Recently, economy media lays particular emphasis on one point: There is a significant difference between the national income growth figures for the second quarter announced last week and the industrial production index (growth) announced earlier. They say that such a difference did not exist in the past. So, let us compare the growth rate of the industrial sector as a sub-item of GDP with the growth rate derived from industrial production index. First of all, it is necessary to remind you of what happened in the last quarter. As GDP data suggests, industrial sector growth was minus 8.7 percent in the second quarter. But industrial production index for the same period is minus 15.4 percent signifying a considerable difference.

So, how was the situation in the previous periods? Were there such differences? Latest data available is for 1998. Therefore, growth rates are calculated since 1999. There is a quite high correlation between both rates: 99%. That is, while one rate grows, the other also grows at a quite close rate, and vice versa. Is this valid for all periods? It is except for the last quarter: from the first quarter of 1999 to the second quarter of 2009, there is no considerable difference. I will provide three graphs to demonstrate the situation better.

Graph 1 gives the growth rate derived from industrial production index at the horizontal axis. At the vertical axis, growth rate from GDP is given. Each circle on the graph gives the GDP growth corresponding to the growth in the industrial production index for a certain year. Also, there is an upward curve showing the correlation between the two growth rates. As can be noted, almost all of the circles are either above or quite close to this curve. The 'circle' for only one single year is off this relation. Yes, as you can guess, this circle is for the third quarter of 2009.

This commentary started to be too 'technical'; but the issue is important. Let me show again the relationship between the two growth rates neglecting the last quarter. Graph 2 shows it for us. Now, let's mix these two graphs. Please pay attention especially to the axes: In the second graph, figures are the same in both axes. If figure in one axis is 10, that in the other is also 10; or if one is minus 30, the other is also minus 30. That is, slope of the curve showing the relation between growth rates is 45. More simply: Both growth rates have increased at quite close rates except for the last quarter. First graph also gave this relationship, but it becomes clearer with the last graph.

So, was there a breaking point between the two growth rates that began in previous quarters though not as significant as that in the final quarter? To see this, let me provide the course of the difference between the two rates in time. Graph 3 does this for us. Figures above zero indicate that growth rate derived from GDP is bigger than the other growth rate. In particular after the second half of 2008, difference between the two growth rates widen gradually and the GDP growth figure stands at higher rates. In the last quarter, the difference rises to incomparably high level. No, I do not imply 'anything'; I am just presenting the situation. There of course is an explanation for this. But I do not know it. I wish nice and happy holidays for all my readers.

Graph 1: Correlation between growth rates derived from industrial growth index and industry sub-item of GDP (1999.I - 2009.II; percent)

Graph 2: Correlation between growth rates derived from industrial growth index and industry sub-item of GDP (1999.I - 2009.I; percent)

Graph 3: Difference between growth rates derived from industry sub-item of GDP and industrial growth index (1999.I  2009.II; percent)

This commentary was published in Radikal daily on 20.09.2009