| Output at basics prices | Output, or production, includes the production of all goods and services, with one exception only. Services produced within the household for own final consumption are excluded.
Output can be divided into three different categories:
(i) Market output; Goods and services produced for the market and sold at economically significant prices, products bartered, products used for payments in kind, and products added to the inventories of finished goods.
(ii) Output for own final use; Goods and services retained for final use within the same institutional unit, or fixed capital formation by the same local kind of activity unit. The products should be valued at the price of similar products in the market, alternatively at cost of production.
(iii) Other non-market production; Goods and services provided free, or at prices that are not economically significant. Most production by government and non-profit institutions serving household belong to this category. Non-market production are valued at cost (the sum of intermediate consumption, comp. of employees and consumption of fixed capital), in lack of a market value.
Basic prices are the prices the market producers receive, after taxes on the products are paid, and subsidies on the products are received. Thus, basic prices are the most interesting concept when analyzing the process of production. |
| Intermediate consumption at purchasers prices | Intermediate consumption consists of the value of the goods and services consumed (used) as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital.
The goods or services might be either transformed or used up by the production process.
Intermediate consumption is always measured at purchasers price. |
| Value added at basics prices | Gross value added at basics prices is defined as the value of output at basics prices less the value at intermediate consumption at purchasers prices. Value added measures the additional value created by a process of production.
GDP is the sum of total value added at basics prices plus taxes on products, net. |
| GDP at purchasers prices | GDP measures the total output of goods and services for final use occurring within the domestic territory of a given country, regardless of the allocation to domestic and/or foreign claims.
Gross domestic product at purchasers’ prices can be derived from (i) the production side, (ii) the expenditure side, and (iii) the income side;
(i) the sum of value added at basic prices plus taxes on products, net, or the sum of value added at producers prices plus taxes on imports and non-deductible value added tax.
(ii) the sum of final expenditure; private and government consumption expenditure, gross capital formation, and export minus imports, or
(iii) the sum of wages and salaries, other taxes on production, and gross operating surplus/mixed income.
GDP is a concept defined in purchasers (market) prices only. |
| Taxes on production and imports | Taxes are compulsory, unrequited payments made by institutional units to government units. Taxes on production and imports consist of taxes on products payable on goods and services when they are produced, delivered, sold, transferred or otherwise disposed by their producers plus other taxes on production. |
| Taxes on products | Taxes on production that are payable per unit of output, like sales taxes, value added type taxes, taxes on fuel etc. |
| Other taxes on production | Other taxes on production consists of all taxes, except taxes on products, that enterprises incur as a result of engaging in production, but do not include any taxes on profits or other income received. These taxes are recorded as being payable out of value added. Examples are; taxes on payroll or work-force, on business and professional licenses, and taxes on pollution. |
| Subsidies | Subsidies are current unrequited payments that government units make to enterprises, resident producers and importers. Subsidies may be designed to influence enterprises level or type of production, or the prices at which the products are sold. (Capital grants are in the national accounts recorded as capital transfers, not as subsidies.) |
| Subsidies on products | Subsidies on products are payable per unit of a good or a service. |
| Other subsidies on production | Other subsidies on production consists of all subsidies, except subsidies on products, that enterprises might receive as a consequence of engaging in production. Examples are; subsidies to reduce pollution and subsidies on payroll or workforce. |
| Taxes on production, net | Taxes on production, net is defined as taxes on production and imports less subsidies on production. |
| Taxes on products, net | Taxes on products, net is defined as taxes on products less subsidies on products. |
| Exports | Exports of goods and services represent the value of all goods and services provided to the rest of the world. Included is the value of merchandise, freight, insurance, travel, and other non-factor services. Wages, salaries and property income (formerly called factor services), such as investment income, interest, and labor income, is excluded. |
| Imports | Imports of goods and services represent the value of all goods and services received from the rest of the world. Included is the value of merchandise, freight, insurance, travel, and other non-factor services. Wages, salaries and property income (formerly called factor services), such as investment income, interest, and labor income, is excluded. |
| Resource balance | Resource balance equals exports of goods and services minus imports of goods and services. |
| Compensation of employees | Compensation of employees is the total remuneration payable, in cash or in kind, by an enterprise to an employee for work done by the latter.
Compensation of employees does not include any taxes payable by the employer on the wage and salary bill. |
| Operating surplus | Operating surplus is defined as value added at basic prices less compensation of employees payable less taxes on production payable plus subsidies on production receivable. |
| Mixed income | Mixed income is defined in the same way as operating surplus, and is an alternative term used for unincorporated enterprises, in which the owner (or other members of the household) may work without receiving any wage or salary. |
| Property income | Property income is any income on financial assets and tangible non-produced assets like land and sub-soil assets.
Property income accrue when the owners put this assets at the disposal of other institutional units.
Property income might be either interest, dividends, withdrawals from income of quasicorporations, reinvested earning on direct foreign investment, property income attributed to insurance policy holders, and rent on tangible non-produced assets.
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| Net income from abroad | Net income from abroad includes compensation of employees from abroad less compensation of employees to abroad, plus property income from abroad less property income to abroad.
