GDP, output and expenditures; changes, Quarterly National Accounts

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Description topics

Production approach to GDP

The way GDP is formed by underlying components in the so-called production approach. In this approach GDP equals the sum of value added over all branches (including non-commercial ones). Value added is thereby registered at basic prices. GDP at market prices is obtained by adding taxes less subsidies on production and the difference between imputed and paid VAT. The included taxes and subsidies apply both to produced and imported goods and services. Examples of these are VAT and taxes on import.

Value added basic prices

The value of all goods and services produced (production value or output), minus those that have been intermediately used upon production (intermediate consumption). Value added is rated at basic prices: purchaser's prices minus trade and transport margins and taxes on products paid and plus subsidies on products received. Intermediate consumption is rated at purchaser's prices minus non-deductible VAT.
Included is the output by all kind-of-activity units residing in the Netherlands, also those that are held by foreign owners.
Net value added can be obtained by deducting consumption of fixed capital from gross value added.

A-F Agriculture and industry

This category is made up of the categories:
A Agriculture, forestry and fishing
B Mining and quarrying
C Manufacturing
D Electricity, gas, steam and air conditioning supply
E Water supply; sewerage, waste management and remediation activities
F Construction

B-E Industry (no construction), energy

This category is made up of the categories:
B Mining and quarrying
C Manufacturing
D Electricity, gas, steam and air conditioning supply
E Water supply; sewerage, waste management and remediation activities

C Manufacturing

Manufacturing

13-15 Man. of textile-, leather products

Manufacture of textiles and textile products and of leather and leather products
This category is made up of the categories:
13 Manufacture of textiles
14 Manufacture of wearing apparel
15 Manufacture of leather, products of leather and footwear

31-33 Other manufacturing and repair

Manufacture of furniture and other products; repair and installation of machinery and equipment
This category is made up of the categories:
31 Manufacture of furniture
32 Manufacture of other products (rest)
33 Repair and installation of machinery and equipment

G-N Commercial services

Commercial services
This category is made up of the categories:
G Wholesale and retail trade
H Transportation and storage
I Accommodation and food serving
J Information and communication
K Financial institutions
L Renting and buying and selling of real estate
M Consultancy, research and other specialized business services
N Renting and leasing of tangible goods and other business support services

M-N Business services

Business services
This category is made up of the categories:
M Consultancy, research and other specialized business services
N Renting and leasing of tangible goods and other business support services

M Other specialised business services

Consultancy, research and other specialized business services
This section includes:
- specialized professional, scientific and technical activities. These activities require a high degree of training, and make specialized knowledge and skills available to users.

N Renting and other business support

Renting and leasing of tangible goods and other business support services

Total

77 Renting and leasing of tangible goods

77 Renting and leasing of motor vehicles, consumer goods, machines and
other tangible goods

78 Employment activities

78 Employment placement, provision of temporary employment and payrolling

79 Travel agencies, tour operators etc

79 Travel agencies, tour operators, tourist information and reservation

80-82 Security and other services

This category is made up of the categories:
80 Security and investigation
81 Facility management
82 Other business services

O-U Non-commercial services

Non-commercial services
This category is made up of the categories:
O Public administration, public services and compulsory social security
P Education
Q Health and social work activities
R Culture, sports and recreation
S Other service activities
T Activities of households as employers; undifferentiated goods- and service- producing activities of households for own use
U Extraterritorial organizations

R-U Culture, recreation, other services

Culture, recreation, other services
This category is made up of the categories:
R Culture, sports and recreation
S Other service activities
T Activities of households as employers; undifferentiated goods- and service- producing activities of households for own use
U Extraterritorial organizations

National net lending or net borrowing

The calculation of the national net lending or net borrowing starting with gross domestic product (GDP). The national financing balance (net lending or net borrowing) is the balance of resources and expenditure on the current account and the capital account of the joint domestic sectors. In the financial account the balance gives the amount new loans are entered into with financial assets abroad and/or are sold (at a deficit) or for any amount to be repaid debts abroad and/or financial assets are purchased (at a surplus). In theory net lending or borrowing equals the change in assets less liabilities. In practice a statistical difference between the two remains.

Surplus of the nation on income approach

The approach of net lending or net borrowing through the surplus of national income.

Gross domestic product

Gross domestic product (GDP) is a quantity that expresses the size of an economy. The volume change of GDP during a reference period expresses the growth or shrinkage of the economy. Gross domestic product at market prices is the final result of the production activity of resident producer units. It can be defined in three ways:

- production approach: GDP is the sum of gross value added of the various institutional sectors or the various industries plus taxes and less subsidies on products (which are not allocated to sectors and industries). It is also the balancing item in the total economy production account;
- expenditure approach: GDP is the sum of final uses of goods and services by resident institutional units (final consumption and gross capital formation), plus exports and minus imports of goods and services;
- income approach: GDP is the sum of uses in the total economy generation of income account (compensation of employees, taxes on production and imports less subsidies, gross operating surplus and mixed income of the total economy).

Net domestic product at market prices (NDP) can be obtained by deducting consumption of fixed capital from GDP.

Gross national income

Total primary income received by resident institutional units: compensation of employees, net operating surplus / mixed income, net property income and net taxes on production and imports less subsidies. Incomes flowing from one domestic sector to another have no effect on net national income. Gross national income (at market prices) equals GDP minus primary income payed by resident institutional units to non-resident institutional units plus primary income received by resident institutional units from the rest of the world. The division of payments by member states to the European Union is largely based upon differences in gross national income.

National income is not a production concept but an income concept, which is more significant if expressed in net terms, i.e. after deduction of depreciation (consumption of fixed capital).

Gross disposable national income

The sum of the gross disposable incomes of the institutional sectors. Gross national disposable income equals gross national income (at market prices) minus current transfers (current taxes on income, wealth et cetera, social contributions, social benefits and other current transfers) payed to non-resident units, plus current transfers received by resident units from the rest of the world. Because disposable national income is not a production concept but an income concept, it is usually expressed in net terms, i.e. after deduction of depreciation (consumption of fixed capital).

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.

Adjustm. change in pension entitlements

Adjustment for net equity in pension funds reserves (surplus of the nation). Generally speaking the adjustment is made to pass changes in pension funds reserves through to household savings. The adjustment equals contributions to pension schemes less pension benefits. To estimate national savings only cross-border adjustments are relevant. The adjustments are also made for reserves of non-resident households who are customers of Dutch insurance companies. Reverse adjustments are necessary for these companies.

Gross national savings

The portion of national disposable income that has not been used for final consumption expenditure. This equals is the sum of the net savings of the various institutional sectors. It is usually expressed in net terms, i.e. after deduction of depreciation (consumption of fixed capital).

Gross capital formation (-)

Gross capital formation consists of:
- gross fixed capital formation
- changes in inventories
- acquisitions less disposals of valuables

Surplus of the nation on income

This variable shows the amount left over from the national disposable
income after the consumption and investment had been expended. This amount
is by definition equal to the surplus of the nation on current
transactions.