Statistics Explained

National accounts and GDP


Data extracted in June 2022.

Planned article update: June 2023.

Highlights

EU GDP up by 5.4 % in 2021 but still 0.8 % below 2019 level.

Exports and imports recover in 2021, while final consumption expenditure and gross capital formation are still lower than 2019 levels.

[[File:National accounts and GDP-interactive_NA2022.xlsx]]

Real GDP rate of change, 2005–2021

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. 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; they are also used 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. These can serve as the basis for the design, monitoring and evaluation of specific EU policies.

This article is published every year with annual data. This 2022 issue describes the situation up to the year 2021. As a consequence, the time series covers the first two years of the COVID-19 crisis. While the COVID-19 crisis has had an impact on the economy as a whole, the impact has differed from one sector to another and has had a varied impact on different types of expenditure (such as consumption and investment). As such, comparisons of data for 2021 with much earlier years (such as 2005, as presented in this article) combine at least two influences: structural change over several years up to 2020 as well as the specific impact of COVID-19 between 2019, 2020 and 2021. This should be borne in mind when analysing time series.

Full article

Developments for GDP in the EU: a rebound in 2021 after a decline in 2020

The global financial and economic crisis resulted in a severe recession in the EU in 2009 (see Figure 1), followed by a recovery in 2010. The crisis started earlier in Japan, 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 global financial and economic crisis was already apparent in the EU in 2008 when there had been a considerably lower rate of increase for GDP than in 2007 (down from 3.1 % in 2007 to 0.6 % in 2008) and this was followed by a 4.3 % decrease in GDP in 2009. The recovery in the EU 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. The recovery was not sustained, and subsequently GDP contracted 0.7 % in 2012 and the change in 2013 was negligible. A series of positive rates of change was recorded thereafter, with growth relatively stable between 1.6 % and 2.8 % each year from 2014 to 2019. In 2020, the EU recorded a real decrease in GDP of 5.9 % as the initial impact of the COVID-19 crisis was felt; this was considerably larger than the decrease in activity in 2009 during the global financial and economic crisis. Equally, the rebound in activity in 2021, up 5.4 %, was stronger than that observed in 2010.

In the euro area, the corresponding rates of change were similar to those recorded in the EU: the contractions recorded in 2009, 2012 and 2020 were stronger (down by 4.5 %, 0.9 % and 6.3 %) than in the EU and the 2012 contraction was sustained into 2013 (down 0.2 %) whereas there was no change in the level of GDP across the EU in 2013. While there was growth in the euro area each year that there was growth in the EU, the rate of growth in the euro area was consistently 0.1 to 0.3 percentage points lower, with one exception: the rebound in 2021 was equally as strong in the euro area (up 5.4 %) as in the EU. As such, during the period 2005–2021, real GDP growth in the euro area (up 15.6 % overall) was somewhat weaker than that in the EU as a whole (up 19.2 %).

Figure 1: Real GDP rate of change, 2005–2021
(% change compared with the previous year)
Source: Eurostat (naida_10_gdp) and (nama_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 2009 in all of the EU Member States except for Poland, economic growth returned thereafter in most of the Member States: 23 recorded growth in 2010 and (a different) 23 recorded growth 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 (13) 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 15 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.

Table 1: Real GDP rate of change, 2005–2021
Source: Eurostat (naida_10_gdp) and (nama_10_gdp)

The situation reversed notably in 2020, as Ireland was the only EU Member State to record GDP growth. The negative rates of change elsewhere ranged down to -7.8 % in France, -8.1 % in Croatia, -8.3 % in Malta, -8.4 % in Portugal, -9.0 % in Greece and Italy, and -10.8 % in Spain. The rebound in 2021 was experienced in all of the Member States, with rates of growth ranging from 2.9 % in Germany to 8.3 % in Estonia and Greece, 10.2 % in Croatia, 10.4 % in Malta and 13.5 % in Ireland.

Average annual GDP growth of 1.1 % over the last 16 years in the EU and 0.9 % in the euro area

The positive rate of change in 2021 in Ireland was the ninth consecutive year that it had posted an increase in GDP; Turkey’s growth in 2021 was its 12th consecutive annual increase. Until 2020, Poland had consistently recorded positive rates of change for GDP growth throughout the period shown in Table 1, as had Kosovo* (data start in 2010) among the non-member countries shown. The negative rate of change in 2020 was the first since 2009 in Belgium, Bulgaria, Denmark, Germany, Estonia, France, Lithuania, Luxembourg, Malta, Austria and Slovakia; this was also the case in Norway, Switzerland and the United States. Note that data for 2020 are not available for some non-member countries.

