Structure national net lending/borrowing; National Accounts

Table explanation

Description topics

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.

Net primary income from rest of world

Received primary incomes from the rest of the world less paid primary incomes to the rest of the world.

When a residing enterprise has been active abroad for more than one year, the local kind-of-activity unit is no longer considered a resident in the Netherlands but a resident in the country in which it has become active. Vice versa, a kind-of-activity unit of foreign origin is no longer seen as a non-resident after it has been active in the Netherlands for more than one year. Resident persons who settle abroad are no longer seen as residents in the Netherlands but as residents in the country they moved to one year after they have left. Vice versa a foreigner who has settled in the Netherlands becomes a resident one year after he or see moved in. Students are an exception to this rule. They are always considered residents in the country they lived in before commencing their study.

Net primary income from rest of world

Primary income from rest of world

Compensation of employees, property income and (EU) subsidies received from the rest of the world.

Total

Compensation of employees

Compensation of employees received from the rest of the world. This is largely due to residents in the Netherlands who have settled abroad for less than one year and work for a non-residential enterprise. This could however by an affiliate to a Dutch enterprise. After these persons have settled abroad for more than one year they become non-residents in the Netherlands and their compensation is no longer part of the flow of income from the rest of the world to the Netherlands. The compensation of cross-border workers who live in the Netherlands but work abroad remains however part of this flow.

Property income

Received interest, dividends, reinvested earnings on direct foreign investment and other property income from the rest of the world.

Subsidies received from rest of world

Subsidies received from the rest of the world, such as from the European Union.

Primary income paid to rest of world

Compensation of employees, property income and (EU) taxes on production and imports paid to the rest of the world.

Total

Compensation of employees

Compensation of employees paid to the rest of the world. This is largely due to residents in the Netherlands who have settled abroad for less than one year and work for a non-residential enterprise. This could however by an affiliate to a Dutch enterprise. After these persons have settled abroad for more than one year they become non-residents in the Netherlands and their compensation is no longer part of the flow of income from the rest of the world to the Netherlands. The compensation of cross-border workers who live in the Netherlands but work abroad remains however part of this flow.

Property income

Paid interest, dividends, reinvested earnings on direct foreign investment and other property income from the rest of the world.

Taxes on production and imports

Taxes on production and imports paid to the rest of the world.

Gross national income

Gross national income (at market prices) represents total primary income receivable by resident institutional units: compensation of employees, taxes on production and imports less subsidies, property income (receivable less payable), operating surplus and mixed income.
Gross national income (at market prices) equals GDP minus primary income payable by resident institutional units to non-resident institutional units plus primary income receivable by resident institutional units from the rest of the world.
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 the consumption of fixed capital.

Consumption of fixed capital (-)

The decline in value of fixed assets owned, as a result of normal wear and tear and obsolescence.

For the estimation of the consumption of fixed capital the perpetual inventory method (PIM) is applied. The capital stock at the beginning of the year is brought to replacement value because of price changes. The fixed capital formation during the year is added to this capital stock. Next it is diminished with the value of capital goods discarded. This gives to value of capital stock at the end of the year. The consumption of fixed obtained by applying a depreciation percentage.
This method may differ considerably from the method used to calculate depreciation in business accounts, which is based on historical costs or fiscal life span.

Net national income

Net national income remains after deducting consumption of fixed capital from gross national income.

Net current transfers from rest of world

The difference between current transfers received from the rest of the world and provided to the rest of the world.

When a residing enterprise has been active abroad for more than year, the local kind-of-activity unit is no longer considered a resident in the Netherlands but a resident in the country in which it is active. Vice versa, a kind-of-activity unit of foreign origin is no longer seen as a non-resident after it has been active in the Netherlands for more than one year. Resident persons who settle abroad are no longer seen as residents in the Netherlands but as residents in the country they moved to one year after they have left. Vice versa a foreigner who has settled in the Netherlands becomes a resident one year after he or she has moved in. Students are an exception to this rule. They are always considered residents in the country they lived in before commencing their study.

Net current transfers from rest of world

Current transfers from rest of world

Current taxes on income and wealth, social contributions, social benefits in cash and other current transfers received from rest of the world.

Total

Current taxes on income and wealth

Current taxes on income and wealth received from rest of the world. Taxes on income consist of taxes on incomes, profits and capital gains. They are assessed on the actual or presumed incomes of individuals, households, corporations or NPIs. They include taxes assessed on holdings of property, land or real estate when these holdings are used as a basis for estimating the income of their owners.
These include: corporate income tax, payroll tax, income tax, dividend tax, gambling tax and one-time revenue in connection with the liquidation of holding companies.

Social contributions

Social contributions received from rest of the world. Social contributions include social security contributions, private social contributions (among which contributions to pension schemes) and imputed social contributions. Employers, employees, self-employed persons and non-active persons pay these contributions. Actually, the employers' part is paid directly to the insurers. However, in the national accounts, the employers' contributions are supposed to be part of primary income of households (i.e. the income from direct participation in the production process). Therefore, in first instance these contributions are treated as payments by employers to households as compensation of employees, who are deemed to pay them to the insurers in the income account.

