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Methodological and time series reform of national accounts 1975-2004

Introduction

The revision is the last stage of the reform process that started in the mid-1990s, from which the first results were published in 1999. The second stage, the supply and use tables at current prices as the basis for national accounts, was introduced at the beginning of 2003. The major change of the third reform stage published now is the revision of volume methods. The revision is part of a review process of the European System of Accounts, which concerns all Member States of the European Union. The review was based on the recommendation of the global System of National Accounts SNA93.

In addition to economic monitoring and structural analyses, the EU uses national accounts data widely for the needs of Community administration. A regulation relating to national accounts was passed in 1996.

Contents of the published data

The data published now comprise time series from 1975 to 2004 in accordance with the ESA95 on the main national accounts aggregates, data by industry and sector, and on final consumption and taxes and on general government by function. The data concerning 2004 are preliminary.

The time series data have changed from those published previously. The changes will be explained in detail below. The time series were re-calculated from 1975 onwards. The data concerning the years 1975 to 2004 are available from Statistics Finland's ASTIKA databases and as an electronic Excel version from Statistics Finland.

Supply and use tables were calculated for the years 1995-2003 at current prices and for the years 2001 to 2003 at fixed prices. Tables are accessible free of charge on Statistics Finland's website at:

Annual National accounts, tables in databases.

Productivity data are published in Statistics Finland's Productivity Review. Industry-specific productivity data can also be requested separately from the information service of national accounts, calculated according to both output and value added.

The description of the statistics can be found at:

http://tilastokeskus.fi/meta/til/vtp_en.html

Methodological changes

Review of volume methodology

The calculation method of national accounts data at constant prices has been changed. In place of the previous fixed base year, the so-called changing base year was taken into use. In the new method the base year changes continuously so that constant price figures are calculated using prices for the preceding year, for example, the now published data for 2004 at 2003 prices. A method conforming to the same principle will also be used for quarterly national accounts. With this method structural changes in the economy are taken into account better than with the previous, fixed base year method.

The time series according to the changing base year are obtained by chaining annual changes into prices of the selected reference year. In the series published now the reference year is 2000. When interpreting constant-price information it should be noted that the absolute figures of the chained series cannot be added together. For example, industry-specific value added at current prices is not added up as value added for the whole economy or the sub-components of gross domestic product are not added as gross domestic product. This non-additivity is a mathematical characteristic, not an error in calculations.

Another change is the introduction of the so-called double deflation method to the calculation of supply and demand data at constant prices, where constant-price output and intermediate consumption are calculated by product with the accuracy of around 950 product groups and value added at constant prices is obtained as a residual. Price indices or volume indicators suitable for each group have been applied to the product groups. Constant-price supply data are also the basis for calculating demand components at constant prices.

So far constant-price calculations have been made on a considerably rougher level and in respect of many industries, e.g. in manufacturing by using a single deflation method, in which development in the volume of value added follows the volume of output. Demand components have been calculated totally independently, and statistical discrepancy is presented between constant-price supply and demand.

The methodological change has caused differences between the data calculated with the previous and new methods. The changes caused by the new method are not major on the level of total gross domestic product, but on the industry level there are substantial differences in the demand components of gross domestic product.

It should be noted that current-price figures were reviewed in this revision and changes in current-price values are also reflected in volume changes compared with the previous calculations.

The double deflation method has been applied starting from the year 2001. Time series prior to that are based on the calculation method of the old volume.

The changes concerning constant-price calculations are based on the European Commission decision concerning harmonisation of price and volume methods and Eurostat's Handbook on Price and Volume Measures in National Accounts.

The volume of non-market individual services is calculated on the basis of indicators.
In accordance with the Commission Decision on the principles for measuring prices and volumes in national accounts, the volume development of non-market individual services is calculated on the basis of volume indicators. In Finland indicators have been calculated for general government health, education and social services and for compulsory social insurance. Volume indicators include care episodes, care days, visits, student numbers, study weeks and made benefit decisions. The new method is applied from 2001 onwards. The new method makes it possible to measure the development of productivity in these public service industries. The previous method was based on deflation of costs and zero productivity assumption.

