GDP estimate for 2024: Economic weakness leads to negative real GDP growth rate

The 2024 GDP estimate is generated using a statistical model. The associated estimation uncertainty is substantial: on the one hand due to the high economic volatility of recent years, and on the other hand due to expectable revisions in the national accounts to the GDP value of the official estimate for 2023, which have been considerable in recent years.

Gross domestic product (GDP) is a key figure for various economic analyses and estimates. GDP does have limitations in terms of long-term welfare considerations and should also be supplemented by other indicators in the relevant assessment. However, GDP and other national accounts indicators are central to economic policy analysis as historically established and internationally comparable concepts and are indispensable for productivity and business cycle analysis.

To improve the data situation, the Liechtenstein-Institute produces an annual GDP estimate, which provides an initial value for the annual GDP of the previous year almost one year before the publication of the GDP estimate by the Office of Statistics. A time series analysis model with national and international economic variables is used, which have a high correlation with Liechtenstein’s GDP and are available earlier. As the economic indicators used are published with sub-annual frequency, the model also estimates GDP quarterly data (back to 1998) and thus provides another important supplement to the official national accounts, which are only calculated on an annual basis. For economic and growth analysis, real (price-adjusted) GDP is more relevant than the officially published nominal GDP. For this reason, the Liechtenstein-Institute calculates real data and calibrates its estimation model to it, but also derives and reports nominal values.

Due to Liechtenstein’s very high economic volatility, the sparse data basis and, in some cases, major revisions of already published official figures, the GDP estimate should be interpreted as an initial approximation. The GDP estimate is a module of the «Applied Economic Analysis», which is supported by the government of the Principality of Liechtenstein. It appeared for the first time in 2021 and is published annually at the end of March.