Wednesday 13 July 2022

A Mini Recovery or a Mirage?

A country's Gross Domestic Product (GDP) is the sum contribution made by all its goods and services to its economy. Some people have become excited by a report from the Office for National Statistics (ONS), indicating that the UK's economy 'unexpectedly' returned to growth in May (https://www.theguardian.com/business/2022/jul/13/uk-economy-returns-to-growth-thanks-to-holiday-boom-and-gp-visits). May's ONS-assessed increase, of 0.5%, was in marked contrast with GDP declines, earlier in 2022. A large proportion of May's 'growth' was, however, fuelled by a boom in holiday bookings and a substantial rise in people getting appointments to see their NHS General Practioner (GP). The holiday bookings boom, seems linked to substantial numbers of people cashing in their Covid pandemic savings to buy 'deserved' holidays. This may not last as a) such savings may quickly run out, given the weakness of the pound; b) UK airports and airlines don't seem to have the capacity to deal with even the current increase in traffic and c) some folk might start to realise that, taking flights is somewhat antisocial, given 'greenhouse gas' production's role in global heating (I'm not holding my breath on 'c'!). The 'economic contribution', made by the increasing numbers of visits to GPs, is an even weaker indicator of economic activity. People are finally getting to see their GPs, after the privations associated with the Covid19 pandemic. As, however, a visit to a UK GP has no market price, statisticians estimate (guess?) its contribution to GDP, simply by counting the number of visits. Presumably, GP visits will also decline, as the current backlog is cleared. May's figure is clearly light-years away from constituting an 'economic miracle'.

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