Revision of exports of services

A level revision was made to exports of services from 1999 onwards, which raises the level of final consumption and at the same time, that of GDP and adds the income from current external balance. The level revision was based on Statistics Finland's extended data collection authority, which improved the possibility to compare the source data of different statistics. As a result of the comparison, the interpretation of the exports of services concept could be specified: items have been added to exports of business services that previously had to be assigned to enterprises' intermediate consumption when balancing the national supply and demand of national accounts.

The change in GDP level also has an effect on the development of GDP volume in different years.

Other revisions of the calculations

In the Agriculture industry the output of fodder plants and the output of vegetables and fruit for own final use were reviewed. The auxiliary production included in other industries, such as advisor organisations, was deducted from activities serving agriculture.

In pricing of changes in cereal inventories, the average price of the calendar year was replaced by the crop of market year. The change in inventories component of output was extended to vegetables and beet root.

Intermediate consumption was revised with respect to use of self-produced fodder plants and other goods and services.

Foreign seasonal workers were added to employees and hours worked by them and compensation of employees and the auxiliary production included in other industries were deducted from it.

The value of own work for investments in agricultural building construction was raised.

The levels of trade, restaurants and hotels were adjusted in the whole times series due to the re-evaluation of business structures statistics.

Output in forestry
According to ESA95, output in forestry has to be calculated so that the net growth of cultivated forests is included in output and recorded under inventory demand either as increase or decrease in inventories. Finland's forests are mainly interpreted as cultivated. Calculations were made together with the Finnish Forest Research Institute. The effect of change in inventories on the industry's output has not been that significant in recent years.

The content of the sub-industries of forestry has been changed. In addition to changes in tree inventories, the sub-industry growing of forests includes all activities related to growing and use of trees and the sub-industry timber harvesting contains only logging work.

Calculation of household service activity
The level of output of the labour force employed by households was adjusted downwards on the basis of Statistics Finland's Labour Force Survey, accident insurance data and the survey by Niilola, Valtakari and Kousa concerning the household employee deduction.

Software investments
The calculation methods of software produced for own use were revised in accordance with Eurostat's software workgroup. The revision lowered the level of software produced for own use.

Original works
The calculation methods for originals of art and entertainment were revised in line with Eurostat's recommendation.

Valuables
Net acquisitions of valuables by sector were established as far as it was possible on the basis of the data. In accordance with the ESA95, they were separated into a specific gross capital formation transaction (P53).

Replacement of the time series of insurance holding gains
The calculation of output in insurance was revised according to Eurostat's recommendation. The revision concerns treatment of holding gains.

Addition of social contributions related to wages and salaries from the rest of world
According to Eurostat's decision, social contributions related to wages and salaries paid to and received from the rest of the world must be recorded. These payments have now been added.

Further specifications

Non-financial corporations and householdshave been separated from one another in all the accounts of the system of accounts and in the capital stock.

Investments in transport equipment are now calculated for all industries, including manufacturing.

Other content revisions

Investment grants (D92) were separated from other capital transfers into a specific transaction according to the ESA95, including investment grants paid by central government, local government and the EU to domestic sectors.

Treatment of transfer items paid from the EU's structural funds mediated through the State budget was changed according to Eurostat's new decision. These items are now shown as the EU's transfers to central government and from central government further to domestic end receivers. Previously they were regarded as transfers from the EU direct to end receivers.

Part of the items connected to bank support in the 1990sare now recorded as capital transfers from central government to financial corporations as instructed in Eurostat's Manual on Government Debt and Deficit. Previously these items were treated as financial transactions in national accounts.

Capital stock revision

In the capital stock model the geometric consumption model was partly adopted in place of the present linear one. The geometric model is used for machinery, equipment and transport equipment and for intangible investments, the linear model is still applied to all construction investments.