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 16 years, and the COVID-19 crisis lowered it further still. The annual average growth rates of GDP in the EU and the euro area between 2005 and 2021 were 1.1 % and 0.9 %, respectively (see Table 1). By comparison, between 2010 (the first year after the low point of the global and financial crisis) and 2019 (the last full year before the COVID-19 crisis) the average for the EU was 1.5 % and for the euro area it was 1.3 %.

The highest growth among the EU Member States, by this measure, was recorded for Ireland (average annual growth for GDP of 5.0 % between 2005 and 2021; this includes an exceptional increase in 2015 reflecting the activities of multinational enterprises). Malta (4.4 %) and Poland (3.8 %) had the next highest average growth rates. By contrast, the real development of GDP between 2005 and 2021 was negative overall in Italy and Greece, down on average by 0.2 % and 1.2 % per year, respectively.

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 2021, GDP in the EU was 14.5 trillion PPS (14 500 billion PPS) – note that for the EU one PPS equals one euro. PPS figures are intended for cross-country comparisons rather than for temporal comparisons since they cannot be considered as time series for methodological reasons. Nevertheless, it is interesting to note that China historically had a lower level of economic output than either the EU or the United States, but that this situation 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. In 2017, China’s GDP in PPS drew almost level with that recorded in the United States and in 2018 it surpassed the United States’ level; in 2019 and 2020 it moved further ahead.

Figure 2: GDP at current market prices, 2005–2021
(billion PPS)
Source: Eurostat (prc_ppp_ind)

In 2021, Germany accounted for more than one fifth of the EU’s GDP in PPS terms

The euro area accounted for 80.4 % of the EU’s GDP in 2021 (when measured in PPS terms), down from 84.8 % in 2005. In 2021, the sum of the four largest EU Member State economies (Germany, France, Italy and Spain) accounted for just under three fifths (59.5 %) of the EU’s GDP (in PPS terms), which was 4.7 percentage points lower than their combined share 16 years earlier (in 2005). Germany alone accounted for 22.2 % of the EU’s GDP in 2021, down marginally from 22.4 % in 2005. The shares of the other three largest Member States fell more strongly between 2005 and 2021, down 2.4 percentage points in Italy, 1.4 percentage points in Spain and 0.6 percentage points in France.

In 2021, GDP per inhabitant averaged €32 330 across the EU

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 in 2021 was 448 million. In 2021, average GDP per inhabitant for the EU (in current prices) was €32 330. 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 average, with this set to equal 100 (see the right-hand side of Table 2). Based on this measure, the highest value among the EU Member States was recorded for Luxembourg, where GDP per inhabitant in PPS was 2.77 times as high as the EU average in 2021 (which is partly explained by the importance of cross-border workers from Belgium, France and Germany). By contrast, GDP per inhabitant in PPS in Bulgaria was just over half (55 %) the EU average.

Table 2: GDP at current market prices, 2005–2021
Source: Eurostat (prc_ppp_ind)

A comparison of the PPS figures relative to the EU for 2005 and 2021 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 average in 2005 to one closer to the EU average in 2021, despite some setbacks during the global financial and economic crisis – see Figure 3. Cyprus was the only exception, as it moved from above the EU average (103 % of the EU average in 2005) to a position below it (88 % in 2021). Among the other Member States, Italy and Spain also moved from a position above the EU average to one below it. Greece and Portugal moved further below the EU average. Denmark and Luxembourg moved further ahead of the EU average, as most notably did Ireland. The remaining Nordic and western Member States – Germany, Belgium, Sweden, Finland, the Netherlands, France and Austria – moved downwards from a position above the EU average in 2005 to one closer to (but still above) the EU average in 2021.

Figure 3: GDP per capita at current market prices, 2005 and 2021
(EU = 100; based on PPS per inhabitant)
Source: Eurostat (prc_ppp_ind)

Gross value added in the EU by economic activity

Close to three quarters of the EU’s total value added in 2021 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.

