National accounts and GDP - Statistics Explained

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National accounts and GDP


Data extracted in August 2020.

Planned article update: August 2021.

Highlights

GDP in the EU-27 increased in 2019, the sixth year in a row; the increase recorded in the euro area was also the sixth consecutive increase.

Diverging structural developments over the last 10 years in the EU-27: construction’s and financial and insurance activities’ shares of total value added down, that of business services up.

In 2019, the EU-27 economy recorded its sixth consecutive annual increase in investment.

Real GDP growth, 2009-2019

National accounts are the source for a multitude of well-known economic indicators which are presented in this article. Gross domestic product (GDP) is the most frequently used measure for the overall size of an economy, while derived indicators such as GDP per inhabitant (per capita) — for example, in euro or adjusted for differences in price levels (as expressed in purchasing power standards, PPS) — are widely used for a comparison of living standards, or to monitor economic convergence or divergence within the European Union (EU).

Moreover, the development of specific GDP components and related indicators, such as those for economic output, imports and exports, domestic (private and public) consumption or investments, as well as data on the distribution of income and savings, can give valuable insights into the main drivers of economic activity and thus be the basis for the design, monitoring and evaluation of specific EU policies.

This article is published every year with annual data. This 2020 edition only describes the situation up to the year 2019. As a consequence, first findings of any COVID-19 related implications will only be possible in the 2021 edition of the article, with the full scale of the crisis only being revealed in later editions.

Full article

Developments for GDP in the EU-27: growth since 2014

The global financial and economic crisis resulted in a severe recession in the EU-27 in 2009 (see Figure 1), followed by a recovery in 2010. The crisis started earlier in Japan and the United States, with negative annual rates of change for GDP (in real terms) already recorded in 2008, deepening in 2009, before rebounding in 2010. By contrast, economic output in China (including Hong Kong) continued to grow at a rapid pace during the crisis (close to 10 % each year), slowing somewhat in subsequent years, but remaining considerably higher than in any of the other economies shown in Figure 1.

The crisis was already apparent in the EU-27 in 2008 when there had been a considerable reduction in the rate of increase for GDP and this was followed by a fall in real GDP of 4.3 % in 2009. The recovery in the EU-27 saw the index of GDP (based on chain linked volumes) increase by 2.2 % in 2010 and there was a further gain of 1.8 % in 2011. Subsequently, GDP contracted 0.7 % in 2012 and the change in 2013 was negligible, before a positive rate of change was recorded in 2014 (1.6 %). From 2015 to 2018, growth was relatively stable, between 2.0 % and 2.8 % each year. In 2019, growth slowed, as the EU-27 recorded a real increase in GDP of 1.5 %.

In the euro area (EA-19), the corresponding rates of change were similar to those recorded in the EU-27: the contractions recorded in 2009 and 2012 were stronger (-4.5 % and -0.9 %) than in the EU-27 and the 2012 contraction was sustained into 2013 (-0.2 %) whereas there was no change in the EU-27 in 2013. While there was growth in the euro area each year that there was growth in the EU-27, the rate of growth in the euro area was normally 0.1 or 0.2 percentage points lower. As such, during the period 2009-2019, real GDP growth in the euro area was somewhat weaker than that in the EU-27 as a whole.

Figure 1: Real GDP rate of change, 2009-2019
(% change compared with the previous year)
Source: Eurostat (naida_10_gdp)

Within the EU, real GDP growth varied considerably, both over time and between EU Member States (see Table 1). After a contraction in all of the EU Member States except Poland in 2009, economic growth resumed in 23 of the Member States in 2010 and growth was also recorded in 23 Member States in 2011. However, in 2012 this development changed, as just over half (14) of the Member States reported economic expansion, while there was falling output in the remaining Member States. Thereafter, a larger majority of Member States once again recorded growth, with the number of countries recording a positive rate of change reaching 16 in 2013 and rising to 23 in 2014 and 26 in 2015 and 2016. All 27 Member States recorded a positive rate of change in 2017 (the first time this had occurred since 2007) and did so again in 2018 and 2019. The one Member State with a negative rate of change in 2015 and 2016 was Greece which recorded falls of 0.4 % and 0.2 % after growth of 0.7 % in 2014 and five successive reductions in economic output during the years from 2009 to 2013.

