Comptes nationaux

Annual National Accounts: Frequently Asked Questions (FAQs)

 

  

1. What is a GDP? Why do you propose 3 GDP? What are the different components of GDP?

2. Why no GDP at market prices by industries exist?

3. When are the annual national accounts revised? When are the G7 countries releasing their data usually? How large are the revisions?

4. What is the difference between current and constant prices? What is the constant price year for GDP? Is it different from real GDP?

5. For countries that adopted the euro, how do you convert data?

6. What is the difference between government debt, government budget/deficit and government net lending/net borrowing?

7. Are the annual national accounts only composed of GDP?

8. Where can I find households savings and households indebtedness?

9. Do you have data prior to 1980?

10. Do you have a higher frequency than annual data such as quarterly or monthly?

11. Why is there 2 breakdowns for value added, compensation of employees, wages and salaries and employment?


 

1. What is a GDP? Why do you propose 3 GDP? What are the different components of GDP?


Gross Domestic Product is the standard measure of the value of final goods and services produced by a country during a period. GDP is the most common used indicator to compare economic performance across countries or relatively to other data. It combines in a single figure all the production (also called output) carried out by all the firms, the non-profit institutions, government bodies and households in a given country during a given period, regardless the type of goods and services produced, provided that the production takes place in the country's economic territory. Though it is a good indicator to capture these economic activities, it is not a good measure of societies' well-being.

GDP at market prices can be measured in three different ways:

  • As output less intermediate consumption (i.e. value added) plus taxes on products (such as VAT) less subsidies on products;
  • As the income earned from production, equal to the sum of: employee compensation; the gross operating surplus of enterprises and government; the gross mixed income of unincorporated enterprises; and net taxes on production and imports (VAT, payroll tax, import duties, etc., less subsidies);
  • Or as the expenditure on final goods and services minus imports: final consumption expenditures, gross capital formation, and exports less imports.

These different approaches give many components which can be accessed at http://stats.oecd.org/Index.aspx?DataSetCode=SNA_TABLE1

 

 

2. Why no GDP at market prices by industries exist?


GDP is valued at market prices (as paid on the market by the purchaser) on the whole economy (S1), therefore it includes taxes less subsidies on products (mainly VAT paid by the purchaser). The quality of data and sources on taxes are very good on S1 but their detail across industries and institutional sectors is not.

Value added is reported at basic prices, i.e. excluding taxes less subsidies on products, so it can be split among industries and institutional sectors.
Value added by activity
Value added by sector
Value added, annual growth rate

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3. When are the annual national accounts revised? When are the G7 countries releasing their data usually? How large are the revisions?


EU countries, usually release the main aggregates between February and April. More detailed breakdowns, detailed exports/imports and household final consumption by COICOP are released usually later, in October. Fixed assets broken down by industry and product type are released after 24 months.

For non EU OECD countries, it is usually, though not a rule, as follow: Australia at the end of the year, Canada and USA in September, Chile and Korea in June, Japan in February, Mexico and New Zealand in May, Turkey in April.

Revisions depend on the national statistic institutes' national changes/adjustments. Usually there are revisions on the last three years or so, corresponding to readjustments of the previous estimates. This can take place two or three times a year.

In plus to these regular changes, exceptional revisions occur (changes in methodologies, or sources etc…). In this case OECD includes these new data into a blank version in order to keep separated old version and new version data. Sometimes the time coverage of data for one country is reduced during the first years. Usually, after a while, the country is able to submit backward data.

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4. What is the difference between current and constant prices? What is the constant price year for GDP? Is it different from real GDP?


At current prices, physical quantities are reported at a time in the year, and evaluated by the prices of this particular year.

Across time, GDP value can be affected by quantities, qualities and price changes. The drawback of this measure is that it can give the false impression that quantities have changed during the year, while in reality it was due to a change in price (or inflation).

 

The constant prices (or volume) estimates on the other hand will give a better idea of the GDP volume (quantity) on the entire period.

There are two measures of volume estimates (constant prices and chain linked estimates) usually used to compare across countries and over the time.

The constant prices use the price structure of a reference year, so that it eliminates the inflation changes and allows the analyst to concentrate on the volume of production alone. This is why usually volume data are used for comparisons across the years.

 

Chain link estimates are more accurate than constant prices because they use the previous year price structure (being closer to the prices structure of the studied year).  The only problem with chain link estimates is that the additivity is lost and it cannot be conceptually used on transactions presenting positive and negative data (such as stocks data). The chain link estimates was recommended by 93 SNA (System of National Accounts 1993).

In the OECD database, the volume measure depends on the country's submission to OECD. All OECD member countries present chained link estimates except Mexico which present constant prices. In OECD.Stat, our data warehouse, a country note details which method is followed by the country, which is the national reference year etc…, and is accessible by clicking on theMetaData next to the country's name.
Each country has its own national reference year. It varies from one country to the other. By selecting the measure "V", users get the national reference year. But, for sake of comparability, OECD in its publication or under the measure "VOB" publishes all data at the same OECD reference year that is currently 2005.

 

Referring to "Real GDP" growth is a misuse of language. Usually, when referring to "real" indicator/growth it is in the case of income-related indicators, for which the volume (physical quantities and prices) does not make any sense. In this case another deflator than the GDP one, can be used such as the domestic demand, or final consumption demand.

 

The most important is the distinction between current and constant measures, which is being made either you are referring to real or chain linked estimates.
Acces GDP and components, current and constant prices, national currency and US dollar
Access GDP, current and constant prices, annual growth rate

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5. For countries that adopted the euro, how do you convert data?