Social benefits in cash

Social benefits other than social transfers in kind is made up of three sub-headings:
Social security benefits in cash;
Other social insurance benefits;
Social assistance benefits in cash.

Other current transfers

Other current transfers consist of non-life insurance premiums, non-life insurance claims, current transfers within general government, current international co-operation and miscellaneous current transfers.

Current transfers paid to rest of world

Current taxes on income and wealth, social contributions, social benefits in cash and other current transfers paid to rest of the world.

Total

Current taxes on income and wealth

Current taxes on income and wealth paid to the rest of the world. Taxes on income consist of taxes on incomes, profits and capital gains. They are assessed on the actual or presumed incomes of individuals, households, corporations or NPIs. They include taxes assessed on holdings of property, land or real estate when these holdings are used as a basis for estimating the income of their owners. These include: corporate income tax, payroll tax, income tax, dividend tax, gambling tax and one-time revenue in connection with the liquidation of holding companies.

Social contributions

Social contributions paid to the rest of the world. Social contributions include social security contributions, private social contributions (among which contributions to pension schemes) and imputed social contributions. Employers, employees, self-employed persons and non-active persons pay these contributions. Actually, the employers' part is paid directly to the insurers. However, in the national accounts, the employers' contributions are supposed to be part of primary income of households (i.e. the income from direct participation in the production process). Therefore, in first instance these contributions are treated as payments by employers to households as compensation of employees, who are deemed to pay them to the insurers in the income account.

Social benefits in cash

Social benefits other than social transfers in kind is made up of three sub-headings:
Social security benefits in cash;
Other social insurance benefits;
Social assistance benefits in cash.

Other current transfers

Other current transfers consist of non-life insurance premiums, non-life insurance claims, current transfers within general government, current international co-operation and miscellaneous current transfers.

Net disposable national income

The sum of the net 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) paid 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

The adjustment for the change in pension entitlements represents the adjustment needed to make appear in the saving of households the change in the pension entitlements on which households have a definite claim. The pension entitlement change comes from contributions and benefits recorded in the secondary distribution of income account. Since households are treated in the financial accounts and balance sheets of the system as owning the pension entitlements, an adjustment item is necessary to ensure that any excess of pension contributions over pension receipts does not affect household saving.
In order to neutralise this effect, an adjustment equal to:
the total value of actual and imputed social contributions in respect of pensions payable into pension schemes in which households have a definite claim
plus the total value of contribution supplements payable out of property income attributed to pension schemes beneficiaries
minus the value of associated service charges
minus the total value of pensions paid out as social insurance benefits by pension schemes
is added to the disposable income, or adjusted disposable income, of households in the use of income accounts before arriving at saving.
In this way, the saving of households is the same as it would be had pension contributions and pension receipts not been recorded as current transfers in the secondary distribution of income account. This adjustment item is necessary in order to reconcile the saving of households with the change in their pension entitlements recorded in the financial account of the system. Opposite adjustments are, of course, needed in the use of income accounts of the units responsible for paying pensions.

Net national saving

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 consumption of fixed capital.

Net 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 licences.

Changes in inventories (-)

Changes in inventories including acquisitions less disposals of valuables.
Changes in the stock of raw materials, semi-finished products, work-in-progress (unfinished works like ships or oil rigs) and finished products still held by the producer. Changes in stock do not include work-in-progress in construction. Positive changes in inventories arise when products are finished in the reference period but not yet sold. Alternatively, they arise when goods are purchased for intermediate consumption but not yet used. Negative changes in inventories arise when goods from stocks have been sold, or used in the production process. A more extensive list of changes in inventories is found in the European System of Accounts 2010.

In measuring changes in inventories, changes in prices during the reference period are not allowed to have any effect. The initial and final inventory is therefore valued at the same price. Raw materials are valued at the price of purchase. Final products are valued at the selling price. Work-in-progress is valued at the cost-price.

Acquisitions less disposals of valuables consists of the acquisitions less disposals of precious stones, non-monetary gold, antiques, art objects and jewellery that are acquired and held primarily as stores of value. In the national accounts this transaction is mostly combined with changes in inventories.

Surplus nation on current transactions

The net lending (if positive) or borrowing (if negative) of the total economy to / from the rest of the world on current transactions (trade, primary income, current transfers). The surplus of the nation on current transactions is the last item in the use of income account to the rest of the world and consists of: net exports, net primary income from the rest of the world and net current transfers from the rest of the world. The surplus of the nation on current transactions equals the net national savings less the net fixed capital formation.

Surplus nation on current transactions

Net exports

Net exports is the difference between the value of the exports of goods and services and the value of the imports of goods and services.

Total

Net exports of goods

Net exports of goods is the difference between the value of the exports of goods and the value of the imports of goods.