Change in the method for calculating financial intermediation services indirectly measured (FISIM) in July 2005

A new calculation method for the years 1995 to 2004 based on the EU Regulation on financial intermediation services indirectly measured was introduced in the national accounts data published in July 2005. The times series until 1975 was calculated in connection with this revision.

FISIM, or Financial Intermediation Services Indirectly Measured, refer to the services of financial corporations for which they make no direct charge. The Regulation of the EU concerning the allocation of FISIM in national accounts defines financial intermediation services indirectly measured as interest margins on loans and deposits.

In the past, financial intermediation services indirectly measured have not influenced GDP in national accounts, because they have been entered as intermediate consumption of the sector undivided. Now, financial intermediation services indirectly measured will be divided between the user sectors, whereby the intermediate consumption of each sector/activity will go up by the amount of these services it uses. The FISIM included in the interests of households' consumer credits and consumer bank deposits will be allocated to households' consumption expenditure, i.e. final consumption. Because a portion of the financial intermediation services indirectly measured is now recorded under final consumption instead of intermediate consumption, GDP will grow.

Exports and imports are also recorded under FISIM, which means that imports for intermediate consumption lower GDP while exports raise it. All in all, gross domestic product will grow by the difference between increase in final consumption (consumption expenditure + exports) and increase in imports for intermediate consumption. Gross national income will only go up by the amount of domestic final consumption (consumption expenditure), because interests paid to and received from the rest of the world are adjusted in FISIM by the amounts of imports and exports.

Example 1: Supply and use of FISIM in 2004 at current prices, EUR million

SUPPLY OF FISIM:

Domestic output

S12 Financial corporations 2,218

Imports

S2 Rest of the world 228

Supply total 2,446*

USE OF FISIM:

Intermediate consumption

S11 Non-financial corporations 770

S12 Financial corporations 7

S13 General government 121

S14 Households 725

S15 Non-profit institutions serving households 30

Final consumption

Private consumption

S14 Households 701

(Consumption of government and NPISHs 151)

Exports

S2 Rest of the world 92

Use total 2,446

Effect on GDP: Consumption + exports - imports + 565

(0.4% of GDP)

The value of financial intermediation services indirectly measured is calculated using a reference interest rate which is the mean interest rate of producers of FISIM, or loans and deposits between credit institutions. The reference interest rate is applied to the data on interest flows and stocks by sector which are obtained from credit institutions. Within sectors, FISIM are divided among user industries pro rata to their total output. The exports and imports of FISIM are calculated using an external reference interest rate, which is the mean interest rate of loans and deposits between domestic and foreign credit institutions.

Example 2: Calculation of FISIM for user sector xx

Loan interest rate of sector = 3.6%

Loan stock of sector = 1,000 million

Deposit interest rate of sector = 1.0%

Deposit stock of sector = 500 million

Reference interest rate = 2.2%

FISIM from loans = (Loan interest rate - Reference interest rate) * Loan stock = (3.6% - 2.2%) * 1,000 = 14 million

FISIM from deposits = (Reference interest rate - Deposit interest rate) * Deposit stock = (2.2% - 1.0%) * 500 = 6 million

Total FISIM used by sector = 14 + 6 = 20 million

The allocation of financial intermediation services indirectly measured also influences sector account interests (D41). The interest received from user sectors (D41R) grows, because the FISIM of deposits are added to the interest on deposits. The interests paid by user sectors (D41K) diminish by the amount of the FISIM of loans. Thus, the use of financial intermediation services indirectly measured, in other words loan and deposits margins, move from the sector accounts' property income and expenditure to intermediate or final consumption, where the use of all other services is also shown in national accounts.

In the producer sectors of FISIM, i.e. S.122 and S.123, the impact on interests is reversed, that is, received interests diminish and paid interests grow. The revision makes the interests of sector accounts into theoretical ones complying with the reference interest rate stock and "cleaned" of FISIM. The actual interests received and paid are shown as notes to sector accounts, detached from the accounting system.

