Britain's economy could be as much as £65bn bigger – almost 5% – when new GDP figures are published in September incorporating items such as prostitution and drug dealing under new statistical rules.
The Office for National Statistics said its latest estimate was that GDP in 2009 was 4.6% higher than previously stated on the back of the planned improvements in measuring the size of the economy.
The update will be part of a more inclusive approach to GDP that comes into force in September to comply with EU statistical rules and to "provide the best possible framework for analysing the UK economy and comparing it with those of other countries".
But economists said the change in the size of GDP in official figures, which is unlikely to change the pace of growth in the economy, meant little in reality.
"On paper the economy is £65bn bigger – which is massive. But it is purely an accounting treatment. These activities have always been there – particularly research and development activities – they just weren't necessarily taken into account in GDP previously," said Alan Clarke, an economist at Scotiabank.
"In isolation, if the economy is 4.6% bigger and nothing else changed, the public finances would look much better – since we tend to look at borrowing relative to GDP or debt relative to GDP. That would be the equivalent of public finances alchemy but we know that the ONS is going to adjust the way it accounts for debt as well – and this is going to be revised higher – so there is no free lunch here."
The ONS said it will release figures for the impact on the size of GDP in 2010-13 nearer to September. Looking further back, it said that over the period 1997 to 2009 the annual impact of the changes was on average to raise the level of GDP by 3.6%, rising from an additional £25bn (2.6%) in 1999 to £65bn in 2009.
Tuesday's update on the impact of the changes follows estimates last month from the ONS that in 2009 illegal drugs and prostitution boosted the economy by £9.7bn – equal to 0.7% of gross domestic product and roughly the same contribution as farming.