To the Economists what does 6.2% quaterly growth mean?

[Sammuel999]

Was idle today so nikaamua kupitia vitabu vyangu vya business finance year two University Nka patana na ile issue ya PV -PRESENT VALUE OF MONEY ,TIME PREFERENCE NA FUTURE VALUE

Nikaona issue ya compounding na simple interest methods upande wa loans or money deposits kwa bank.....


One illustration said if you deposited 1000000 /- in a bank growing at 12% interest compounded annually for 5yrs itakuwa 1764342.68 shs using the formular

PV(1+R)^n so this got ne thinking if that money was compounded bi annually we will divide that by two to get 6% and 10 regular compounding periods instead of 5

......


So putting that in mind i wanna know if they say an economy grows at 5.9% ,6.0% and 6.2%


This means the kenyan economy is compounded tri-annually at an average of 5.9% meaning in a year kenya grows by more than 15% therefore with my calculations in 13yrs if kenya maintains its growth rate it will be nearly 700bn$


I have even put that to calculations in 2013 september kenya economy was rebased to 53bn$ compounded tri annually by end of 2016 kenyas economy will be at 72bn$ Imf monthly releases said kenya already has broken past the 70bn$ mark


So you do the math
PV = 72bn$
Rate =5.9%
N =13yrs compounded tri annually

72bn$ × (1+ 0.059)^39 = 674bn$ by 2030 ......this is if we dont discover oil

By this stats if tanzanian maintains a 7% growth rate and assuming its current GDP stands at 52bn$ Tanzania will be The largest economy in EA at 728bn$


So am i calculating this rightly???ama


And if so we need to achieve a high growth rate than tanzania for the next 4yrs to ensure they dont reach us!!

 

[Sammuel999]

Mind you turkeys economy in 2003 was 103bn$ today it stands at 945bn$ just 13yrs ago it was just 30bn$ ahead of present day kenya ...

 

[mtanzania1989]

A= P( 1 + r/n)^nt
P- kianzio (72bn)
R- interest rate in a year(5.9)
n - no of times interest rate compounded in a year (3) as per your assumption tri annually.
T- miaka ( 14years - up to 2030)

= 72 ( 1+ 0.059/3) ^ 3*14
= 163.15bn after 14 (2030) years with 5.9% compounded tri-annually.

And if we decided to simplify it, let's assume 6% growth annually
= 72 ( 1 + 0.06/1) ^ 1*14
= 162.8bn

RUDI SHULE JOMBAA ILI UACHANE NA NDOTO ZA MCHANA.

 

[Geza Ulole]

mtanzania1989, hata hiyo GDP ya $72bln Kenya hawana real Kenya GDP ni around $65bln!

 

[Livale]

mtanzania1989, hata hiyo GDP ya $72bln Kenya hawana real Kenya GDP ni around $65bln!

The world seems to have left you behind in 2015, only you can save yourself

@samuel999. There's a certain statement not quoted that makes all the difference in how you compile the gdp. Kenyan gdp grew by 6.2% you (year on year) on the 2nd quarter vs Kenyan gdp grew by 6.2% on the 2nd quarter.

The 1st statement implies that if Kenya maintains the same growth rate as it did in the 2nd quarter, her economy will expand by 6.2% this year. The 2nd statement implies that on the 2nd quarter alone, Kenya's entire gdp expanded by 6.2% and if it maintained the same rate, we'll see about 18-20%gdp growth.

The problem is the media, not being economists usually post the 2nd statement while referring to the 1st as is the case here. So your calculations are right as an economist but wrong as a realist.

 

[mtanzania1989]

mtanzania1989, hata hiyo GDP ya $72bln Kenya hawana real Kenya GDP ni around $65bln!

Huyu Sammuel999 is retarded, sababu kila anachoandika kipo katika dunia ya bambucha
Tukichukua 65bn inakuwa
= 65( 1+ 0.06/1)^ 14*1
= 146.96bn at 2030 with an avg growth of 6% which is still so unrealistic to use Kenya AVARAGE growth as 6%.

