The Productive Capacity Index: Unlocking Economic Performance for Sustainable Growth

2023-06-20 23:17:12

The United Nations Conference on Trade and Development (UNCTAD) on Tuesday released a new version of its Productive Capacity Index (PCI), to help countries make more accurate diagnoses and measures of their economic performance.

According to UNCTAD, the index measures the ability of countries to produce goods and provide services, which is essential for international trade and global production value chains. This, in turn, allows for more effective policy development and implementation.

“The ICP has its own online portal with publications, manuals, resources and tools. It maps the productive capacities of 194 economies and provides a better measure of development than other more traditional indicators such as the gross domestic product (GDP). It is multidimensional and measures inputs and economic potential rather than outputs,” UNCTAD noted in a statement.

“No nation has ever developed without building the necessary productive capacities, which are essential for countries to achieve sustained economic growth with accelerated poverty reduction, economic diversification and job creation. jobs,” UNCTAD Secretary-General Rebeca Grynspan was quoted in the statement as saying.

UNCTAD defines productive capacities as “the productive resources, entrepreneurial capacities and production linkages which together determine a country’s ability to produce goods and services and enable it to grow and develop”.

While major economic indicators such as GDP measure economic output, the CPI offers a new approach to measuring development progress, UNCTAD said.

Originally published by UNCTAD in 2021, the newly updated index is an enhanced data-driven tool to help countries improve their development policies. The ICP has helped several developing countries assess their production capacities and develop programs to fill the gaps.

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