Table 1: Real GDP rate of change, 2009-2019
Source: Eurostat (naida_10_gdp)

The highest annual growth rates for real GDP in 2019 were recorded in Ireland (5.6 %), Hungary (4.9 %) and Malta (4.7 %), while the lowest rates of change were registered in Germany (0.6 %) and Italy (0.3 %).

Average annual GDP growth of 1.6 % over the last decade in the EU-27 and 1.4 % in the euro area

Poland consistently recorded positive rates of change throughout the period shown in Table 1, as did Albania, Kosovo* (data from 2009 to 2018) and China (data from 2009 to 2018) among the non-member countries in the table. Belgium, Bulgaria, Denmark, Germany, Estonia, Ireland, France, Lithuania, Malta and Slovakia recorded their tenth consecutive positive annual rate of change in 2019; this was also the case in the United Kingdom, Norway, Switzerland and the United States, while Turkey recorded its ninth consecutive positive annual rate of change in 2018.

The effects of the global financial and economic crisis lowered the overall performance of the EU Member State economies when analysing developments over the last decade. The annual average growth rates of the EU-27 and the euro area (EA-19) between 2009 and 2019 were 1.6 % and 1.4 % respectively (see Table 1). The highest growth among the Member States, by this measure, was recorded for Ireland (average annual growth of 6.0 % which includes an exceptional increase in 2015 reflecting the activities of multinational enterprises), followed by Malta (5.7 %), Estonia (3.7 %), Poland (3.6 %) and Lithuania (3.5 %; note that there is a break in series). By contrast, the annual average growth was below 1.0 % in Portugal and Italy and the overall development of real GDP was negative during the period from 2009 to 2019 in Greece.

Cross-country comparisons are often made using purchasing power standards (PPS) which are values adjusted to account for differences in price levels between countries. Note the data shown in Figures 2 and 3 and in Table 2 are in current prices and should not be used for calculating rates of change because of inflation and exchange rate fluctuations.

In 2019, GDP in the EU-27 reached PPS 13.9 trillion (PPS 13 900 billion) — note that for the EU-27 one PPS equals one euro. As such, the EU-27’s GDP in PPS remained behind of that for the United States during every year of the period from 2009 to 2019 (as shown in Figure 2; Please note, however, that PPS figures are intended for cross-country comparisons rather than for temporal comparisons since they cannot be considered as time series for methodological reasons). It is interesting to note that China historically had a lower level of economic output than either the EU-27 or the United States, but that this situation has changed with the rapid transformation and continued expansion of the Chinese economy. China’s GDP in PPS reached a level in 2013 that was — for the first time — higher than that recorded for the EU-27. In 2016, China’s GDP in PPS drew level with that recorded in the United States and in 2017 it surpassed the United States’ level (a situation that China has since maintained).

Figure 2: GDP at current market prices, 2009-2019
(billion PPS)
Source: Eurostat (prc_ppp_ind)

In 2019, Germany accounted for more than one fifth of the EU-27’s GDP in PPS terms

The euro area accounted for 81.1 % of the EU-27’s GDP in 2019 (when measured in PPS terms), down from 83.2 % in 2009. In 2019, the sum of the four largest EU-27 Member State economies (Germany, France, Italy and Spain) accounted for just over three fifths (60.7 %) of the EU-27’s GDP, which was 2.0 percentage points lower than their share a decade earlier (in 2009). Germany alone accounted for 22.4% of the EU-27’s GDP in 2019, up from 21.5 % in 2009. The shares of the other three largest Member States all fell between 2009 and 2019, down 1.8 percentage points in Italy, 1.0 percentage points in Spain and 0.1 percentage points in France.

