U.S. Dept. of Commerce looks to include P.R. stats in national GDP numbers
Representatives from the U.S. Department of Commerce’s Bureau of Economic Analysis will visit Puerto Rico later this month as part of ongoing efforts to steer the island toward improving methods of collecting and producing high-quality statistics about local economic activity.
During the visit, the agency will provide intensive training and transfer certain computer programs free-of-charge to the island with the ultimate goal of inserting Puerto Rico’s statistics into the U.S. general Gross Domestic Product figures that currently do not include the island or other U.S. territories, Resident Commissioner Pedro Pierluisi said Monday.
The U.S. GDP — which is the market value of all final goods and services produced in the country in a particular period — only includes the value of goods and services produced in the 50 states and the District of Columbia.
The definition cannot be expanded to incorporate the territories, however, until the statistics and methodologies in each of the territories are sufficiently reliable to warrant the territories’ inclusion, Pierluisi said Monday.
The BEA’s goal is to get Puerto Rico’s economic statistics to the point that they are on par with the 50 states.
“Reliable economic statistics are essential in the effort to promote economic growth and create jobs,” Pierluisi said. “These statistics are not just important for academic purposes. Improved collection of these statistics has a major positive and practical impact on the actions of government and the lives of the people that government represents.”
The BEA has been working since 2010 to provide technical assistance to the four Puerto Rico agencies that are jointly responsible for collecting economic statistics on the Island, namely the Department of Economic Development and Commerce, the Puerto Rico Planning Board, the Government Development Bank, and the Institute of Statistics.
Pierluisi’s office recently met with BEA officials to receive an update on the BEA’s ongoing activities in Puerto Rico.
The BEA’s efforts began after Economic Development Secretary, José R. Pérez-Riera, met in 2010 with then-U.S. Commerce Secretary, Gary Locke, who was recently named U.S. Ambassador to China.
Following the meeting, Secretary Pérez-Riera wrote to Locke asking for technical assistance and an assessment of Puerto Rico’s economic data and methodologies.
In March 2011, a team of experts from BEA traveled to Puerto Rico to make an assessment of Puerto Rico’s statistics and methodologies and to determine how they could be improved, Pierluisi said.
Data collection gaps
In general, Puerto Rico’s data collection system, while already relatively sophisticated and far more advanced than the other territories, has certain problems and gaps that need to be addressed, the elected official said.
“For example, the BEA uses 2005 as the benchmark against which to measure how much retail prices for a sampling of goods and services in the 50 states have increased or decreased. Puerto Rico uses 1954 as its benchmark,” he said. “To update the benchmark requires considerable time and resources, and can be facilitated by the technical expertise of federally-employed statisticians.”
Better data will help the government of Puerto Rico more accurately estimate future tax revenues, enhancing the Iisland’s budgeting process. In the past, inadequate national accounts data has led to the government of Puerto Rico overestimating the amount of expected tax revenue. Because the government sets spending levels based on expected revenues, overestimating revenues has been a meaningful factor leading to budget deficits.
Better data will also help the Puerto Rico government assess the impact of its policy decision and decide what industries to promote locally. The information will also help businesses make investment and hiring decisions, and will help facilitate comparisons of Puerto Rico’s economy with other economies in the 50 states and around the world.