Thursday, December 10, 2009

77.7% Mystery ..Spooky

Tim Worstall has asked a question and I buggered if I can work out the answer
“Figures in the Treasury’s pre-Budget report documents reveal that in 2014/15, the national debt will be £1,473 billion. That is 77.7 per cent of gross domestic product .Nominal GDP is about £1.4 trillion isn’t it? So that debt is more like 100% or so of GDP….unless we’re expecting a great deal of growth or inflation between now and then?”

You can get there assuming 6% growth but then you could get to the planet of the zogs assuming a Tardis which is about as likely .These are projected growth figures for this year .
2007 PBR plus 2.75%
2008Budget plus 2.5%
2008 PBR minus 1%
2009 Budget minus 3.5%
2009 PBR minus 4.75%

Not exactly encouraging is it , but can anyone tell me where that 77.7% comes from ? I am unable to invent even an imaginary world where it might be true

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