In 2019, GDP per inhabitant averaged EUR 31 100 across the EU-27

To evaluate standards of living, it is commonplace to use GDP per inhabitant, in other words, adjusted for the size of an economy in terms of its population: the population of the EU-27 in 2019 was 448 million. In 2019, average GDP per inhabitant for the EU-27 (in current prices) was EUR 31.1 thousand. Values expressed in PPS have been adjusted for differences in price levels across countries. The relative position of individual countries can be expressed through a comparison with the EU-27 average, with this set to equal 100 (see the right hand half of Table 2). Based on this measure, the highest value among the EU-27 Member States was recorded for Luxembourg, where GDP per inhabitant in PPS was about 2.6 times as high as the EU-27 average in 2019 (which is partly explained by the importance of cross-border workers from Belgium, France and Germany). On the other hand, GDP per inhabitant in PPS was just over half the EU-27 average in Bulgaria.

Table 2: GDP at current market prices, 2009 and 2017-2019
Source: Eurostat (prc_ppp_ind)

The development of PPS figures during the past decade suggests that some convergence in living standards took place. Most Member States that joined the EU in 2004, 2007 or 2013 moved from a position some way below the EU-27 average in 2009 to one closer to the EU-27 average in 2019, despite some setbacks during the global financial and economic crisis — see Figure 3. Cyprus was an exception, as it moved from above the EU-27 average (106 % of the EU-27 average in 2009) to a position below it (89 %). Among the older Member States, Italy and Spain also moved from a position above the EU-27 average to one below it. Greece and Portugal moved further below the EU-27 average. Denmark, Germany and Luxembourg moved further ahead of the EU-27 average, as most notably did Ireland. The remaining EU-15 Member States — Austria, Belgium, France, Sweden, Finland and the Netherlands — moved downwards from a position above the EU-27 average in 2009 to one closer to (but still above) the EU-27 average in 2019.

Figure 3: GDP per capita at current market prices, 2009 and 2019
(EU-27 = 100; based on PPS per inhabitant)
Source: Eurostat (prc_ppp_ind)

Gross value added in the EU-27 by economic activity

Close to three quarters of the EU-27’s total value added in 2019 was generated within the services sector

Looking at GDP from the output side, Table 3 gives an overview of the relative importance of 10 economic activities (as defined by NACE Rev. 2) in terms of their contribution to total gross value added at current basic prices.

Between 2009 and 2019, industry’s share of EU-27 value added increased 0.7 percentage points to 19.7 %, thereby overtaking distributive trades, transport, accommodation and food services as the largest of these 10 activities; the share of total gross value added in distributive trades, transport, accommodation and food services was identical in 2009 and 2019 at 19.3 %. The largest increase during this period, up 1.1 percentage points from 10.2 % to 11.3 %, was recorded for professional, scientific, technical, administrative and support services — hereafter referred to as business services — which became the fourth largest activity, overtaking real estate activities. The only other activities to record an increased share were information and communication services (up 0.3 percentage points to 5.0 %) and agriculture, forestry and fishing (up 0.1 percentage points to 1.8 %).

The third largest activity in 2019 (as measured by gross value added) was public administration, defence, education, human health and social work activities, which saw its share of total value added decrease by 0.6 percentage points to reach 18.7 % in 2019. The other activities that recorded similarly large falls in their share of output were construction (down 0.6 percentage points to 5.6 %) and financial and insurance services (down 0.7 percentage points to 4.5 %). The two remaining activities both recorded smaller falls in their share of output: real estate activities’ share fell 0.1 percentage points to 10.8 % and thereby moved from fourth to fifth largest activity; the second smallest contribution (ahead of agriculture, forestry and fishing) came from the arts, entertainment and other services, whose share dropped 0.3 percentage points to 3.3 %.

Table 3: Gross value added at current basic prices, 2009 and 2019
(% share of total gross value added)
Source: Eurostat (nama_10_a10)

Services contributed 72.9 % of the EU-27’s total gross value added in 2019 compared with 73.2 % in 2009. The relative importance of services was particularly high in Luxembourg, Malta, Cyprus, France, Greece, the Netherlands, Belgium and Portugal, where they accounted for at least three quarters of total value added. By contrast, the share of services was between 61 % and 66 % in Ireland, Czechia, Romania, Poland, Slovakia, Slovenia and Hungary, all of which recorded relatively high shares for industry.