Compensation of employees covers wages and salaries, while
property income covers interest, distributed income from corporations like dividends and withdrawals, reinvested earnings, and rent. |
| Gross national income | Gross national income (GNI) is the value of a nations income, the income of the resident people.
GNI is derived as GDP plus net income from abroad.
Thus, while GDP measures the production within the countries boundary, no matter who produces it, GNI measures the value of the incomes of the resident people, no matter where it is earned.
Gross national income (GNI) was earlier termed Gross national product (GNP). |
| Current transfers | A current transfer is a transaction in which one institutional unit provides a good, a service or an asset to another unit without receiving anything in return as a counterpart.
As current transfers are defined any transfer that is not a capital transfer. A transfer should be classified as a capital transfer if it involves a transfer of an asset for one of the parties.
Current transfers might be either current taxes on income and wealth, social contributions and benefits, and other current transfers (e.g., non-life insurance premiums and claims, current transfers between government units, current transfers to non-profit institutions, workers remittances etc.). |
| Net current transfers from abroad | Net current transfers from abroad is equal to the unrequited transfers from nonresidents to residents minus the unrequited transfers from residents to non-residents. (Capital, or investment, grants are recorded as capital transfers.) |
| Gross national disposable income | Gross national disposable income (GNDI) is the income available to a nation for final consumption expenditure or saving
GNDI is derived as GNI plus net current transfers from abroad. |
| Final consumption expenditure | Total final consumption expenditure consists on consumption expenditure by households, NPISHs and general government. |
| General government final consumption expenditure | Government final consumption expenditure is derived as total output by government less any fees paid by household or other units, in addition, any expenditure on goods and services bought in the market and supplied directly to the households.
Government final consumption expenditure can be divided in individual and collective consumption. |
| Final consumption expenditure of households | Households’ final consumption expenditure consists of expenditure incurred by resident households on consumption goods and services, included fees paid to government for educational and health services etc., and imputed expenditures like rent on owner occupied dwellings and consumption of output for own final use. |
| Final consumption expenditure of NPISHs | NPISHs’ consumption expenditure is derived as total output by NPISHs less any fees paid by household, in addition, any expenditures on goods and services bought in the market and supplied directly to the households.
Final consumption expenditure by NPISHs is by nature individual.
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| Actual consumption of households | Actual consumption of households is measured as the value of all individual consumption of goods and services.
Thus, households actual consumption consists of households final consumption expenditure, social transfers in kind from NPISHs (=final consumption expenditure by NPISHs, which is individual by nature), and social transfers in kind from general government (=government expenditure on individual goods and services). |
| Actual consumption of general government | Actual consumption of general government is measured as the value of the collective consumption services provided to the community by general government, e.g., police, defense etc. |
| Gross national saving | Gross national saving is defined as gross national disposable income less final consumption expenditure.
Gross national savings is equal to gross domestic savings plus net income and net current transfers from abroad. |
| Gross domestic saving | Gross domestic saving is the part of domestic income (GDP) not used for final consumption, derived as GDP less final consumption expenditure.
Gross domestic savings is not a SNA concept, but a measure widely used by economists in the Bank and other international organizations for analytical purposes. |
| Capital transfers | Capital transfers might be either in cash or in kind. A capital transfer in kind consists of the transfer of ownership of an assets (other than inventories or cash) or the cancellation of a liability (debt), without any counterpart being received in return, while a capital transfer in cash consists of the transfer of cash that the first party has raised by disposing of an asset, or assets (other than inventories), or that the second party is expected to use for the acquisition of an asset.
Capita transfers might be either capital taxes (e.g., inheritance taxes), investment grants or other capital transfers (e.g., cancellation of debt).
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| Gross capital formation | Gross capital formation is the sum of fixed gross capital formation, changes in inventories and acquisition less disposables of valuables. |
| Gross fixed capital formation | Gross fixed capital formation comprises all outlays (purchases and own-account production) on additions to the stocks of fixed assets, less sales of second-hand and scrapped assets. Most outlays by general government on durable goods for military purposes are excluded. (According to SNA should these outlays be recorded as consumption.) |
| Change in inventories | Change in stocks, or inventories, comprises the value of the physical changes in (i) stocks of raw materials, work-in-progress (excluding work put in place on structures, roads and other construction projects), and finished goods held by industries, and (ii) stocks of strategic materials or other commodities of importance to the nation held by producers of government services. |
Total Expenditures
(Domestic Absorption) | Total expenditures is the sum of final consumption expenditure by households, NPISHs and general government, and gross capital formation (gross fixed capital formation, changes in inventories and acquisition less disposables of valuables). |
| Compensation of fixed capital | Consumption of fixed capital is a cost of production, defined as a decline in the current value of the stock of fixed assets as a result of physical deterioration, or normal accidental damage.
Consumption of fixed capital as recorded in SNA is intended to be theoretically appropriate and relevant for economic analysis, and the value generally deviates considerably from depreciation as reported in business accounts. |
| Net lending / Net borrowing | Net lending / Net borrowing is defined as gross saving plus capital transfers, net less the value of acquisition less disposals of non-financial assets less consumption of fixed capital.
Net lending equals net acquisition of financial assets less net incurrence of liabilities.
The term net lending is used if the value is positive, and net borrowing if negative. |
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