18 March 2010

Gross domestic product (GDP) is a measure for the economic activity. It is defined as the value of all goods and services produced less the value of any goods or services used in their creation. The volume index of GDP per capita in Purchasing Power Standards (PPS) is expressed in relation to the European Union (EU-27) average set to equal 100. If the index of a country is higher than 100, this country's level of GDP per head is higher than the EU average and vice versa. Basic figures are expressed in PPS, i.e. a common currency that eliminates the differences in price levels between countries allowing meaningful volume comparisons of GDP between countries. Please note that the index, calculated from PPS figures and expressed with respect to EU27 = 100, is intended for cross-country comparisons rather than for temporal comparisons.

 National accounts are a coherent and consistent set of macroeconomic indicators, which provide an overall picture of the economic situation and are widely used for economic analysis and forecasting, policy design and policy making. Eurostat publishes annual and quarterly national accounts, annual and quarterly sector accounts as well as supply, use and input-output tables, which are each presented with associated metatdata.

Annual national accounts are compiled in accordance with the European System of Accounts - ESA 1995 (Council Regulation 2223/96). Annex B of the Regulation consists of a comprehensive list of the variables to be transmitted for Community purposes within specified time limits. This transmission programme has been updated by Regulation (EC) N° 1392/2007 of the European Parliament and of the Council. The domain consists of the following collections:

Geographical entities covered are the European Union, the euro area, EU Member States, Candidate Countries, EFTA countries, US,  Japan and possibly other countries on an ad-hoc basis.

 - Data sources: National Statistical Institutes

The standard followed is the European System of Accounts (ESA 95).

The whole economy

Gross domestic product (GDP) at market prices is the final result of the production activity of resident producer units (ESA95, 8.89). It can be defined in three ways:

a.GDP Output approach

From the production point of view GDP can be measured as the sum of the following components:

GDP        = Total gross value added (B1G)

                + Taxes less subsidies on products (D.21 less D.31)

b. GDP Expenditure approach

From the expenditure side, GDP can be measured as follows:

GDP        = private final consumption expenditure (P3 in S14+S15)

                + government final consumption expenditure (P3 in S13)

                + gross fixed capital formation (P.51)

                + changes in inventories (P.52)

                + acquisition less disposal of valuables (P.53)

                + exports (P.6)

                - imports (P.7)

c. GDP Income approach

GDP income components and other income measures are only available at current prices, because purely monetary flows can not naturally be decomposed into a price and a volume component. They may, however, be converted to "real terms" by applying an appropriate deflator. The central variables given are related with each other according to the following equations:

GDP        = compensation of employees (D.1)

                + gross operating surplus and mixed income (B.2g and B.3g)

                + taxes less subsidies on production and imports (D.2 and D.3)

 Population (ESA95, 11.05) consists of all persons, nationals or foreigners, who are permanently settled in the economic territory of the country, even if they are temporarily absent from it, on a given date. A person staying or intending to stay at least one year is considered to be settled on the territory. By convention, the total population includes neither foreign students nor members of foreign armed forces stationed in a country.

 Purchasing Power Standards (PPS) are fictive 'currency' units that remove differences in purchasing power, i.e. different price levels between countries. Thus, the same nominal aggregate in two countries with different price levels may result in different amounts of purchasing power. Figures expressed in Purchasing Power Standards are derived from figures expressed in national currency by using Purchasing Power Parities (PPP) as conversion factors. These parities are obtained as a weighted average of relative price ratios in respect to a homogeneous basket of goods and services, both comparable and representative for each country. They are fixed in a way that makes the average purchasing power of one euro in the European Union equal to one PPS.

National accounts are dealing with the economy (or large sub-sectors) as a whole. They combine data from a host of base statistics, and thus they have no common sampling reference frame. The elementary building block of ESA95 statistics is the institutional unit (ESA95, 2.12.), "an elementary economic decision-making centre characterised by uniformity of behaviour and decision-making autonomy in the exercise of its principal function". This can be, amongst others, a household, a corporation or a government agency. Institutional units producing goods and services are often engaged in a combination of activities at the same time. For national accounts purposes, they are therefore split into local kind-of-activity units (ESA 1995, 2.102.), characterised by involvement in a single activity. These are then grouped into industries, so that a big industrial enterprise may contribute to activities in a number of different branches. For further detail, please refer to ESA95.