Diverging developments of economic activities over the last decade

Structural change is, at least in part, a result of phenomena such as technological change, developments in relative prices, outsourcing and globalisation, often resulting in manufacturing activities and some services (those that can be provided remotely, such as online or through call centres) being moved to lower labour-cost regions, both within and outside the EU-27. Furthermore, several activities were particularly affected by the global financial and economic crisis and its aftermath, but for most activities the main impact of the crisis was between 2007 and 2009, in other words before the time series shown in Figures 4 and 5.

Between 2009 and 2014, output from agriculture, forestry and fishing in the EU-27 fluctuated, with rates of change ranging from -4.7 % to 5.4 %. Thereafter the changes were more subdued, with falls of 0.7 % and 1.1 % in 2015 and 2016 followed by three relatively small expansions (0.4 %-1.3 %) between 2017 and 2019. Overall, output was 5.0 % higher in 2019 than it had been in 2009. EU-27 industrial output increased 11.9 % between 2009 and 2011 as it rebounded from the crisis, but fell by 2.3 % between 2011 and 2013. Thereafter, industrial output grew at a relatively fast pace the next four years (with annual increases between 2.4 % and 3.3 %) and a more subdued pace (1.9 %) in 2018 before experiencing a contraction of 0.5 % in 2019. Industrial output was 24.5 % higher in 2019 than in 2009. Construction recorded the deepest and longest contraction following the crisis, with its output falling by 14.9 % across the EU-27 between 2009 and 2013 (having already fallen in 2008 and 2009), with output falling every year during this period. As such, the 1.6 % increase recorded for construction in 2015 (after no change in 2014) was the first annual growth in eight years and was followed by growth between 1.3 % and 3.8 % through to 2019. Despite this recent period of sustained growth, construction output in 2019 was 3.4 % lower than it had been in 2009 (and therefore considerably lower than it had been before the beginning of the crisis).

Two service activities — information and communication services and real estate activities — posted positive annual rates of change each year between 2009 and 2019. A similar situation was recorded for business services with the exception of a modest decline of 0.2 % in 2012, for public administration, defence, education, human health and social work activities except for no change in 2012 and a small decline of 0.1 % in 2013, and for distributive trades, transport, accommodation and food services except for a decline of 0.5 % in 2013. Among these, the fastest overall growth between 2009 and 2019 was for information and communications, as output in 2019 was 48.9 % higher than in 2009; the slowest growth was for public administration, defence, education, human health and social work activities (up 9.5 % overall). The two remaining service activities — financial and insurance activities as well as arts, entertainment and other services — both recorded three years of falling output between 2009 and 2019 and relatively modest overall growth, 5.4 % and 4.8 % respectively.

In 2019, all activities across the EU-27 reported growth in their gross value added compared with 2018, except for industry. The activities with the strongest growth were information and communication activities (3.9 %) and construction (3.4 %). Industrial output fell 0.5 %, while the slowest growth among the other activities was for agriculture, forestry and fishing (0.4 %).

Figure 4: Developments for real gross value added, EU-27, 2009-2019
(2010 = 100)
Source: Eurostat (nama_10_a10)


Figure 5: Developments for real gross value added, EU-27, 2009-2019
(2010 = 100)
Source: Eurostat (nama_10_a10)

Labour productivity

To eliminate the effects of inflation, labour productivity per person employed can be calculated using data adjusted for price changes. An analysis of labour productivity per person employed in real terms (based on chain linked volumes) over the 10-year period from 2009 to 2019 shows increases for most economic activities in the EU-27, with the largest productivity gains being recorded for agriculture, forestry and fishing (up overall by 30.1 %), industry (24.3 %) and information and communication services (22.8 %) — see Figure 6. Note that a precise comparison of labour productivity levels in real terms between activities can only be analysed for reference year 2010 due to the non-additivity of chain linked volumes.

