fragile States
& Jose Pablo Valdes Martinez
Published: December 2017
Gross Domestic Product (GDP) is central to measuring economic performance and productivity, and monitoring fiscal and monetary policies, as well as changes in poverty and shared prosperity. Compiling GDP in accordance with internationally agreed definitions and rules is a complex and data-intensive task, but it is especially challenging in fragile countries. Data are often lacking, of poor quality, or out of date. Much economic activity takes place outside the formal economy, and measuring real growth is more difficult for countries facing armed conflict or natural disasters. But fragile states need accurate measures of GDP, because their economic losses are commonly evaluated in terms of GDP prior to the design and implementation of any mitigation policies.