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18/01/2021

"A fall in UK GDP below -8.63% of its GoalGDP should be described as good, very good if it is between -7 and -6.48 and extraordinary if you finallyfall less than -6.48%."

"A fall in UK GDP below -8.63% of its GDPgoalshould be described as good, very good if it is between -7 and -6.48 and extraordinary if you finallyfall less than  -6.48%.

"Once all the information on the level of economic paralysis decreed by the UK government was obtained and processed in 2020, my forecasts suggest that the fall in GDP will range from -6, 48% to -8.63% the latter level that coincides with its Metapib.

On the other hand, quarterly gdp in the fourth quarter could fall between -0, 51% and -0.79%, and the fall could rise the closer to the GDPgoal Target of -8.63%.  The fall in Relative Efficiency will be at least -54, 997 million euros expanding as the final gdp closer to the Target GDPgoal of -8.63%

It should be noted that, between the two systems of calculation of GDP, the MFS and MSS, the difference is only 0.02%, which tells us that the expected GDP should be very close to this figure and in no case exceed -8.63% corresponding to its GDPgoal. Any fall below this level should be considered very good or extraordinary depending on this rating of the near east of 6.48% corresponding to its GDP-MMS." J. Vendrell 15.01.2021

                   EXPECTED UK GDP -2020

The following table shows the summary of the UK's expected GDP by 2020. On the first line are calculations according to the GDPgoal Fusion System method, MFS, corresponding the 2nd row with the calculation method Metapib Media System, MMS

MFS.- According to the MFS (line 1) the annual GDP of 2020 will fall back to -6, 46% to 2, 361, 167 million euros, given that the UK's annual GDPgoal in 2020 is -8.63%, GDP in 2020 in the United Kingdom will achieve a positive relative efficiency (ERP) of 54, 997M, falling as annual Gdp approaches its GDPgoal.

MMS.- If we now calculate the 2020 annual GDP using theGDPgoal Media System method, we see the UK's annual GDP fall by -6.48% to 2, 361, 167M, almost coinciding with the calculated drop with the previous MFS system.

 

Difference between MFS and MMS

The difference between the two is simple

MFS.- The Metapib Fusion System replaces GDP in the 4th quarter, until now unknown, with -9.24% of that quarter's GDPgoal (red oval) which results in a drop in annual GDP of –6.46%.

MMS.- average variation of the 2nd and 3rd, and that yielded a fall of -9, 24%; but does not take into account the 1st quarter since there is no correlation between the variation of its quarterly gdp that rose +2, 56% and the GDPgoal of the 1st quarter that fell on -1, 64%

 

QUARTERLY YEAR-ON-YEAR RELATIVE EFFICIENCY

By comparing quarterly FALLS in GDP with their respective GDPgoal declines now, we can calculate the RELATIVE Efficiency of the UK's GDP. (Column 8, difference between 3 and 7)

"The problem of economic crises underlies the low level of GDP decline is proportional to the increase in economic and disproportionate paralysis to its decline."

In the 1st quarter there is a large variation in favour of GDP relative to GDPgoal which achieves a positive Relative Efficiency of +4, 20%, possibly due to the inertia of the economy.

"Relative Efficiency is the best tool to analyze whether the variation in quarterly and annual gdp is worse, equal to or better than expected"

In the 2nd quarter, the difference between GDP and GDPgoal narrows, falling first from the second – 1.95%, indicating that until the 2nd quarter the pandemic economy has proportionately hurt the UK economy relative to the level of paralysis decreed by its government.

In the 3rd quarter, although economic paralysis softens, which can be seen through the quarterly inter-quarter rise of +10.45% of this period, Quarterly Relative Efficiency falls -2.72% which highlights that Gdp grows proportionately less than it should in relation to the revival caused by the decline in economic paralysis.

Therefore, we can affirm the following Theorem:

"The problem of economic crises underlies the low level of GDP decline is proportional to the increase in economic and disproportionate paralysis to its decline."

In the 4th quarter you can clearly see how the average fall in Gdp in the previous two quarters of -9, 49% is similar to that harvested by GoalGDP in the 4th quarter -9, 24% with a minimum difference between the two quarters of -0.25% resulting in an expected fall in Gdp of -6.48%

"Relative Efficiency is the best tool to analyze whether the variation in quarterly and annual gdp is worse, equal to or better than expected"

  

                                                   CONCLUSIONS

"The difference of 0.02% between the fall in GDP of the SFI of -6, 46% and that of the MMS of -6.48% clearly indicates that GDP should fall between this level and 7%; i.e., below the Target GDPgoal of -8.63%. If this is to be confirmed, we could say that the fall in THE UK's GDP in 2020 should be regarded as extraordinary, very good or good depending on this rating of the extent between the difference in official gdp and GDPgoal .

"While most, not to say all analysts and politicians, consider excessive a fall around -7% of UK GDP by 2020, a fall of this caliber should be considered very good or even extraordinary since it is lower than the expected GDPgoal Target of -8.63% and corresponds to the level of economic paralysis decreed by Boris Johnson's government"

" GDPgoal is undoubtedly the best measuring stick to a country's economic situation, even more effective than the inter-quarterly variation that can distort reality at the onset of economic paralysis because of past economic inertia."

"Relative Efficiency is the best tool to analyze whether the variation in quarterly and annual gdp is worse, equal to or better than expected"

Learn more at www.wed-center.com LinkedIn: Wed Center

Jorge Vendrell - World Economy Devolepment Center

 

 

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