Figure 6: Real labour productivity, EU-27, 2009, 2014 and 2019
(thousand EUR per person employed)
Source: Eurostat (nama_10_a10) and (nama_10_a10e)

Further data on the development of real labour productivity measured either per person employed or per hour worked are shown in Table 4. Labour productivity per person employed increased, in real terms, between 2009 and 2019 in nearly all EU-27 Member States, with Greece recording a fall (no data are available for Malta). Equally, over the same period labour productivity per hour worked also increased in all EU-27 Member States except for Greece (again, no data are available for Malta). Leaving aside those Member States with a break in series (see Table 4), the largest increases (in percentage terms) for both of these real labour productivity measures were recorded in Romania, Bulgaria, Estonia and Latvia, while the lowest (aside from Greece) were recorded in Luxembourg and Italy.

Table 4: Real labour productivity, 2009, 2014 and 2019
Source: Eurostat (nama_10_gdp) and (nama_10_a10_e)

Consumption expenditure

Turning to an analysis of the development of GDP components from the expenditure side, it can be noted that final consumption expenditure across the EU-27 rose by 10.8 % in volume terms between 2009 and 2019 (see Figure 7), despite slight falls in 2012 and 2013. Final consumption expenditure of general government rose at a somewhat slower pace, up 10.0 % between 2009 and 2019. During the same period, gross capital formation was relatively volatile: it increased between 2009 and 2011 by 8.2 %, fell by almost the same amount (8.1 %) between 2011 and 2013, and then followed an upward path through to 2019, growing 26.9 % between 2013 and 2019. The growth in exports exceeded the growth in imports between 2009 and 2013, as well as in 2017, whereas imports grew faster in five of the six years from 2014 to 2019. Over the period 2009-2019, exports increased overall by 61.0 % whereas imports increased by 55.3 %.

Figure 7: Developments for real consumption expenditure, gross capital formation, exports and imports, EU-27, 2009-2019
(2010 = 100)
Source: Eurostat (nama_10_gdp)

After its fall in 2009, EU-27 consumption expenditure by households and non-profit institutions serving households (NPISH) recovered in 2010 (up 0.9 % in volume terms) and 2011 (0.3 %), before falling again in 2012 (down 0.9 %) and 2013 (down 0.5 %). Thereafter, this expenditure increased during six consecutive years, with increases initially accelerating from 1.1 % to 2.2 % before slowing to 1.6 % in 2019.

In 2010, the pace of growth for EU-27 general government expenditure slowed in volume terms and this rate of change remained relatively stable (within the range of -0.2 % to 0.4 %) between 2011 and 2013, before returning to somewhat stronger growth (between 1.0 % and 2.0 %) from 2014 to 2019.

Investment

Despite an increase in 2011 (2.0 %), EU-27 gross fixed capital formation failed to fully recover from its sharp fall in 2009 (-11.3 %) and returned to a negative rate of change in 2012 and 2013. However, gross fixed capital formation in the EU-27 increased during the period 2014-2019, rising each year in the range of 2.1 % to 5.6 %.

Figure 8: Real annual rate of change in expenditure components of GDP, EU-27, 2009-2019
(%)
Source: Eurostat (nama_10_gdp)

In current price terms, consumption expenditure by households and non-profit institutions serving households contributed 53.2 % of the EU-27’s GDP in 2019, the share of gross capital formation was 22.5 % and that of general government expenditure 20.6 %, while the external balance of goods and services was 3.8 % (see Figure 9).

Figure 9: Expenditure components of GDP at current market prices, EU-27, 2019
(% share of GDP)
Source: Eurostat (nama_10_gdp), (tec00009), (tec00010), (tec00011) and (tec00110)

Among the EU-27 Member States, there was a wide variation in investment intensity (see Figure 10) and this may, in part, reflect different stages of economic development as well as growth dynamics over recent years. In 2019, gross fixed capital formation (in current prices) as a share of GDP was 22.1 % in the EU-27 and almost the same (22.0 %) in the euro area. It was highest by far in Ireland (45.6 %), while Hungary (28.6 %), Czechia (26.2 %) and Estonia (26.1 %) also recorded shares above 25.0 %. The lowest share by far was in Greece (11.4 %).

