Main aggregates like gross domestic product (GDP), household consumption expenditure, general government deficit, etc., are compiled using a unified and internationally comparable framework: the System of National Accounts (SNA). A couple of years ago, the international standards for this framework have been updated, from the SNA 1993 to the SNA 2008. By now, most OECD-countries have implemented the new standards.
National accounts play a key role in understanding the workings of the economy by providing information on the economic interactions taking place between different sectors of the economy (households, corporations, government, non-profit institutions and the rest of the world), allowing for macro-economic analysis and evidence based decision making. To maintain relevance in describing how the economy functions, the national accounts need to evolve and adapt to the changes in the economy. One prominent example is the need to better reflect the growing importance of the knowledge economy by recognising research and development as investment.
Four successive international standards for national accounts have been released: 1952, 1968, 1993 and 2008.
The changes in the international standards which have the most significant impact on the level of GDP relate to the delineation of investments.
According to SNA 2008, expenditures on research and development and weapons systems (warships, submarines, military aircraft, tanks, etc.) are now included in gross fixed capital formation, i.e. investments. This is recognition of the fact that expenditures on these items provide long-lasting services to businesses, non-profit institutions, and the governments who use them. It increases the level of GDP across time, but the impact on GDP growth rates will generally be minor (as can be seen in countries who have already implemented SNA 2008).
Moreover, in situations like this when changes in international standards are actually implemented in the national accounts, countries tend to take advantage of the unique situation and make changes to improve all their compilation methods - therefore also implementing various improvements in sources and estimation methodologies. It is important to underline that the impact of the latter “statistical benchmark revision” could be higher than the impact of the changeover in standards. For example, the Netherlands increased their level of GDP by 7.6 % for 2010, but only 3 percentage points are related to the implementation of the SNA 2008.
The overall impact of the benchmark revision on GDP-levels, in year 2010
*Australia: 2007 data; Denmark: 2008 data; Mexico: 2008 data; Norway: 2011 data.
Australia implemented the SNA08 in 2009, Canada in 2010, Israel, Mexico and the United States in 2013.
All European Union member states as well as Korea, Iceland, Norway, Switzerland and New Zealand implemented the SNA08 in 2014.
Therefore since end of 2014, all OECD countries except Chile publish GDP estimates according to the SNA08.
Chile will adopt the new standards in march 2017.
For further information please contact the OECD Statistics Directorate at email@example.com.