GDP, output and expenditures; value, Quarterly National Accounts

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Description topics

Expenditure approach to GDP

The way GDP is formed by underlying components in the so-called expenditure approach. In this approach the components are consumption by households, consumption by the general government, gross fixed capital formation, changes in inventories and exports, minus imports. Changes in inventories are included for consistency with the production approach. From the 2010 edition of the European System of Accounts onwards these changes are added to fixed capital formation. Consumption, fixed capital formation and changes in inventories add up to the so-called national final expenditure. By adding exports final expenditure is obtained. Intermediate consumption, goods and services used upon production, is not part of final expenditure.

Final expenditure

The sum of the National final expenditure and the exports of goods and services. This variable is by definition equal to the disposable final expenditure (GDP and imports).

National final expenditure

The sum of the consumption of households and the government, gross fixed capital formation and changes in inventories.

Final consumption expenditure

Expenditure on goods or services that are used for the direct satisfaction of individual or collective needs. Expenses may be made at home or abroad, but they are always made by resident institutional units, that is households or institutions residing in the Netherlands. By definition only households, non-profit institutions serving households (NPISHs) and government institutions consume. Enterprises do not: expenses they make on goods and services are thought to serve production and are therefore classified as intermediate consumption of fixed capital formation. The general government is a special case. The government also has intermediate consumption, just like enterprises. But the output delivered by the government which is not directly paid for, non-market output (like safety), is classified as consumption by the general government. It is said that the government 'consumes its own production'. The system of national accounts demands that all that is produced is also consumed (or serves as an investment). By convention, government output is consumed by the government itself. This is not the only consumption by the general government. It also contains social transfers in kind. In the Netherlands this mainly concerns health care bills paid for by the government and an allowance for the rent.

Households including NPISHs

Consumption expenditure by households and non-profit institutions serving households (NPISHs). Not all expenses made by households are seen as consumptive, households may invest as well. These investments mainly concern the purchase of houses and substantial costs on maintenance. Small costs on maintenance, indoor painting and the purchase of furniture is classified as consumption. This also applies to the purchase of cars and car maintenance.

Gross fixed capital formation

Expenditure on produced assets that are used in a production process for more than one year. This may concern a building, dwelling, transport equipment or a machine. This in contrast with goods and services which are used up during the production process, the so-called intermediate use (e.g. iron ore). Fixed capital does lose value over time as a result of normal wear and tear and obsolescence. This is called consumption of fixed capital (also called depreciation). The value of fixed capital formation in which the consumption of fixed capital is not deducted is called gross fixed capital formation. Deduction of the consumption of fixed capital results in net fixed capital formation.

The following types of fixed assets exist: dwellings and other buildings and structures, machinery and equipment, transport equipment, weapon systems (included in machinery and equipment), computers, software, telecommunication equipment, research and development, cultivated biological resources, mineral exploration and evaluation, and costs of ownership transfer on non-produced assets, like land, contracts, leases and licenses.

Enterprises and households

Gross fixed capital formation of (financial or non-financial) corporations and households and the sector households including non-profit institutions serving households (NPISHs). Fixed capital formation by households concerns houses, but also investments by the self-employed.

Additional details

The additional details of some variables in the previous parts of this table are being given in this section.

Final consumption expenditure

Expenditure on goods or services that are used for the direct satisfaction of individual or collective needs. Expenses may be made at home or abroad, but they are always made by resident institutional units, that is households or institutions residing in the Netherlands. By definition only households, non-profit institutions serving households (NPISHs) and government institutions consume. Enterprises do not: expenses they make on goods and services are thought to serve production and are therefore classified as intermediate consumption of fixed capital formation. The general government is a special case. The government also has intermediate consumption, just like enterprises. But the output delivered by the government which is not directly paid for, non-market output (like safety), is classified as consumption by the general government. It is said that the government 'consumes its own production'. The system of national accounts demands that all that is produced is also consumed (or serves as an investment). By convention, government output is consumed by the government itself. This is not the only consumption by the general government. It also contains social transfers in kind. In the Netherlands this mainly concerns health care bills paid for by the government and an allowance for the rent.

Expenditure classification

This classification focuses on the expenses for consumption goods and services. The total final consumptions is divided to sectors which actually financed the consumption expenditures.

Households including NPISHs

Consumption expenditure by households and non-profit institutions serving households (NPISHs). Not all expenses made by households are seen as consumptive, households may invest as well. These investments mainly concern the purchase of houses and substantial costs on maintenance. Small costs on maintenance, indoor painting and the purchase of furniture is classified as consumption. This also applies to the purchase of cars and car maintenance.

Total

Domestic final consumption

Final consumption expenditures which took place in the Netherlands.

Consumption by residents abroad

Final consumption by residents in the rest of the world.

Consumption non-residents in Netherlands

Final consumption by non-residents in the Netherlands.

Gross fixed capital formation

Expenditure on produced assets that are used in a production process for more than one year. This may concern a building, dwelling, transport equipment or a machine. This in contrast with goods and services which are used up during the production process, the so-called intermediate use (e.g. iron ore). Fixed capital does lose value over time as a result of normal wear and tear and obsolescence. This is called consumption of fixed capital (also called depreciation). The value of fixed capital formation in which the consumption of fixed capital is not deducted is called gross fixed capital formation. Deduction of the consumption of fixed capital results in net fixed capital formation.

The following types of fixed assets exist: dwellings and other buildings and structures, machinery and equipment, transport equipment, weapon systems (included in machinery and equipment), computers, software, telecommunication equipment, research and development, cultivated biological resources, mineral exploration and evaluation, and costs of ownership transfer on non-produced assets, like land, contracts, leases and licenses.

By type of fixed assets

Gross fixed capital formation by type of capital goods

Fixed assets from production and imports

Fixed assets from production and imports.

Other buildings and structures

Other buildings and structures consist of buildings other than dwellings, other structures and land improvements, as defined below. Uncompleted buildings and structures are included to the extent that the ultimate user is deemed to have taken ownership, either because the construction is for own use or as evidenced by the existence of a contract of sale/purchase. Buildings and structures acquired for military purposes are included. The value of other buildings and structures is net of the value of land underlying them, which is included in land if separately classified.

Costs of ownership transfer of land

The costs of ownership transfer of land.

Sales of used fixed assets (-)

Sales of used fixed assets

By economic activity of destination

Gross fixed capital formation by economic activity of destination

Sales of used fixed assets (-)

Sales of used fixed assets.

Exports by groups of products

Exports by groups of products in according to standard products classification CPA 2008.

Consumption non-residents in Netherlands

Final consumption by non-residents in the Netherlands.

Exports of services

Transactions in services (sales, barter and gifts) from residents (in the Netherlands) to non-residents. Exports of goods occurs when economic ownership of goods is passed from residents to non-residents. Exports of services include among others the following cases: transportation by resident carriers abroad, harbor services and ship maintenance to non-residents, works performed abroad by resident contractors. Expenses made in the Netherlands by foreign tourists, diplomats and cross-border workers.

Consumption non-residents in Netherlands

Final consumption by non-residents in the Netherlands.