Figure 10: Gross fixed capital formation at current market prices, 2019
(% share of GDP)
Source: Eurostat (nama_10_gdp)

The vast majority of investment in the EU-27 was made by the private sector, as can be seen from Table 5: in 2019, investment by businesses and households accounted for 19.4 % of the EU-27’s GDP, whereas the equivalent figure for public sector investment was 3.0 %. Relative to GDP, Hungary and Cyprus (both 5.8 %; 2018 data) had the highest ratios of public investment to GDP, while investment by the business sector was highest in Ireland (19.1 %; 2018 data), Czechia (16.9 %) and Sweden (16.4 %) and by households was highest in Finland (7.2 %) and Cyprus (7.1 %; 2018 data). Investment by households (as a share of GDP) in 2018 was notably lower than in 2009 in Greece, Cyprus, Spain and Ireland, while it was notably higher in Romania (2019 compared with 2009).

Table 5: Investment at current market prices, 2009, 2014 and 2019
(% share of GDP)
Source: Eurostat (nasa_10_ki)

Income

An analysis of GDP within the EU-27 from the income side shows that the distribution between the production factors of income resulting from the production process was dominated by the compensation of employees, which accounted for 47.5 % of GDP at current market prices in 2019. The share for gross operating surplus and mixed income was 40.6 % of GDP, while that for taxes on production and imports less subsidies was 11.9 % (see Figure 11). Ireland had the lowest share of the compensation of employees in GDP (28.2 %), followed by Greece (34.7 %), while shares in excess of 50.0 % were recorded in Slovenia, France, Denmark and Germany (where the share peaked at 53.6 %). In the case of Ireland this particularly low share is a consequence of globalisation related effects.

Figure 11: Distribution of income at current market prices, 2019
(% share of GDP)
Source: Eurostat (nama_10_gdp)

The income aggregates had, by 2011, recovered from their losses experienced during the financial and economic crisis. Income from the compensation of employees increased every year between 2009 and 2019 in the EU-27, gaining 30.5 % over this period (in current price terms). For the gross operating surplus and mixed income, the overall growth was almost the same (up 29.9 %); this increase was composed of annual increases every year except for 2012. Income from taxes on production and imports increased each and every year between 2009 and 2019, resulting in growth of 43.1 % overall.

Figure 12: Development of income at current market prices, EU-27, 2009-2019
(2009 = 100)
Source: Eurostat (nama_10_gdp)

Household consumption

Consumption expenditure of households accounted for at least half of GDP (at current market prices) in 2019 in 17 of the EU-27 Member States; this share was highest in Greece (65.2 %) and Cyprus (63.9 %). By contrast, it was lowest in Luxembourg (27.8 %), which had, nevertheless, by far the highest average household consumption expenditure per inhabitant (PPS 23 010) — see Table 6 — even after adjusting for price level differences between Member States.

Table 6: Consumption expenditure of households, 2009, 2014 and 2019
Source: Eurostat (nama_10_gdp) and (nama_10_pc)

Aside from Luxembourg, average household consumption expenditure per inhabitant in PPS terms was also relatively high in 2019 in Austria (PPS 19 990) and Germany (PPS 19 450). By contrast, Bulgaria was the only EU-27 Member State to report that average household consumption expenditure per inhabitant was below PPS 10 000.

An analysis of real developments in average consumption expenditure per inhabitant in euro terms (based on a chain linked volume index) over the period 2014-2019 shows that the fastest growth was recorded in Romania, Bulgaria, Hungary and Lithuania. Austria recorded the slowest increase in household consumption expenditure per inhabitant, up on average by 0.4 % each year during the period from 2014 to 2019, while increases averaging less than 1.0 % each year were also recorded in Luxembourg (0.5 %) and Greece (0.8 %).

Source data for tables and graphs

Data sources

The European system of national and regional accounts (ESA) provides the methodology for national accounts in the EU. The current version, ESA 2010, was adopted in May 2013 and has been implemented since September 2014. It is fully consistent with worldwide guidelines for national accounts, the 2008 SNA. Please note that most EU-27 Member States carried out a benchmark revision in August-October 2019. For further details, please consult the Eurostat website and in particular this document.

