Our GDP figures just got a £10bn boost by including prostitution and illegal drugs for the first time

A change to the way in which GDP is calculated now includes figures for prostitution and illicit drugs. The changes, which bring the GDP measure in line with European standards, show that the country’s GDP following the economic crisis was not as low as previously calculated.

Revisions by the ONS indicate that after the downturn, UK GDP shrank by 6%, which is less than the original estimate of 7.2%.

The ONS estimates that the inclusion of drugs and sex would have added between £7bn - £11bn a year between 1997 and 2009. This means that despite being illegal, prostitution and illegal drugs are worth as much to the economy as agriculture.

Household spending was £12.33bn higher in 2012 because of the inclusion of drugs and vice.

The upwards revision to the level of Household Final Consumption Expenditure (HHFCE), is shown below, with the new estimates (Blue Book 2014), including “narcotic drugs and prostitution”, as well as improved methods of measuring pensions.

Drugs and prostitutes ONS graph

Source: ONS

According to the Telegraph, other illegal activities, such as the smuggling of alcohol and tobacco, are already included in UK growth and make up around £300m.

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