In the sector rest of the world (S2) exports and imports go up when financial intermediation services indirectly measured are added to them. In addition, exports of FISIM from deposits (FISIM of deposits made by customers from the rest of the world into domestic credit institutions) are added to and imports of FISIM relating to loans (FISIM of loans taken by domestic customers from foreign credit institutions) are subtracted from received interests. Imports of FISIM from deposits (FISIM of deposits made by domestic customers into foreign credit institutions) are added to and exports of FISIM relating to loans (FISIM of loans taken by foreign customers from domestic credit institutions) are subtracted from paid interests.

All descriptions of the methodological changes in the EU reform process of national accounts can be found at:

http://tilastokeskus.fi/til/vtp/men_en.html

 

Summary of the effects of changes

Calculations according to the FNA2005 are here compared with the figures published in July 2005 following the FNA2000. Then it should be taken into account that financial intermediation services indirectly measured (FISIM) were in these calculations divided between user sectors from 1995 to 2004. In the new figures this division was now made for the years 1975 to 1994 as well.

As concerns the year 2004, the changes were also influenced by that the data sources used last summer were mainly preliminary. The supply and use tables for the year 2003 were also compiled now for the first time.

Gross domestic product

According to the FNA2005 calculations, Finland's gross domestic product was 1.0 to 2.3 per cent higher in 1975 to 1993 than in the previous calculations. In 1994 to 1998 the new gross domestic product differs from the previous one by only -0.2 to +0.2 per cent. The new gross domestic product for the years 1999 to 2004 is 1.1 to 2.5 per cent higher than the previous one. The difference was at its biggest in 2001 (EUR +3.4 billion).

The upward change of GDP in 1975 to 1994 was mostly a consequence of the division of FISIM. The change in the calculation method of forestry also increased GDP in 1975 to 1993, but at most only by half a per cent. From 1994 on the change in the calculation method of forestry decreased GDP, at most by 0.2 per cent.

The upward revision of GDP in 1999 to 2004 was mainly a result of the upward revision of exports of services. The supply and use tables were balanced again. In this connection intermediate consumption of different industries was revised. This has an effect on value added by industry and GDP.

Volume development of gross domestic product

The quantitative development of GDP in different years also altered slightly. The annual volume change of GDP was revised by -0.8 ... +0.6 per cent expect in 2001, when the change was exceptionally large: from growth of one per cent to 2.6 per cent, that is, +1.6 percentage points. This was caused by the upward revision of exports of services.

Transition to the changing base year has changed the growth figures of GDP somewhat, because the relative shares of different industries differ from before. Now they are more up-to-date and give a more accurate image of the realised development. Introduction of double deflation has also changed the growth figures starting from 2001.

Similarly, adoption of performance volumes as volume indicators of certain public services has changed the GDP growth figures from 2001 onwards, most in 2001 (-0.4 percentage points).

Changes in the calculation of agriculture have also had an effect on the annual volume changes of GDP, at most half a percentage point.

Demand components of national economy

The revisions made to exports of services increased exports between 1999 and 2004 yearly by EUR 1.7 to 4.2 billion. The relative growth of exports of services was 27 to 62 per cent. The level of total exports (goods and services total) rose in those years by 3 to 7.5 per cent due to the revision.

The level of final consumption expenditure grew from 1975 to 1994 yearly by 1.2 to 2.7 per cent. After that the level has not changed essentially. The level of households' consumption expenditure increased in those years by 1.3 to 3.2 per cent. The reason for this was the division of FISIM to user sectors, which was already calculated last July for years 1995-2004. The level of public consumption expenditure went up by 0.5 to 2 per cent from 1975 to 1994. This was mainly caused by the division of FISIM and the review of consumption of fixed capital.

The level of investments declined in 1975 to 2000 yearly by 0.4 to 1.2 per cent and in 2001 to 2002 by 1.8 to 2.8 per cent. The main reason for this was the downward revision of investments in computer software.

The primary reason for the revision of changes in inventories was the inclusion of net growth of forests as changes in inventories.