National Accounts combine data from many source statistics. The concept of statistical population is not strictly applicable in a national accounts context.

Eurostat publishes national accounts data for European Union, euro area, EU Member States, EFTA countries, Candidate Countries, the United States, Japan and possibly other countries on an ad-hoc basis.

Eurostat estimates the aggregates for the EU and the euro area; all other data are produced by the statistical offices of the respective countries. For further information on country data you may also refer to National Statistical Institutes and National Central Banks (links given on the Eurostat web site).

Member States, EFTA countries and Candidate Countries have legal obligations to submit their data to Eurostat. These data are the inputs for Eurostat's estimates of EU and euro area.

Time coverage (i.e., length of the historical series) is different for European series and for national series. Full coverage is given for EU and euro area aggregates starting from 1995, with some exceptions in the case of the New Member States. The coverage for national data varies from country to country, partly due to derogations provided for in the transmission and back-projection programme, and can, in some cases, be substantially longer than for the European aggregates. Forecasts (usually two years ahead) for national and European series are provided based on forecasted growth produced by the Commission's General Directorate Economy and Finance (DG ECFIN) twice a year (spring and autumn).

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The data are published as GDP in Purchasing Power Standards (PPS) per capita, EU27=100. Data are expressed as an index, with the EU-27 value marking 100. Figures therefore have no unit.

The PPS figures were derived from those expressed in national currency by applying purchasing power parities (PPP). See above for further information on PPP.

The accounting period is the calendar year, with temporal coverage varying across geographical units.

 Gross Domestic Product per capita in PPS, EU-27 = 100

National accounts are compiled in accordance with the European System of Accounts (ESA 1995) adopted in the form of a Council Regulation 2223/96 of dated 25 June 1996 (originally published in the Official Journal L310 of the 30/11/1996), and subsequent amendments, notably Regulation (EC) N° 1392/2007 of the European Parliament and of the Council (new ESA95 transmission programme).

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Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

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Eurostat releases of European annual accounts aggregates are not covered by a pre-announced release calendar, but annual accounts that are also covered by the quarterly accounts are usually updated on the occasion of new quarterly releases (which are released according to a pre-announced calendar that is published on Eurostat's website), and figures for a new year usually become available with the first release of quarterly accounts for the fourth quarter of the reference year.

National data are published by the National Statistical Institutes (NSI) following national dissemination calendars. Please consult NSI's websites to get national dissemination calendars (links are given on the Eurostat website). National data become visible on Eurostat's online database usually one to two days after  their reception (processing including quality monitoring).

The PPP coefficients are updated twice yearly: in June and December.

The release calendar for European quarterly national accounts is published on the website: http://ec.europa.eu/eurostat.

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see item 10 - 'Dissemination format') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

Annual

News releases on-line

Statistics in Focus (irregular); data are also used in various other publications.

Please consult free data on-line.

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Apart from the accompanying press release, there are no official comments from Eurostat at the time of the release of the European aggregates. Comments may or may not be made by the European Commission or European Union Member States.

For information on any comment possibly made by the Commission, please refer to http://europa.eu/press_room/. For further information on any comments possibly provided by National Statistical Institutes, National Central Banks or National Governments on their own data, please refer to their web sites (Links are given on the Eurostat web site http://ec.europa.eu/eurostat).

The ESA95 methodology is referred to in Council Regulation 2223/96 and found in the 'European System of Accounts' (1995). Brief descriptions of the methodology used in National Accounts may be found on the Eurostat web site and regular Eurostat publications.

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Eurostat releases the annual GDP figures after 65 days (i.e. early March of the following year) for the first time. More final estimates (including the population estimates) are released after 100 days (i.e. early April of the following year). This timeliness is subject to the availability of country data that serve as the basis to calculate the European aggregates. Member States have the legal obligation to transmit the new annual data to Eurostat. Country coverage is usually not complete within these deadlines, but increases with subsequent releases. In case of missing country data, Eurostat may use internal figures (based on unpublished estimates) to produce European aggregates. However, the preliminary PPP coefficients are not available for the previous year until June.