Industry’s share of EU value added was 0.9 percentage points lower in 2021 (20.1 %) than it had been in 2005 (21.0 %), while the contribution of distributive trades, transport, accommodation and food services fell from 19.4 % to 18.6 %. Distributive trades, transport, accommodation and food services moved from second largest among the 10 activities shown to third largest, as the share of public administration, defence, education, human health and social work activities increased from 18.3 % to 19.3 %; this increase of 1.0 percentage points was the second largest percentage point increase recorded among the 10 activities shown. Professional, scientific, technical, administrative and support services increased its share of value added by 1.2 percentage points and moved to become the fourth largest activity with an 11.1 % share. Real estate activities dropped from fourth to fifth largest despite a 0.6 percentage points increase in its share to 10.9 %. The only other activity to record an increased share was information and communication activities, up to 5.4 %, moving ahead of financial and insurance activities and approaching the share of construction.

The other activities that recorded falls in their share of output in the EU were agriculture, forestry and fishing (down 0.2 percentage points to 1.8 %), construction (down 0.4 percentage points to 5.6 %), arts, entertainment and recreation, other services and activities of household and extra-territorial organisations and bodies (down 0.5 percentage points to 2.9 %) and financial and insurance activities (down to 4.3 %).

Table 3: Gross value added at current basic prices, 2005 and 2021
(% share of total gross value added)
Source: Eurostat (nama_10_a10)

Services contributed 72.5 % of the EU’s total gross value added in 2021 compared with 71.0 % in 2005. The relative importance of services was particularly high in Luxembourg, Malta, Cyprus, France, the Netherlands, Greece, Belgium, Denmark and Portugal, where they accounted for at least three quarters of total value added. By contrast, the share of services was below two thirds in Hungary, Romania, Slovenia, Poland and Czechia, and was as low as 55.9 % in Ireland; all of these EU Member States recorded relatively high shares for industry, particularly Ireland.

Diverging developments of economic activities interrupted by the global financial and economic crisis and the COVID-19 crisis

Structural change in the EU 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. Furthermore, several activities were particularly affected by the global financial and economic crisis and its aftermath and/or by the COVID-19 crisis; recovery from the latest crisis has been uneven when analysed by activity.

  • Information and communication activities recorded growth nearly every year between 2005 and 2021, the only exception was a fall of 0.5 % in 2009. However, this activity was unique, in that it was the only one of the 10 activities shown in Figures 4 and 5 that recorded growth in 2020, expanding by 1.5 %. Output from information and communication activities doubled (up 101.9 %) between 2005 and 2021, by far the largest growth among all 10 activities.
  • Industrial output increased prior to the global financial and economic crisis but fell 1.4 % in 2008 and 11.8 % in 2009. After a strong rebound in 2010 and 2011 (up 11.8 % overall), industrial output fell by 2.3 % between 2011 and 2013. Thereafter, industrial output increased consistently, with growth recorded for six consecutive years. This period of growth was followed by a decline of 6.6 % in 2020, as the COVID-19 pandemic and its related restrictions had an impact and then by a rebound of 7.6 % in 2021. Overall, industrial output was 19.4 % higher in 2021 than in 2005.
  • Slightly more interrupted growth was observed for distributive trades, transport, accommodation and food services: a relatively strong fall in 2009 (down 5.3 %) and a much weaker one in 2013 (down 0.4 %) were the only negative rates of change before 2020. The 12.4 % fall in 2020, largely reflecting the COVID-19 containment measures, was the second largest fall in 2020 among the 10 activities. While the rebound in 2021 (up 7.7 %) was the largest among the 10 activities, it was only a partial recovery: output in 2021 remained 5.6 % below its 2019 level. Looking at the whole period from 2005 to 2021, overall growth was 15.6 %.