Employment and labour input

The number of employees and hours worked in the national economy was revised downwards mainly in household services. The revision was at its largest -8,000 persons in 2001.

The number of foreigners working in Finland and especially that of Finns working abroad were revised. The number of Finns working abroad was revised upwards at most by 10,000 persons.

Sector accounts

Financial position (net lending) of non-financial corporations improved from 1975 to 1987, in 1999 and from 2001 on. In other years the financial position weakened. Starting from 1999 the improved financial position was influenced by the upward revision of exports of services. The development of earlier years was affected by that the production accounts of all industries were divided between non-financial corporations and household sectors. Earlier most of them were calculated only on the level of non-financial corporations and households total and in the sector accounts non-financial corporations were a kind of a residual sector of the calculations.

The financial situation of households weakened correspondingly from 1975 to 1988 and as a rule improved in later yeas. The division of FISIM increased households' disposable income and consumption expenditure from 1975 to 1994, when part of interests were transferred to financial intermediation services indirectly measured.

Net lending by central government and at the same time, by general government weakened due to the changed recording of bank support between 1993 to 1996 and in 1999. The effect was largest in 1995 when it was EUR 2.2 billion. The EMU deficit for 1995 in relation to GDP grew from -3.9 to -6.2 per cent. In the other years the effect was under EUR one billion and in EMU deficit at most around one percentage point.

The financial position of financial corporations improved likewise due to the changed recording of bank support. The financial position of insurance corporations also improved, particularly in 1999 and 2000 on account of the changed calculation method and in 2001 as an error was corrected in dividend expenditure. The total net lending of financial and insurance corporations improved most in 1995 (EUR +2.4 billion).

The current external balance improved due to the revision in exports of services by around EUR 2 to 4 billion from 1999 to 2004. The current external balance for 2004 also improved due to new information on property income and expenditure. Net lending from the rest of the world in 2004 was now EUR 11.7 billion, while previously it was EUR 6.3 billion.

Brief description of the compilation process

The compilation of national accounts is organised into some 30 activities by statistical topic, for example, by industry or sector. The data are first calculated for these statistical topics following the concepts and classifications of national accounts. The used data sources are partly statistics on the topics to be described (e.g. industrial statistics, financial accounts of the State, insurance company statistics), and partly sources common to several areas (e.g. Business Register, business structures statistics, Labour Force Survey). The data on the statistical topics form the basis for the summary description of the economy, formation of total national accounts: the national balance of supply and demand, supply and use tables, and sector accounts. Further data sources used in the compilation of supply and use tables include manufacturing commodity statistics, foreign trade statistics and taxation data. The data sources for national accounts cover the majority of the statistics produced by Statistics Finland and a wide array of material supplied by data producers outside Statistics Finland.

A preliminary national balance of supply and demand compiled from statistical topics is needed before the compilation of supply and use tables. In the national balance of supply and demand the data calculated by statistical topic are compiled according to the three main approaches used for calculating GDP: production, expenditure and income approaches. The supply and demand of goods and services and the income components of gross domestic product are presented in the national balance of supply and demand.

As their names imply, supply and use tables examine the supply and use of products. To this aim, data by industry on output and intermediate products are divided between products and statistics on industrial and foreign trade products are utilised. Data on taxes on products and trade and transport margins are essential in the compilation of supply and use tables, that is, in the price formation process. The underlying principle in the compilation of supply and use tables is systematic treatment of the flow of products from supply to use. In order to obtain a balance between supply and demand, the source estimates calculated on the basis of the source materials must be altered, the data in the source materials must be amended and the correct data for the whole have to be searched by combining several data sources. The compilation of the tables produces a balanced product account, which at the same time constitutes the national balance of demand and supply, and in which supply equals use so that no statistical discrepancy appears.

Sector accounts describe partly the same transactions as the national balance of supply and demand and supply and use tables, but they are presented from the perspective of the sector, for example, output by sector. Income and use of income and capital formation and its financing are described by sector to find out the financial position (net lending and net borrowing) of each sector.