GDP and main components

The main aggregates of national accounts are compiled from institutional units, namely non-financial or financial corporations, general government, households, and non-profit institutions serving households (NPISH).

Data within the national accounts domain encompasses information on GDP components, employment, final consumption aggregates and savings. Many of these variables are calculated on an annual and on a quarterly basis.

GDP is the central measure of national accounts, which summarises the economic position of a country (or region). It can be calculated using different approaches: the output approach; the expenditure approach; and the income approach.

An analysis of GDP per inhabitant removes the influence of the absolute size of the population, making comparisons between different countries easier. GDP per inhabitant is a broad economic indicator of living standards. GDP data in national currencies can be converted into purchasing power standards (PPS) using purchasing power parities (PPPs) that reflect the purchasing power of each currency, rather than using market exchange rates; in this way differences in price levels between countries are eliminated. The volume index of GDP per inhabitant in PPS is expressed in relation to the EU-27 average (set to equal 100). If the index of a country is higher/lower than 100, that country’s level of GDP per head is above/below the EU-27 average; this index is intended for cross-country comparisons rather than temporal comparisons.

The calculation of the annual rate of change of GDP using chain linked volume indices (real changes) is intended to enable comparisons of the dynamics of economic development both over time and between economies of different sizes, irrespective of price levels.

Complementary data

Economic output can also be analysed by activity. At the most aggregated level of analysis used for national accounts, 10 NACE headings are identified: agriculture, forestry and fishing; industry; construction; distributive trades, transport, accommodation and food services; information and communication services; financial and insurance services; real estate activities; professional, scientific, technical, administrative and support services; public administration, defence, education, human health and social work; arts, entertainment, recreation, other services and activities of household and extra-territorial organisations and bodies.

An analysis of output by activity over time can be facilitated by using a volume measure (real changes), in other words, by deflating the value of output to remove the impact of price changes; each activity is deflated individually to reflect the changes in the prices of its associated products.

A further set of national accounts data is used within the context of competitiveness analyses, namely indicators relating to the productivity of the workforce, such as labour productivity measures. Productivity measures expressed in PPS are particularly useful for cross-country comparisons. GDP per person employed is intended to give an overall impression of the productivity of national economies. It should be kept in mind, though, that this measure depends on the structure of total employment and may, for instance, be lowered by a shift from full-time to part-time work. GDP per hour worked gives a clearer picture of productivity as the incidence of part-time employment varies greatly between countries and activities.

Annual information on household expenditure is available from national accounts compiled through a macroeconomic approach. An alternative source for analysing household expenditure is the household budget survey (HBS): information for the latter is obtained by asking households to keep a diary of their purchases and is much more detailed in its coverage of goods and services as well as the types of socioeconomic analysis that are made available. The HBS is only carried out and published every five years: the latest reference year for which data are currently available is 2015, although (at the time of writing) data are not yet available for two of the EU-27 Member States (Denmark and France).

Context

European institutions, governments, central banks as well as other economic and social bodies in the public and private sectors need a set of comparable and reliable statistics on which to base their decisions. National accounts can be used for various types of analysis and evaluation. The use of internationally accepted concepts and definitions enables an analysis of different economies, such as the interdependencies between the economies of the EU Member States, or a comparison between the EU and non-member countries.

Business cycle and macroeconomic policy analysis

One of the main uses of national accounts data relates to the need to support European economic policy decisions and the achievement of economic and monetary union (EMU) objectives with high-quality short-term statistics that allow the monitoring of macroeconomic developments and the derivation of macroeconomic policy advice. For instance, one of the most basic and long-standing uses of national accounts is to quantify the rate of growth of an economy, in simple terms the growth of GDP. Core national accounts figures are notably used to develop and monitor macroeconomic policies, while detailed national accounts data can also be used to develop sectoral or industrial policies, particularly through an analysis of input-output tables.