 

[Quickly]

Am not an economist but i know that quarterly growth figures are on the corresponding Q on the previous year. Similarly for overall annual growth, its on the previous year. I also know that average growth per year is the simple average for all quarters and that means one can still record negative such as when you have -ve figures for 3 quarters and then +ve for one.
If we are growing at 6% pa what it means is:
A = P(1+R)n.
We want to find out how long(n years) it takes to double the economy so A becomes2P :
2P = P(1.06)n
taking logs both sides :
n= log2/log 1.06 = 11.9 years.
All things remaining constant, which of course is impossible.

 

[Quickly]

Huyu Sammuel999 is retarded, sababu kila anachoandika kipo katika dunia ya bambucha
Tukichukua 65bn inakuwa
= 65( 1+ 0.06/1)^ 14*1
= 146.96bn at 2030 with an avg growth of 6% which is still so unrealistic to use Kenya AVARAGE growth as 6%.

anajaribu kuibua mjadala wewe oblongata inachemka tayari na mitusi ya retarded sijui nini. mimi sio msomi wa mambo za economics lakini anajaribu kupiga hesabu ya the future, na jinsi vitu vinavyoweza badilika ukiweka kila kitu constant. Afu ujue pesa za mafuta zaja, aisee hizo hesabu zake zinaweza kunifanya nikose usingizi maanake hata hiyo growth forecast inaweza kuwa 12% na zaidi

 

[mtanzania1989]

The world seems to have left you behind in 2015, only you can save yourself

@samuel999. There's a certain statement not quoted that makes all the difference in how you compile the gdp. Kenyan gdp grew by 6.2% you (year on year) on the 2nd quarter vs Kenyan gdp grew by 6.2% on the 2nd quarter.

The 1st statement implies that if Kenya maintains the same growth rate as it did in the 2nd quarter, her economy will expand by 6.2% this year. The 2nd statement implies that on the 2nd quarter alone, Kenya's entire gdp expanded by 6.2% and if it maintained the same rate, we'll see about 18-20%gdp growth.

The problem is the media, not being economists usually post the 2nd statement while referring to the 1st as is the case here. So your calculations are right as an economist but wrong as a realist.

Livale acha kutoa justification za kitoto, kama mtu mzima anayejiita msomi hawezi kuelewa kitu kidogo kama hicho basi kuna tatizo kubwa la elimu au yuko retarded. Kwa hiyo Sammuel999 alikuwa anaelewa uchumi wa Kenya unakua kwa zaidi ya 20% annually, alikuwa hajui tofauti ya quarterly vs annually growth na uhusiano wake ?
Binafsi, sikutegemea ujinga wa namna hiyo kwa mtu mwenye access of all kinds of resources za kujielimisha. With this kind of stupidity we have to question everything he is posting.

 

[Geza Ulole]

mtanzania1989, product ya elimu ya Kenya hiyo! Aibuuu...

 

[mtanzania1989]

anajaribu kuibua mjadala wewe oblongata inachemka tayari na mitusi ya retarded sijui nini. mimi sio msomi wa mambo za economics lakini anajaribu kupiga hesabu ya the future, na jinsi vitu vinavyoweza badilika ukiweka kila kitu constant. Afu ujue pesa za mafuta zaja, aisee hizo hesabu zake zinaweza kunifanya nikose usingizi maanake hata hiyo growth forecast inaweza kuwa 12% na zaidi

Quickly nisamehe kwa maneno makali and I extend my apology kwa Samm999 pia, ignore maneno makali ya juu.
Ok, turudi kwenye mada, kuna tatizo kubwa calculation iliyofanya tofauti iwe kubwa sana which really ilinishangaza. Tofauti ya 700bn to 145bn ni kubwa sana, inaondoa hata ladha ya mjadala. Tuliacha hilo acha wachumi watuambie expectation za ukuaji kila nchi ili tufanye mahesabu ya uhakika zaidi.

 

[Quickly]

meanwhile this is happening :

 

[Sammuel999]

Okay mtanzania1989 basi wewe msomi nieleze hiki why does the government release growth rates za GDP after every three months?

Last week THE GOK released a 6.2% growth rate for the second quater of 2016 does this mean that kenyas gdp grew 6.2% in the last three months???