  • Between 2005 and 2009, output from agriculture, forestry and fishing increased by 7.6 %. Thereafter its development fluctuated for three years before increasing in 2013 and 2014. More recent years have again shown fluctuating developments, but with little volatility, with rates of change between -1.2 % and 2.3 %. Overall, output was 11.9 % higher in 2021 than it had been in 2005.
  • Construction recorded the deepest and longest contraction following the global financial and economic crisis: its output fell 20.9 % between 2007 and 2014, with output falling every year during this period. As such, the 1.7 % increase recorded for construction in 2015 was the first annual growth rate in eight years and was followed by growth between 1.1 % and 2.5 % through to 2019. In 2020, construction output fell for the first time since 2014, down 4.3 %. This was followed in 2021 by a 4.5 % rebound. Despite the period of sustained growth between 2015 and 2019, construction output in 2021 was 7.6 % lower than it had been in 2005. This was the largest overall fall among the 10 activities.
Figure 4: Developments for real gross value added, EU, 2005–2021
(2005 = 100)
Source: Eurostat (nama_10_a10)
  • Professional, scientific, technical, administrative and support services also reported only slightly interrupted growth between 2005 and 2019, with a fall of 6.3 % in 2009 and almost no change (down 0.1 %) in 2012. The fall in 2020 was somewhat larger than in 2009, down 7.2 %. The partial recovery (up 6.1 %) in 2021 left output in 2021 1.5 % below its 2019 level. Looking over the whole period from 2005 to 2021, professional, scientific, technical, administrative and support services recorded an overall increase of 33.9 %, the second highest growth (after information and communication activities).
  • Real estate activities did not post any negative rates of change between 2005 and 2019 but did record a fall in output (down 0.7 %) in 2020 followed by a full recovery in 2021. Overall, real estate output was 23.9 % higher in 2021 than in 2005, the third highest increase among these activities.
  • Public administration, defence, education, human health and social work activities reported almost uninterrupted growth between 2005 and 2019: in 2013, the level of value added was almost the same as in 2012. As such, the fall of 2.9 % in 2020 was the only clear downward movement observed for these activities during the period studied. The 2020 contraction was followed by a more than full recovery as growth of 3.7 % was recorded in 2021. An overall increase of 14.8 % was recorded between 2005 and 2021.
  • Financial and insurance activities recorded four years of falling output between 2005 and 2019, as well as a relatively modest fall in 2020 (down 0.8 %); a full recovery from the impact of the COVID-19 crisis was recorded in 2021. Overall growth between 2005 and 2021 was 14.0 %.
  • Arts, entertainment and other services recorded three years of falling output between 2005 and 2019. In addition, in 2020 it recorded the largest fall among the 10 activities, down 16.9 %. This fall reflects the major impact of the COVID-19 crisis on arts, entertainment and other services. While there was growth in 2021, at 2.7 % this left the level of output in 2021 well below that of 2019. Value added for these activities in 2021 was 3.7 % below its 2005 level. As such, this activity was one of only two – the other being construction – with a lower level of value added in 2021 than in 2005. Whereas for construction this overall negative development was mainly due to the global financial and economic crisis, for arts, entertainment and other services it was due to the COVID-19 crisis.
Figure 5: Developments for real gross value added, EU, 2005–2021
(2005 = 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 16-year period from 2005 to 2021 shows increases in the EU for 6 of the 10 economic activities covered. In relative terms, the largest productivity gains were recorded for agriculture, forestry and fishing (up 59.4 %) and for information and communication activities (up 42.2 %). Smaller increases were observed for industry, for financial and insurance activities, for real estate activities and for distributive trades, transport, accommodation and food services – see Figure 6. Note that a precise comparison of labour productivity levels in real terms between activities can only be analysed for reference year 2005 due to the non-additivity of chain linked volumes.

