Trend GDP is the Gross Domestic Product in the economy when the production factors are used with a normal intensity and the productivity level is at trend.
The estimation of trend GDP is based on the methodology of the OECD and the IMF. Thus, the Ministry of Finance convenes the Advisory Committee for the remittance, by its members, of a series of projected variables (Gross Fixed Capital Formation, Labor Force and Total Factor Productivity), which serves as an input for trend GDP, based on a Cobb-Douglas production function.
The Macroeconomic Policy Division calculates the level of trend GDP, based on the information of the Committee of experts, whose procedure is corroborated by the Autonomous Fiscal Council (CFA). The estimation of trend GDP makes it possible to estimate the GDP output gap, that is, the ratio between Potential and effective GDP, which serves as input for the calculation of the Structural Balance.
The result of the output GDP calculation can be found in the Budget Office’s website.