Since the beginning of the EMU in 1999, the European Central Bank (ECB) has been one of the main users of national accounts. The ECB’s strategy for assessing the risks to price stability is based on two analytical perspectives, referred to as the ‘two pillars’: economic analysis and monetary analysis. A large number of monetary and financial indicators are thus evaluated in relation to other relevant data that allow the combination of monetary, financial and economic analysis, for example, key national accounts aggregates. In this way monetary and financial indicators can be analysed within the context of the rest of the economy.

The Directorate-General for Economic and Financial Affairs monitors economic developments. The EU has a yearly cycle of economic policy coordination called the European Semester. Each year, the European Commission conducts a detailed analysis of EU Member States’ plans for budgetary, macroeconomic and structural reforms and provides country-specific recommendations for the following 12-18 months.

The Directorate-General for Economic and Financial Affairs also produces the European Commission’s macroeconomic forecasts four times a year (autumn, winter, spring and summer), in coordination with the annual cycle of the European Semester. These forecasts cover all EU Member States in order to derive forecasts for the euro area and the EU, and often also include outlooks for candidate countries, as well as some non-member countries.

The analysis of public finances through national accounts is another well-established use of these statistics. Within the EU a specific application was developed in relation to the convergence criteria for EMU, two of which refer directly to public finances. These criteria have been defined in terms of national accounts figures, namely, government deficit and government debt relative to GDP; see the article on government finance statistics for more information.

Regional, structural and sectoral policies

As well as business cycle and macroeconomic policy analysis, there are other policy-related uses of the EU’s national and regional accounts data, notably concerning regional, structural and sectoral issues.

The allocation of expenditure for the structural funds is partly based on regional accounts. Furthermore, regional statistics are used for ex-post assessment of the results of regional and cohesion policy.

An economy that works for people is a strategic priority for the EU and the Member States. In support of these strategic priorities, common policies are implemented across all sectors of the EU economy while the Member States implement their own national structural reforms.

The European Commission conducts economic analysis contributing to the development of the common agricultural policy (CAP) by analysing the efficiency of its various support mechanisms and developing a long-term perspective. This includes research, analysis and impact assessments on topics related to agriculture and the rural economy in the EU and non-member countries, in part using the economic accounts for agriculture.

Target setting, benchmarking and contributions

Policies within the EU are increasingly setting medium or long-term targets, whether binding or not. For some of these, the level of GDP is used as a benchmark denominator, for example, setting a target for expenditure on research and development at a level of 3.00 % of GDP (which is one of the Europe 2020 targets).

National accounts are also used to determine EU resources, with the basic rules laid down in a Council Decision. The overall amount of own resources needed to finance the EU budget is determined by total expenditure less other revenue, and the maximum size of the own resources are linked to the gross national income of the EU.

As well as being used to determine budgetary contributions within the EU, national accounts data are also used to determine contributions to other international organisations, such as the United Nations (UN). Contributions to the UN budget are based on gross national income along with a variety of adjustments and limits.

Analysts and forecasters

National accounts are also widely used by analysts and researchers to examine the economic situation and developments. Social partners, such as representatives of businesses (for example, trade associations) or representatives of workers (for example, trade unions), also have an interest in national accounts for the purpose of analysing developments that affect industrial relations. Among other uses, researchers and analysts use national accounts for business cycle analysis and analysing long-term economic cycles and relating these to economic, political or technological developments.

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Main GDP aggregates (t_nama_10_ma)
Auxiliary indicators (population, GDP per capita and productivity) (t_nama_10_aux)
Basic breakdowns of main GDP aggregates and employment (by industry and by assets) (t_nama_10_bbr)
Detailed breakdowns of main GDP aggregates (by industry and consumption purpose) (t_nama_10_dbr)
Regional economic accounts - ESA 2010 (t_nama_10reg)
Main GDP aggregates (nama_10_ma)
Auxiliary indicators (population, GDP per capita and productivity) (nama_10_aux)
Basic breakdowns of main GDP aggregates and employment (by industry and by assets) (nama_10_bbr)
Detailed breakdowns of main GDP aggregates (by industry and consumption purpose) (nama_10_dbr)
Breakdowns of non-financial assets by type, industry and sector (nama_10_nfa)
Regional economic accounts (nama_10reg)

Notes

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.