Inaccuracies in calculations based on NEP
“T hat takes the biscuit!” one wants to say when calculation errors are made in the New Economy Program (NEP), which was announced last week.
Some of the calculations based on data are so wrong that they bring us to our knees. What we mean by these mistakes is the growth and the dollar rate forecast for the second half of the year.
The GDP growth rate over the year, according to the program, is estimated at 3.8 percent according to fixed prices. The rate we need to calculate is this: As we know the ratio over the first six months, how much should we grow over the last six months so that the annual rate becomes 3.8 percent? When making this calculation, starting from the ratios is an inconceivable mistake. The calculation is done from the absolute value and from the end to the beginning.
Total GDP of the last year was TRY 1.69 trillion. Based on the NEP forecast, the size is expected to increase by 3.8 percent to TRY 1.76 trillion. Economic output in the first half of this year was TRY 826.2 billion, which means for the second half, we need a GDP of TRY 931.8 billion to meet the NEP’s forecasts.
The figure we will compare with the TRY 931.8 billion is the GDP size in the second half of last year, which was TRY 915.2 billion. The rate of increase is 1.8 percent, 1.78 percent to more accurate. That’s the right calculation. There are people that calculate the second half as 1.3 percent and 1.4 percent by looking at the 3.8 percent annual growth expectation. We don’t know exactly how they arrive at these rates, but we have an idea. They are doing it this way:
3.8 percent growth is projected for the whole year. If it is assumed that 3.8 growth is achieved in a sixmonth period without going into the composite account, i.e. 3.8 x 2 = 7.6, then the growth rate of 6.3 percent in the first half is subtracted from that and 1.3 percent is reached. If the same approach is adopted over the compound ratio, 7.7 percent is reached instead of 7.6 percent and the difference then becomes 1.4 percent.
Those who make these calculations by applying these logic errors could not even pass a single year at economy faculties.