Net exports of services

Net exports of services is the difference between the value of the exports of services and the value of the imports of services.

Net primary income from rest of world

Received primary incomes from the rest of the world less paid primary incomes to the rest of the world.

When a residing enterprise has been active abroad for more than one year, the local kind-of-activity unit is no longer considered a resident in the Netherlands but a resident in the country in which it has become active. Vice versa, a kind-of-activity unit of foreign origin is no longer seen as a non-resident after it has been active in the Netherlands for more than one year. Resident persons who settle abroad are no longer seen as residents in the Netherlands but as residents in the country they moved to one year after they have left. Vice versa a foreigner who has settled in the Netherlands becomes a resident one year after he or see moved in. Students are an exception to this rule. They are always considered residents in the country they lived in before commencing their study.

Net primary income

Primary income from rest of world

Compensation of employees, property income and (EU) subsidies received from the rest of the world.

Primary income paid to rest of world (-)

Compensation of employees, property income and (EU) subsidies paid to the rest of the world.

Net current transfers from rest of world

The difference between current transfers received from the rest of the world and provided to the rest of the world.

When a residing enterprise has been active abroad for more than year, the local kind-of-activity unit is no longer considered a resident in the Netherlands but a resident in the country in which it is active. Vice versa, a kind-of-activity unit of foreign origin is no longer seen as a non-resident after it has been active in the Netherlands for more than one year. Resident persons who settle abroad are no longer seen as residents in the Netherlands but as residents in the country they moved to one year after they have left. Vice versa a foreigner who has settled in the Netherlands becomes a resident one year after he or she has moved in. Students are an exception to this rule. They are always considered residents in the country they lived in before commencing their study.

Net current transfers

Current transfers from rest of world

Current taxes on income and wealth, social contributions, social benefits in cash and other current transfers received from rest of the world.

Current transfers paid to rest of world

Current taxes on income and wealth, social contributions, social benefits in cash and other current transfers paid to rest of the world.

Adjustm. change in pension entitlements

The adjustment for the change in pension entitlements represents the adjustment needed to make appear in the saving of households the change in the pension entitlements on which households have a definite claim. The pension entitlement change comes from contributions and benefits recorded in the secondary distribution of income account. Since households are treated in the financial accounts and balance sheets of the system as owning the pension entitlements, an adjustment item is necessary to ensure that any excess of pension contributions over pension receipts does not affect household saving.
In order to neutralise this effect, an adjustment equal to:
the total value of actual and imputed social contributions in respect of pensions payable into pension schemes in which households have a definite claim
plus the total value of contribution supplements payable out of property income attributed to pension schemes beneficiaries
minus the value of associated service charges
minus the total value of pensions paid out as social insurance benefits by pension schemes
is added to the disposable income, or adjusted disposable income, of households in the use of income accounts before arriving at saving.
In this way, the saving of households is the same as it would be had pension contributions and pension receipts not been recorded as current transfers in the secondary distribution of income account. This adjustment item is necessary in order to reconcile the saving of households with the change in their pension entitlements recorded in the financial account of the system. Opposite adjustments are, of course, needed in the use of income accounts of the units responsible for paying pensions.

Net capital transfers from rest of world

The difference between capital transfers received from the rest of the world and provided to the rest of the world. Capital transfers require the acquisition or disposal of an asset, or assets, by at least one of the parties to the transaction. Whether made in cash or in kind, they result in a commensurate change in the financial, or non- financial, assets shown in the balance sheets of one or both parties to the transaction. Capital transfers include investment grants, capital taxes, other capital transfers and imputed capital transfers.

Net capital transfers from rest of world

Capital transfers from rest of world

Capital transfers received from the rest of the world.

Capital transfers paid to rest of world

Capital transfers paid to rest of world.

Acq. less disposals of non-prod. assets

Acquisitions less disposals of non-produced non-financial assets mainly consist of sales of land by public (municipal) development corporations to investors in dwellings and non-residential buildings. The valuation of sales and purchases of land is exclusive of VAT and transfer costs. These are included in fixed capital formation.

National net lending or net borrowing

Net lending (+) or net borrowing (-) is the balancing item on the current and the capital account. This balancing item equals the balance of transactions on the financial account; a deficit on the current and capital account is financed by new liabilities and/or the sale of financial assets. In case of a surplus, liabilities are repaid and/or financial assets acquired.
Net lending or net borrowing for the total economy is equal to the balance on the current and the capital account of all institutional sectors. The balance of the financial account for the total economy shows the amount of net lending to or borrowing from the rest of the world.

National net lending or net borrowing

Total financial transactions in assets

Total financial transactions in assets on rest of the rest of the world.

Total financial transactions liabilities

Total financial transactions in liabilities to the rest of the world.

Statistical discrepancy

The statistical discrepancy arises by the use of different sources for the current and capital transactions on the one hand and the financial transactions on the other hand.