Prostitutes, higglers and ganja farmers could soon find their output captured in local official data as part of efforts by the Statistical Institute of Jamaica (STATIN) to accurately measure the country's gross domestic product (GDP).

"We will try to capture underground production, legal and illegal," Anette McKenzie, deputy director general of STATIN, said yesterday, as the agency launched its Jamaican System of National Accounts.

According to McKenzie, prostitution is already captured in the data and efforts will be made to capture information on the under ground and informal economy.

It is a move that has been welcomed by Prime Minister Bruce Golding, who noted that the informal sector is estimated to be 40 per cent of the formal economy.

Informal economy

Golding argued that the country needs to determine how much of this informal economy is being included in the official data.

"Just the sheer fact of its informality doesn't mean that it is immeasurable, and I think the challenge to us is to find ways in which we can measure it," Golding said.

The prime minister said the initial effort to determine accurate figures from the informal sector would not need to be designed for taxation or law enforcement purposes.

"There is no point in using data if it is giving you part of the whole," Golding said. "Eventually through tax reform we want to get as much of it within the formal system as possible."

The latest move by STATIN should come as good news for former finance minister, Dr Omar Davies who repeatedly called for a study to determine the size and impact of the informal sector.

In its 2006 country report on Jamaica, the International Monetary Fund (IMF) claimed that there was evidence that the informal sector was growing faster than the formal economy.

At the time, the IMF warned that the increase in the size of the informal economy had implications for the measurement of economic growth.

"Correcting for this underestimation, average GDP growth during the 1991-2000 period may be estimated as high as three per cent, or 2.7 percentage points higher than officially recorded," the IMF said.

Household consumption

According to STATIN, while it might not be able to isolate the level of contribution from the underground economy, it will look at household consumption and other demand indicators to help in determining the money flowing into the economy from the informal sector.

Already STATIN has used the new system to recalculate the country's GDP since 1998.

In figures presented yesterday, STATIN said the new Jamaican System of National Accounts, which is done in line with the United Nations System of National Accounts 1993, show that the GDP for 2003 was 14 per cent higher than initially reported.

Comparisons for the other years were not immediately available.