Figure 6: Real labour productivity, EU, 2005, 2013 and 2021
(€1 000 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 2005 and 2021 in most EU Member States, with Luxembourg, Italy and Greece recording falls. In a similar manner, over the same period labour productivity per hour worked also increased in nearly all EU Member States, Greece again being an exception. Note that there is a break in series for Greece for both indicators. Leaving aside the Member States with a break in series (Ireland, Greece, Poland and Romania), the largest percentage increases for both of these real labour productivity measures were recorded in Latvia and Lithuania, while the next highest rates were recorded in Bulgaria, Estonia and Slovakia.

Table 4: Real labour productivity, 2005, 2013 and 2021
Source: Eurostat (nama_10_gdp) and (nama_10_a10_e)

Consumption and investment

In 2021, real GDP showed strong economic rebound and increased by 5.4 %, even if economic activities were still affected by containment measures. Nevertheless, GDP remains 0.8% below the 2019 pre-COVID level, as the economic fallout due to COVID-19 resulted in a 5.9% decrease of GDP in 2020. Figure 7 turns the analysis to the development of the EU’s GDP components from the expenditure side.

  • Final consumption expenditure rose overall by 15.6 % in volume terms between 2005 and 2021 (see Figure 7), despite slight falls in 2009, 2012 and 2013, and a larger fall in 2020 (down 4.9 %).
  • Final consumption expenditure of general government rose notably faster than final consumption expenditure as a whole, up 26.1 % between 2005 and 2021, despite slight falls in 2011 and 2012. Final consumption expenditure of general government increased 0.9 % in 2020, the only expenditure item shown in Figure 7 to record an increase during the year that the COVID-19 crisis started.
  • During the same period (2005–2021), gross capital formation was relatively volatile: it increased between 2005 and 2007 by 14.9 % and fell by a greater amount (17.7 %) between 2007 and 2009 (during the global financial and economic crisis). It then increased by 8.3 % between 2009 and 2011 and fell by 8.0 % between 2011 and 2013. A subsequent period of regular growth resulted in an overall increase of 29.5 % between 2013 and 2019. A fall of 8.1 % was observed in 2020, larger than for the final consumption expenditure items shown in Figure 7. Equally, the rebound in gross capital formation in 2021, up 6.7 % was larger than for final consumption expenditure.
  • The growth in exports of goods and services exceeded the growth in imports in 2008, between 2010 and 2013, and again in 2017, whereas imports grew faster in the other years from 2005–2021. In 2020, the value of exports fell 8.6 % compared with 2019, while imports fell 8.3 %; in 2021, the value of exports rebounded 10.7 % while imports grew 9.3 %. Exports were 70.7 % higher in 2021 than in 2005, whereas the equivalent increase for imports was 65.4 %.
Figure 7: Developments for real GDP, consumption expenditure, gross capital formation, exports and imports, EU, 2005–2021
(2005 = 100)
Source: Eurostat (nama_10_gdp)

Having grown each year from 2005 to 2008, consumption expenditure by households and non-profit institutions serving households (NPISH) in the EU fell 1.1 % in 2009. Growth in 2010 (0.9 %) and 2011 (0.3 %) returned this expenditure to its 2008 level, before it fell again in 2012 (down 0.8 %) and 2013 (down 0.5 %). Thereafter, consumption expenditure by households and NPISHs increased during six consecutive years, accelerating from 1.1 % growth in 2014 to 2.2 % in 2016, before slowing to 1.6 % in 2019. In 2020, this sustained period of growth was reversed, as consumption expenditure by households and NPISHs fell 7.2 %, with only part of this being recovered in 2021 as growth of 4.0 % was recorded.

In 2010, the pace of growth for EU 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 0.9 % and 2.0 %) from 2014 to 2020. By contrast, the increase in 2021 was above this range, at 3.8 %.

Gross fixed capital formation (investment) in the EU experienced a sharp fall in 2009 (-11.3 %) and smaller falls in 2008 (-0.3 %) and 2010 (-0.4 %). An increase of 2.0 % in 2011 was followed by further falls in 2012 (-2.8 %) and 2013 (-2.0 %). However, increases in investment were observed in each of the next six years, rising in the range of 2.1–6.5 % each year. As for most other expenditure indicators, this period of growth ended abruptly in 2020 when investment fell by 6.1 %. Growth of 4.1 % in 2021 represented only a partial recovery of what had been lost the previous year.

Figure 8: Real annual rate of change in expenditure components of GDP, EU, 2005–2021
(%)
Source: Eurostat (nama_10_gdp)

In current price terms, consumption expenditure by households and non-profit institutions serving households contributed 51.0 % of the EU’s GDP in 2021. The share of gross capital formation was 23.0 % and that of general government expenditure was 22.1 %. The external balance of goods and services had a share of 3.9 % (see Figure 9).

Figure 9: Expenditure components of GDP at current market prices, EU, 2021
(% share of GDP)
Source: Eurostat (nama_10_gdp)

Among the EU Member States, there was a wide variation in investment intensity (see Figure 10). This may, in part, reflect different stages of economic development as well as growth dynamics over recent years, in particular the impact of the COVID-19 crisis. In 2021, gross fixed capital formation (in current prices) as a share of GDP was 22.0 % in the EU and almost the same (21.9 %) in the euro area. It was highest in Estonia (28.6 %), Hungary (27.1 %), Austria (25.7 %), Sweden (25.6 %) and Czechia (25.5 %). The lowest share by far was in Greece (12.9 %).

Figure 10: Gross fixed capital formation at current market prices, 2021
(% share of GDP)
Source: Eurostat (nama_10_gdp)

The vast majority of investment in the EU was made by the private sector, as can be seen from Table 5; note that the latest data are for 2020 and therefore these data do not reflect the rebound in investment experienced in 2021.

In 2020, investment by businesses accounted for 13.7 % of the EU’s GDP, whereas the equivalent figures for household and public sector investment were 5.4 % and 3.3 % respectively.

Relative to GDP, Hungary (6.4 %) had the highest ratio of public investment to GDP, while investment by the business sector was highest in Ireland (35.7 %) and Estonia (19.0 %), and by households it was highest in Cyprus (8.7 %), Romania (8.6 %) and Finland (7.0 %). Investment by households (as a share of GDP) in 2020 was notably lower than in 2005 in Ireland, Greece and Spain, while it was notably higher in Romania; note that there is a break in series for Greece.

