Advantages And Disadvantages Of Rebasing In Economy

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KENYA CLASSIFIED AS MIDDLE INCOME ECONOMY Rebasing is a procedure where the national statistical authorities ensure that national accounts statistics present an accurate reflection of an economy as possible. This is by replacing an old base year to come up with volume measures of GDP with a more recent base year. It helps in making adjustments to economic growth, addition of new sectors, new products and technology. The UN Statistical commission recommends that nations have their GDP rebased every five years. In Kenya, the Kenya National Bureau of statistics (KNBS) has been working on new Gross Domestic Product (GDP) a while now. Now the revised GDP stand at 55.2 billion dollars (shillings 4.75 trillion) or 25.3% higher than previously estimated,…show more content…
However, it provides us with the tools and policies to be used to tackle these problems, which will lead to their reduction with time. Increase in the overall economic output of a country does not necessarily mean an increase in individual incomes. With the new data acquired, the policy makers will be able to make informed decisions and policy choices that will help tackle social problems like poverty and unemployment. 3. Investments in Kenya by local and global investors. It changes the perceptions about how the economy is performing, leading to attraction of investors to the country. It also highlight key sectors in the economy that are growing and profitable, leading to better investment decisions. However, according to the World Bank, with no improvements in living standards and good policies and prospects to woo investors, the rebasing may not attain increase investments. It gives hope that the policies put in place to attain the Vision 2030 are working as expected. It also shows that the key reforms put in place by the different institutions in the country are working. This creates a positive image for the country, which in turn helps attract investors into the

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