National data are expressed in Euros for all member countries of the European Monetary Union (EMU).

Data relating to years prior to entry into the EMU have been converted from the former national currency using the appropriate irrevocable conversion rate, defining the euro on 1st January 1999 (2001 for Greece, 2009 for Slovak Republic etc…). The irrevocable conversion rates can be found on www.ecb.int/euro/intro/html/index.en.html

The method facilitates comparisons within a country over time and ensures that the historical evolution (i.e. growth rates) is preserved. However, pre-EMU euros are a notional unit and are not normally suitable to form area aggregates or to carry out cross-country comparisons.

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6. What is the difference between government debt, government budget/deficit and government net lending/net borrowing?


General government constitutes a very important institutional sector including central government, local authorities and the social security funds.

Public deficit: corresponds to "net lending/net borrowing of general government". When the item is negative, it is a public deficit (net borrowing) and when positive, a public surplus (net lending). Deficit (/surplus) corresponds to flows data.

Access public deficit in national currency
Access public deficit as a percentage of GDP

 

 

Public debt: represents the amount of public debt on the balance sheets of general government, which is stock data. Debt is a commonly used concept, defined as a specific subset of liabilities identified according to the types of financial instruments included or excluded. Generally, debt is defined as all liabilities that require payment or payments of interest or principal by the debtor to the creditor at a date or dates in the future. Consequently, all debt instruments are liabilities, but some liabilities such as shares, equity and financial derivatives are not debt [System of National Accounts, 2008, par. 22.104]. At the OECD, the concept of debt is the one of 2008 SNA definition. This definition differs from the definition of debt applied under the Maastricht Treaty for European countries.

Access public debt as a percentage of GDP

 


Public expenditure: corresponds to total actual expenditure, meaning monetary payments made by general government. This transaction is widely used to measure the size of the role played by general government in the national economy.  This information is available in different place in OECD database under different codes:


Details of government expenditure by function (called COFOG) can be found at the following links :

Total government expenditure in national currency
Total government expenditure as a percentage of GDP
Total General government expenditure in national currency

 

 

Total taxes and social contributions: this transaction has much in common with the previous one, but it is measured by general government revenue and not expenditure. As its name indicates, it reflects the taxes and actual contributions (in other words, not including imputed contributions) that households and firms must pay to various parts of general government.

Access total taxes and social contributions in national currency
Access total taxes and social contributions as a percentage of GDP

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7. Are the annual national accounts only composed of GDP?


Many other transactions are reported in ANA. GDP is the most famous one. You may also find data relating to detailed:

Households final consumption (COICOP)
Employment
Simplified accounts by institutional sectors
Detailed accounts by institutional sectors

 

All those data are compiled into a unique framework (SNA 93-08), which make them fully comparative at the international level, available at http://unstats.un.org/unsd/nationalaccount/sna1993.asp


The reference guides, can be found on the OECD website. OECD also publishes publications explaining the national accounts to public and presenting among GDP other indicators:
Understanding National Accounts
National Accounts at a Glance

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8. Where can I find households savings and households indebtedness?


Household's savings: Net saving is a balancing item of the Households institutional sector that reports the difference between the Net Disposable Income of Households and final consumption expenditures. Gross saving is used to acquire financial and non-financial assets.

Access household's savings

 

 

Households' net lending/net borrowing represents the amount available for the purchase of financial assets or debt repayment. It is almost always positive for HH sector. It is sometimes also called the "Financial saving". 

Access Households' net lending/net borrowing

 


Households debt: The concept of debt is the one of 2008 SNA definition. Debt is obtained as the sum of the following liability categories, whenever available / applicable in the financial balance sheet of the institutional sector: currency and deposits (AF2), securities other than shares, except financial derivatives (AF33), loans (AF4), insurance technical reserves (AF6) and other accounts payable (AF7). OECD publishes an indicator showing the stock of debt obtained from the financial balance sheet of Households and NPISHs sector (S14+S15) as a percentage of its gross disposable income.  For the households sector, liabilities are essentially made up of loans, and more particularly of house purchase loans.

Access households debt as a percentage of Gross disposable income

 

Acess households debt, raw data:

http://stats.oecd.org/Index.aspx?DataSetCode=SNA_TABLE710

http://stats.oecd.org/Index.aspx?DataSetCode=SNA_TABLE720

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9. Do you have data prior to 1980?


OECD publishes long time series of GDP as from 1970 for most of the countries. Some projections are also computed.
They can be downloaded at www.oecd.org/eco/outlook/economicoutlook.htm

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10. Do you have a higher frequency than annual data such as quarterly or monthly?


Quarterly national accounts are accessible on http://stats.oecd.org/Index.aspx?DataSetCode=QNA.  Monthly GDP and other monthly national accounts data are not available.

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11. Why is there 2 breakdowns for value added, compensation of employees, wages and salaries and employment?


Many countries, in particular EU countries, provide now their series by activity according to ISIC rev 4 classification, whereas they used to provide them according to ISIC rev3. New series in ISIC rev 4 are coded with a "V" before the ISIC letter code and the title of the transaction/series is added with (ISIC Rev 4)..

These two ISIC classifications and their correspondence are available on UNSD web site:

However, it is important to note that many countries have improved their sources in switching to the new classification (and therefore changed their totals). ISIC Rev 3 won't be updated anymore for countries which have switched to ISIC Rev4. Most of non EU countries are still providing their data according to ISIC rev3. But the concerned countries are expected to change in the coming years to ISIC Rev 4.

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