Table 5: Investment at current market prices, 2005, 2010, 2015 and 2020
(% share of GDP)
Source: Eurostat (nasa_10_ki)

Income

An analysis of GDP within the EU from the income side shows that the distribution between the production factors of income resulting from the production process was led by the compensation of employees (see Figure 11). This form of income accounted for 47.7 % of GDP at current market prices in 2021 in the EU and 48.4 % in the euro area. The shares for gross operating surplus and mixed income were 41.4 % of GDP in the EU and 41.3 % in the euro area. For taxes on production and imports less subsidies the shares were 10.8 % in the EU and 10.3 % in the euro area.

Ireland had by far the lowest share of the compensation of employees in GDP (26.0 %), followed by Greece (36.6 %), while a peak share of 53.7 % was recorded in Germany. The particularly low share in Ireland is a consequence of globalisation related effects.

Figure 11: Distribution of income at current market prices, 2021
(% share of GDP)
Source: Eurostat (nama_10_gdp)

By 2011, the income aggregates in the EU had recovered from the losses experienced during the global financial and economic crisis. Income from the compensation of employees increased every year from 2010 to 2019, gaining 31.0 % overall (in current price terms) between 2009 and 2019. For gross operating surplus and mixed income, overall growth was almost the same (up 31.1 % during the same nine-year period); this increase was composed of annual increases every year except for 2012. Income from taxes on production and imports increased each and every year from 2010 to 2019, resulting in overall growth of 43.5 %.

The developments in 2020 (compared with 2019) were in stark contrast to the established series of increases: the compensation of employees decreased 1.7 %, gross operating surplus and mixed income decreased 3.7 %, and income from taxes on production and imports decreased by as much as 16.5 %. For the first two of these, the subsequent rebound and increase recorded in 2021 more than outweighed the previous year’s decrease: the compensation of employees was up 5.8 % and gross operating surplus and mixed income increased 9.0 %. Income from taxes on production and imports increased 13.3 % in 2021, and thereby remained 5.4 % below the 2019 level.

Figure 12: Development of income at current market prices, EU, 2005–2021
(2005 = 100)
Source: Eurostat (nama_10_gdp)

Household consumption

Consumption expenditure of households accounted for at least half of GDP (at current market prices) in 2021 in 14 of the EU Member States; this share was highest in Greece (67.1 %), Portugal (62.2 %), Romania (61.4 %) and Cyprus (61.1 %). By contrast, it was lowest in Luxembourg (27.4 %) and Ireland (23.9 %). Despite the low share of consumption expenditure of households in GDP observed in Luxembourg, this was where the highest per inhabitant expenditure level was observed, even after adjusting for price level differences between Member States (24 602 PPS per inhabitant) – see Table 6.

Table 6: Consumption expenditure of households, 2005, 2013 and 2021
Source: Eurostat (nama_10_gdp) and (nama_10_pc)

Aside from Luxembourg, average household consumption expenditure per inhabitant in PPS terms in 2021 was also relatively high in Denmark (19 112 PPS), Belgium (18 714 PPS), Austria (18 577 PPS) and Germany (18 538 PPS). By contrast, average household consumption expenditure per inhabitant was 10 514 PPS in Bulgaria.

An analysis of real developments in average consumption expenditure per inhabitant in euro terms (based on a chain linked volume index) over the period 2013–2021 shows that the fastest growth was recorded in Romania, Lithuania, Bulgaria, Hungary, Poland, Estonia and Croatia, where annual average increases were at least 3.0 %. Austria recorded the only decrease in household consumption expenditure per inhabitant, down on average by 0.7 % each year during the period from 2013 to 2021.

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 Member States carried out a benchmark revision in August–October 2019, while others completed their benchmark revision in 2020. For further details, please consult the Eurostat website and in particular this document and this article.

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 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 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;
  • financial and insurance activities;
  • 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 (reflecting 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, 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 compiled and published. The HBS is only carried out every five years: data for the 2020 reference year are starting to become available at the time of writing (June 2022).

Symbols

Note on tables:

  • italics are used to show where data are estimates or provisional;
  • a colon ‘:’ is used to show where data are not available.

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 change of an economy, in simple terms the change in 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 other non-member countries.

The analysis of public finances through national accounts is another well-established use of national accounts 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 surplus/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 one of six strategic priorities for the EU and the Member States during the period 2019–2024. 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.

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.

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.

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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)