4.2 Consumption expenditure

Consumption expenditure represents final consumption, i.e. the goods and services acquired are consumed rather than used for the production of new goods or services. According to ESA95 (3.75), "Final consumption expenditure consists of expenditure incurred by resident institutional units on goods or services that are used for the direct satisfaction of individual needs or wants or the collective needs of members of the community. Final consumption expenditure may take place on the domestic territory or abroad." This definition is followed by a whole string of exceptions and borderline cases (3.76...3.79). For example, it is pointed out that services of owner-occupied dwellings and income in kind are included in household final consumption expenditure, whereas social transfers in kind and payments made by households that may be regarded as taxes are excluded from final consumption expenditure.

Consumption expenditure can be divided between private and public consumption expenditure, or between individual and collective consumption expenditure. There is an equation between these two concepts which says that private consumption expenditure + public consumption expenditure = total consumption expenditure = individual consumption expenditure + collective consumption expenditure. In 2001 consumption expenditure accounted for 70.0% of total demand, private consumption expenditure for 50.5% and public consumption expenditure for 21.0%. Viewed from a different angle, the breakdown of final consumption expenditure (70.0% of total demand) was such that individual consumption expenditure accounted for 63.6% of demand and collective consumption expenditure for 7.4% of demand.