After all, what was the impact of the F-16 on the growth of GDP? – Jornal de Negócios – Portugal

In the past few days, generated-if any of confusion surrounding the impact that the sale of F-16 to Romania had in the growth of the Portuguese economy. Some news and opinion articles argued that it had been that transaction extraordinary to justify a GDP growth more pronounced than expected.

however, as she explains, today the National Institute of Statistics, this operation – evaluated by the INE in 70 million, has had a null impact on the growth of the Portuguese economy.

How? When buying/selling a F-16 (or other commodity) abroad, this counts as import/export. But it is also registered as an investment/disinvestment. Is that in the most recent amendment to the rules of national accounting, defined at the european level, the military equipment started to count as gross fixed capital formation.

The explanation of INE is quite clear: “according To the European System of Accounts, ESA 2010, the military equipment is accounted for as fixed capital. The acquisition of the foreign translates simultaneously in investment and imports. The sale to the foreigner, likewise, translates into exports and disinvestment. In any case the impact on GDP is approximately null at the time of the transaction.”

that is, what this operation did was to simply re-balance the contributions of the growth, giving more emphasis to the external front and less to the internal. The sale of F-16 was an export and, at the same time, a divestment in the amount of 70 million. This means that, without the transaction, the exports would have grown by 5% (instead of 5.4%) and the investment fallen to 0.5% (instead of down 1.5%). The investment in machinery and equipment, in particular, would have triggered a 7.2% instead of the growth of 3.1% that was registered.

a few years Ago this effect would not be possible, since the military equipment was not considered to be investment in the system of accounts previous (ESA 95). Only counting the investment the military equipment that had civilian use, but two years ago this was extended to all the weaponry. The logic is that this type of equipment is not consumed in a single year or quarter. Is used (or capable of use) for a long time.

military equipment is integrated in the gross fixed capital formation in the segment of “other machinery and equipment”, which represents 27% of the investment done in Portugal. The item the more relevant it is – and always was – the construction, with a weight of 48%.