In the News Teaching Activity – can the GDP measures be adjusted to make them more accurate? (Mar 2025)

The UN has approved changes to how economies are measured, adding wind, waves, and data as economic assets.

For decades, GDP has been the standard measure of economic size, tracking the value of goods and services produced. However, a UN-approved update will soon factor in wind, waves, and data as standalone assets. These adjustments reflect the growing importance of renewable energy and digital information but are seen as accounting shifts rather than real economic gains. While they may inflate GDP estimates, they won’t boost tax revenues. This could strain government budgets, particularly in countries like the UK, where spending commitments—such as defence and aid—are tied to economic size. The changes take effect in 2030, giving policymakers time to adjust to their potential fiscal impact.

Data, waves and wind to be counted in the economy - BBC News

1. What does GDP measure, and why is it used to assess the size of an economy?

2. Discuss the potential advantages and disadvantages of the UN's update to GDP calculations, which will include wind, waves, and data as economic assets.

3. Evaluate whether the update to GDP will provide a more accurate reflection of living standards.