When calculating data by statistical topic, the correctness of the data is viewed in several different ways. Different data describing the same topic are compared to ensure exhaustiveness and correctness of annual changes. For several accounting variables, or transactions, the data are calculated both at the nominal prices of the reference time and at the prices of the previous year. This enables comparisons of value, volume and price changes between different points of time. In that case, the equation: value change = volume change x price change (1+ Δv = (1+ Δq) x (1+ Δp) ), holds true. Change in the productivity of labour is measured by the ratio between volume change in the value added of an industry and change in labour output, and the development of the earnings level of an industry calculated by the ratio between wages and employees or changes in labour input.

On sector accounts the equality of income and expenditure calculated by sector is checked on the level of total national accounts. The derived income and capital transfers are equal to the corresponding transfers paid. Sector accounts are adjusted to the data of the national balance of supply and demand: the common transactions of the national balance of supply and demand and sector accounts, such as final consumption expenditure or capital formation, must be of equal size.

The key parameters of sector accounts include savings ratio and net lending. Savings ratio, or the proportion of savings in disposable income, is particularly interesting for the household sector, while net lending describing the financial position of a sector is especially significant for general government.

The data at constant prices are calculated using the prices of the previous year and they are given in this publication at the prices of the reference year 2000. Constant-price calculations 2001 to 2003 are based on supply and use tables by product.

The calculation of preliminary data for 2004 is mainly based on data on the industry and statistical topic level, no preliminary supply and use tables have been compiled. For this reason, preliminary figures also show statistical discrepancy between demand and supply at current prices.

The data sources and calculation methods of national accounts are depicted in the methodological description on the compilation process of Finland's gross domestic product in accordance with ESA95, which is accessible on Statistics Finland's website at:

http://tilastokeskus.fi/til/vtp/men.html

The methodological description can be found in English on Eurostat's public CIRCA pages.

Classifications

Product classification

The final figures are calculated using a classification comprising 952 products. The classification is based on the Classification of Products by Activity (CPA) of the European Union.

Industrial classification

Data by industry are published separately at the character level irrespective of size (e.g. B, P). The publication also makes use of the multi-character numerical level, where necessary. The classification is based on the TOL2002 and NACE 2002 classifications.

Classification of producer types

• Market producers
• Producers for own final use
• Other non-market producers

In this publication data are only presented at the producer types total level with the exception of those in Table 2.5 Productivity of labour by industry, where data describe only the productivity of market producers and producers for own final use.

Classification of investment goods

The main product types are published by sector. On the industry level the publication contains the total investments of the industry at current and constant prices.

Classification of sectors

The institutional sector is defined on the basis of decision-making units. Each institutional sector is divided further into industries determined on the basis of establishments.

The classifications can be found in more detail at the end of Section 6.

Main aggregates

GDP, gross domestic product at market prices is the final result of the production activity of resident producer units. It can be defined in three ways: as the sum of gross value added of the various institutional sectors or the various industries plus taxes and less subsidies on products; as the sum of final uses of goods and services by resident institutional units (consumption and gross capital formation, plus exports and minus imports); as the sum of incomes (compensation of employees, taxes on production and imports less subsidies, gross operating surplus and gross mixed income). (ESA 8.89)

By deducting the consumption of fixed capital from the gross domestic product, we obtain the net domestic product at market prices, NDP. (ESA 8.90.)

Value added(gross) refers to the value generated by any unit engaged in a production activity. In market production it is calculated by deducting from the unit's output the intermediates (goods and services) used in the production process and in non-market production by adding up the compensation of employees, consumption of fixed capital and possible taxes on production and imports. (ESA 8.11.)

GNI, gross national income represents total primary income receivable by resident institutional units: compensation of employees, taxes on production and imports less subsidies, gross operating surplus or gross mixed income and property income. It equals GDP minus primary income payable by resident units to non-resident units plus primary income receivable by resident units from the rest of the world. National income is an income concept, which is more significant if expressed in net terms, i.e. after deduction of the consumption of fixed capital. (ESA 8.94.)