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Additional time series are available from the other domains on National Accounts, in particular the domain on quarterly accounts, and from Eurostat publications.

Most of the national data used in the calculation of euro area and European Union aggregates have originally been published by the National Statistical Institutes (NSI). These data may also be used for cross-checking. Most are disseminated via the NSI's websites.

In between Eurostat releases, Member States may revise their figures; Eurostat publishes the new Member States' accounts shortly after reception but does not recalculate the EU accounts until the next scheduled EU release. Geographical coherence may thus be lost for a brief period. In turn, a certain stability of annual aggregates is assured, and annual and quarterly EU aggregates will by default be coherent.

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EU annual national accounts aggregates are updated with the regular releases of quarterly national accounts. Dates for those are published in Eurostat's release calendar. Currently, there are eight regular releases each year, and hence eight updates of annual EU accounts, roughly four to six weeks apart.

However, the PPP coefficients are updated twice yearly: in June and December.

National accounts data are subject to continuous routine revisions as new input data becomes available. This will typically also entail revisions of the European aggregates, which are derived from these data, but updated estimations of the European aggregates are only released on specific dates. Annual data may be revised twice every quarter with the release of quarterly figures.

In addition, exceptional revisions will result from major changes in methodology. These major changes will be implemented with legislation, and therefore announced in the Official Journal of the European Union and other publications.

Eurostat publishes national accounts data for the European Union, euro area and country data (for EU Member States, EFTA countries, Candidate Countries, the United States and Japan). Eurostat estimates the figures for EU and euro area (see section below '20.5. Data Compilation' for details); all the other data are produced by the statistical offices of the respective countries.

Countries use many sources to compile their national accounts, among them administrative data from government, censuses, business surveys and household surveys. No single survey can hence be referred to. Sources vary from country to country and may cover a large set of economic, social, financial and environmental items, which need not always be strictly related to national accounts. In any case, there is no single survey source for national accounts.

For further information about sources and collection methods in National Statistical Institutes (NSIs), please refer to National Statistical Institutes and National Central Banks (see Eurostat's web site, and after having chosen the language to be used, select menu: All Services - Links and Contacts).

Purchasing Power Parities calculated on the basis of survey data may not be available for the latest periods covered. As long as these official PPP results are not established by Eurostat, PPP projections are applied. These projections are prepared by the Commission's Directorate General for Economy and Finance (DG ECFIN) using implicit price deflators from National Accounts. Similarly, GDP forecasts produced by DG ECFIN are used for the latest periods as long as the official results have not yet been transmitted.

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National Accounts combine data from many source statistics. Techniques of data collection vary widely, depending on the compilation approach, the source statistics available, the particular account in the system of accounts, the timeliness of data release and other factors.

Source data undergo a sequence of checks within NSIs. Eurostat checks national data mainly for completeness (coverage of reference periods and variables) and consistency (accounting consistency, time-consistency between quarterly and annual accounts and consistency over time) and follows up with NSIs on any lack of quality in this respect.

The same checks are applied to data for the European aggregates. Validation against data from other domains and validation of the statistical tools used are done on an ad-hoc basis.

Eurostat estimates the aggregates for euro area and EU using different methods for annual and for quarterly accounts. The annual data for the euro area and the EU are derived using Member States' data as input, usually by adding up the aggregates for all Member States after expressing them in a common currency (euro/ECU). Where single Member States' figures are lacking, Eurostat may use unpublished estimates to impute country data and hence calculate the European aggregates.

The summation is done on figures expressed in euro/ECU, not on figures expressed in national currencies. The reason is that for periods before 1999, national currency series have been constructed by applying the irrevocably fixed euro exchange rate, even if the historical ECU exchange rates have been different.

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Due to different revision policy for the European aggregates and the Member States' data, there may be a difference between the European aggregate and the appropriate sum of national data between updates. Moreover, the European aggregates are not suitable for implicit derivation of values for missing national series.