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Cannabis/prostitution included in GDP calculations

  1. Posted on Monday 16 November 2009 - 09:02
    Mernat
    Image of Mernat
    Mernat Mafirakurewa
    Johannesburg - Cannabis farming and prostitution have been included in future calculations of the Gross Domestic Product (GDP) for South Africa.
    Statistics South Africa has decided to include illegal and underground economies, when calculating the country's gross domestic product.
    According to Statistics South Africa though cannabis farming is illegal it will now form part of the agriculture sector weighting. Prostitution falls within the personal services sector.
    It is understood the inclusion of illegal economies into GDP is already a global practice.
    "Theoretically it is absolutely correct to include as much of the production in the economy as possible when you calculate GDP growth, so theoretically there is nothing wrong with including things like dagga sales in your economic statistics," Efficient Group Economist Dawie Roodt told iafrica.com
    Analysts believe the inclusion of the hidden economy would boost the country’s GDP by over 100 billion Rand.
    The base year against which economic growth is measured will also move from 2000 to 2005.
    All these adjustments will apply to the GDP and economic growth figures for the first quarter of 2002 to the third quarter of 2009.
    End

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