2012110847

Date of submission: May 26 2016

BOK chief says credibility of GDP

figures falling.
South Korea's central bank will develop a supplementary economic indicator to offset the limitations
of gross domestic product (GDP) figures. GDP has been a representative indicator that shows the size
of an economy, the pace of its growth and its status of prosperity. But its credibility is on the decline
as it fails to reflect the digital economy and the growing importance of the service sector. However,
GDP actually is a poor measure of prosperity. The governor went on to say online shopping and
Internet banking services promote conveniences for customers but that does not help GDP figures due
to decreased jobs and facility investments. Given this, downward revisions to GDP forecasts by 0.1 to
0.2 percentage points do not carry as much importance as it did in the past against heavy reliance on
GDP figures in measuring the welfare of an economy.