Q1 GDP pow-wow: Why we need to "double-deflate" both the ra-ra comments and the Cassandras
It is a pity that national accounts statistics (NAS) have become a political football and subject to biased commentary. If the government side would like to put the best interpretation on the latest numbers, the opposition would like to do the opposite. This cannot but be demotivating for those who actually work very hard to compile these statistics painstakingly year after year. The latest data print on first quarter GDP (April-June 2026), which showed that GDP grew by a healthy 7.8 percent in real terms (10.3 percent in current terms), has been celebrated by the government as a huge achievement in the face of global headwinds. The opposition and ideologically inclined economists would like to pretend that this is a fake story, since the new numbers are based on a deflated 2025-26 first quarter base in the new GDP series, which uses new methods to estimate GDP, including double deflation. Double deflation means that output/revenue numbers are deflated twice to remove the effects ...