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Technical Terms

Concepts and Definitions

This document provides simple concepts and definitions to be used across social sector line ministries and agencies involved in collection, analysis and dissemination of data.

Economic Survey

You may see a number of terms used throughout this survey or during discussions about the survey. Below we explain some frequently used terms.

The Gross Domestic Product measures the value of economic activity within a country. Strictly defined, GDP is the sum of the market values, or prices, of all final goods and services produced in an economy during a period of time. There are, however, three important distinctions within this definition:

Gross Domestic Product (GDP)


  GDP is a number that expresses the value added to the economy in the annual production of goods and services, expressed in local currency.
  GDP tries to capture all final goods and services as long as they are produced within the country, so that the final monetary value of everything that is created in a country is represented in the GDP.
  GDP is calculated for a specific period of time, usually a year.

  GDP   = GROSS VALUE ADDED FROM PRODUCTION DURING THE
YEAR
  = OUTPUT,
SALES,
RECEIPTS FROM PRODUCTION DURING THE
YEAR
     -
    (minus)
INTERMEDIATE
CONSUMPTION.
PURCHASES
DURING THE YEAR


Value-added in the context of measuring the GDP

The concept of value-added is best explained by a simple example: consider a rice farmer who produces paddy. He grows the paddy, harvests it, and sells it to a miller for $100,000. The miller takes this and mills it to produce rice, sold for $150,000. This rice is taken by another buyer and further refined to produce highly polished rice, and sold for $200,000, and finally the latest buyer takes it in bulk, and packages it in boxes and sells it all for $250,000.

Total Value in G$
  Paddy Sale   100,000
  Rice Sale   150,000
  Polished Rice   200,000
  Packaged Rice   250,000
The total value of all the outputs is $700,000, but we are double counting every time we count the inputs that have gone before. For instance, this way we count the paddy four times. Therefore, value-added is a much more accurate measure, so that:


Value-added in G$
  Paddy Sale   100,000
  Rice Value-added   50,000   (150,000 – 100,000)
  Polished Rice, Value Added   50,000   (2000,000 – 150,000)
  Packaged Rice   50,000   (250,000 – 200,000)
  Total Value Added = GDP = 250,000


Base Year
  The time period from which constant prices or quantities are taken.
  Guyana’s present base year is; 1988.
  The base year that the BOS will use after this survey is; 2006.

How Significant is the Base Year?
The base year of a an index series has to be carefully chosen since the base year would have a considerable influence both on the movement of price relatives of the individual commodities and on the weighting pattern thus influencing the movement of the Index as a whole. The considerations that would go into the selection of the base year could be briefly listed as follows:

  The base year should be a normal year in respect of production and trade. Since, a fixed weighting pattern is followed throughout the life of the index, it is necessary that the weighting pattern should represent the normal weight of commodities in production and trade;

  The base year should be a normal year in respect of prices of commodities in general. The period at least should not be one representing abnormal prices and their fluctuations;

  Reliable data may be available for the selected base year;

  The base year should be as recent as possible so that by the time the revised series is released it has not outlived its utility;

  As far as possible, the base year should be aligned with the base year of other important economic indicators and indices, such as national income series, other price series, etc. Since most of the important economic indicators are interactive, proper alignment of the base year will smooth the jerks in the movements and will ensure consistency.

Real GDP and Nominal GDP
Because prices do affect valuation of production, macroeconomists speak about two different measurements of GDP: nominal GDP and real GDP.

  Nominal GDP is the sum value of all produced goods and services at current prices. This is the GDP that is explained in the sections above. Nominal GDP is more useful than real GDP when comparing sheer output, rather than the value of output, over time.

  Real GDP is the sum value of all produced goods and services at constant prices (that is, everything is valued at the prices of a specific year, no matter what year we are dealing with). By keeping the prices constant in the computation of real GDP, it is possible to compare the economic growth from one year to the next in terms of production of goods and services rather than the market value of these goods and services. In this way, real GDP frees year-to-year comparisons of output from the effects of changes in the price level.


Nominal GDP, Real GDP, and Price Level
Nominal GDP is GDP evaluated at current market prices. Therefore, nominal GDP will include all of the changes in market prices that have occurred during the current year. Real GDP is evaluated at the market prices of some base year. For example, if 1990 were chosen as the base year, then real GDP for 1995 is calculated by taking the quantities of all goods and services purchased in 1995 and valuing them by their 1990 prices.

Enterprise
An enterprise is any continuing trade, business, profession or similar activity, whether or not carried on for the purpose of deriving a profit. The activity must be undertaken on a continuing basis. On the other hand, any continuous activity that is in the nature of a trade, business, profession or similar activity will constitute an enterprise even if it is not carried on for the purpose of deriving a profit. An example of a continuous type of enterprise would be certain operations in the nature of a trade or business, which are undertaken by the State or local authorities, such as the railway and postal services and the supply of electricity and water. Further examples of enterprises frequently conducted otherwise than for profit are bar and restaurant facilities provided by clubs for their members and staff canteen services provided by employers for their employees.





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Guyana at a Glance



Population 746,955  (Census 2012)
Size 214,970 square km
Location Between 1o & 9o  North Latitude and 57o & 61o West Longitude
Time Zone GMT - 04:00
Currency Guyana Dollar (G$)
Per capita GDP 2015 at basic prices US$3,724.00
Nominal GDP 2015 G$653,836  million
Real GDP 2015 G$441,105  million
Inflation Rate

Dec '16 - Sept. '17:
           
1.5

Average Exchange Rate (Mid Rate)

Jul '17:   
G$212.52
to US $1
Aug '17:   
G$211.86
to US $1
Sept '17:   
G$211.58
to US $1


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