Primary income is the income which resident units receive by virtue of their direct participation in the production process, and the income receivable by the owner of a financial asset or other such assets in return for providing funds to another unit. The income can contain compensation of employees, taxes on production and imports less subsidies, operating surplus or mixed income and property income. (ESA 8.22.)

Operating surplus, net is obtained when the compensation of employees and othertaxes less subsidies on production and consumption of fixed capital are deducted from the value added. It is the surplus or deficit on production activities before interest, rents or charges and corresponds to the income which the units obtain from their own use of their production facilities. (ESA 8.18.)

Mixed income represents the balancing item of unincorporated enterprises in the households sector corresponding to remuneration for work carried out by the owner or members of his family including profits gained as entrepreneur. (ESA 8.19.)

Final consumption expenditureconsists 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. Final consumption expenditure is incurred by households, non-profit institutions serving households and general government. Non-financial corporations, financial and insurance corporations do not have final consumption expenditure. (ESA 3.74.-3.80.)

Actual final consumption consists of goods or services that are acquired by the institutional units mentioned directly above for the direct satisfaction of human needs, whether individual or collective. Some of the goods and services may be provided as social transfers in kind.

Actual final consumption of households comprises goods and services acquired by households themselves and goods and services obtained from non-profit institutions or general government as social transfers in kind. The latter includes health, educational and social services.

Actual final consumption of general government comprises collective services provided by general government for all members of a community or of a certain group. Examples of these are general administration, national defence and environmental protection. (ESA 3.81.-3.88.)

Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year. (ESA 3.102.)

Changes in inventories are measured by the value of the entries into inventories less the value of withdrawals and the value of any recurrent losses of goods held in inventories. The inventories may consist of materials and supplies, work-in-progress, finished goods and goods for resale. (ESA 3.117.-3.119.)

Exports of goods and services consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents. (ESA 3.128.)

Imports of goods and services consist of transactions in goods and services (purchases, barter, gifts or grants) from non-residents to residents. (ESA 3.129.)

Disposable income is the balancing item of the current income in the secondary distribution of income account. It is obtained for each sector by adding current transfers receivable to primary income and by deducting all current transfers payable. It can be used for consumption or saving. (ESA 8.31.)

Adjusted disposable income is a corresponding item in the redistribution of income in kind account.

Saving is the balancing item in the use of income accounts. It is the positive or negative amount resulting from current transactions which establishes the link with accumulation. If saving is positive, non-spent income is used for the acquisition of assets or for paying off liabilities. If saving is negative, certain assets are liquidated or certain liabilities increase. (ESA 8.42.-8.43.)

Net lending/borrowing corresponds to the amount available to a unit or sector for financing, directly or indirectly, other units or sectors, or a net borrowing corresponding to the amount which a unit or sector is obliged to borrow from other units or sectors. (ESA 8.47.)

Sources:

European System of Accounts ESA 1995, Eurostat, 1997

System of National Accounts 1993, UN, OECD, EU, IMF, World Bank, 1993

Council Regulation (EC) No 2223/96 on the European system of national and regional accounts in the Community.

Council Regulation (EC) No 448/98 on the European system of national and regional accounts in the Community.

 

Kansantalouden tilinpito 1975-1998, Aikasarjat, SKT95 uudistus (National Accounts, Time series, FNA95 revision), OSF National Accounts 2000:1

Talouden rakenne 1995-2000, Tarjonta- ja käyttötaulukot, panos-tuotos (Structure of the Finnish Economy 1995-2000, Supply and Use Tables, Input-Output) OSF National Accounts 2003:4

Kansantalouden tilinpito, Aikasarjat 1975-2002, Osa I Uudistetut taulukot 1989-2002* (National Accounts, Time series 1975-2002, Part 1 Revised Tables 1989-2002*), OSF National Accounts 2004:2A

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Last updated 5.7.2007