Gross Domestic Product: non-financial national accounts allow estimating various stages of economic process characterised by institutional sectors: production, formation of income, income allocation, their re-allocation and use, as well as accumulation of non-finances.

Definitions

Non-financial non-produced assets consist of land and other tangible non-produced assets that may be used in the production of goods and services, and intangible non-produced assets.

The adjustment for the change in the net equity of households in pension funds reserves represents the adjustment needed to make appear in the saving of households the change in the actuarial reserves on which households have a definite claim and which are fed by premiums and contributions recorded as social contributions.

Capital transfers involve acquisition or disposal of an asset or assets, by at least one of the parties involved in the transaction. Capital transfers can be made in cash or in kind.

A capital transfer in cash consists of the transfer of cash that the first party has raised by disposing of an asset or assets (other than inventories), or that the second party is expected, or required, to use for the acquisition of an asset, or assets (other than inventories). These are capital taxes, investment grants and other capital transfers. 

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.

Compensation of employees is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the accounting period.

Consumption of fixed capital represents the amount of fixed assets used up, during the period under consideration, as a result of normal wear and tear and foreseeable obsolescence, including a provision for losses of fixed assets as a result of accidental damage which can be insured against.

Current external balance represents the surplus (if it is negative) or the deficit (if it is positive) of the total economy on its current transactions (trade in goods and services, primary incomes, current transfers) with the rest of the world.

Current international co-operation includes all transfers in cash or in kind between general government and governments or international organisations in the rest of the world, except investment grants and other capital transfers.

Current taxes on income, wealth, etc. cover all compulsory, unrequited payments, in cash or in kind, levied periodically by general government and by the rest of the world on the income and wealth of institutional units, and some periodic taxes which are assessed neither on the income nor the wealth.

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

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.

Financial corporations sector consists of institutions that are mainly engaged in financial intermediation and auxiliary financial activities.

General Government sector covers institutional units the main function of which is distribution of income or wealth. Output of these units is intended for individual or common use, and it is financed from compulsory contributions paid by the units of other sectors or by all institutional units. These units are non-market producers.

Gross domestic product (GDP) represents the total amount of end products and services produced in the territory of a country within a year. GDP is calculated on the basis of data on domestic production (at current and constant prices), expenditure (at current and constant prices) and income (only at current prices).

Gross domestic product from the production approach is calculated as the sum of gross value added (at basic prices) from all kinds of economic activity or institutional sectors plus taxes and less subsidies on products.

From the expenditure approach, gross domestic product is the sum of domestic use of goods and services (administrative and personal expenditures for actual final consumption and gross capital formation) plus exports minus imports of goods and services.

Gross domestic product from the income approach contains information on primary income from economic activity (remuneration of employees + gross income/mixed income + taxes on production and imports – subsidies).

The gross entrepreneurial income of the total economy is the sum of the gross entrepreneurial incomes of the various sectors.

Gross fixed capital formation consists of resident producers’ acquisitions less disposals of fixed assets during a given period plus certain additions to the value of non-produced assets generated by the productive activity of producer or institutional unit.

Gross mixed income of the total economy is identical with the gross mixed income of the household sector.

Gross national disposable income is the sum of the gross disposable incomes of the institutional sectors.

Gross operating surplus of the total economy is the sum of the gross operating surpluses of the various industries or the various institutional sectors.

Gross saving is the portion of national disposable income that is not used for final consumption expenditure. Gross (or net) national saving is the sum of the gross (or net) savings of the various institutional sectors.

Private household (household) includes persons living in one dwelling and sharing expenditure or one person having a separate housekeeping.

Sector 'Households' includes individuals or groups of individuals as consumers and, possibly, also as entrepreneurs who produce goods for market and provide non-financial and financial services (market producers). 

This sector also includes individuals or groups of individuals as producers of goods and services for own final consumption.

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

Intermediate consumption is value of those goods and services which are involved in the production process for consumption, excluding fixed assets consumption of which is entered as consumption of fixed capital. In the production process goods and services can be either transformed, or used.

Miscellaneous current transfers consists of current transfers to NPISHs, current transfers between households, fines and penalties (which were imposed on institutional units by courts of law or quasi-judicial bodies), lotteries and gambling (the amounts paid for lottery tickets or placed in bets), payments of compensation and gross national product based fourth own resource (current transfer paid by the general government of each Member State to the Institutions of the European Union), as well as other current transfers.

The net lending (+) or borrowing (–) of the total economy is the sum of the net lending or borrowing of the institutional sectors. It represents the net resources that the total economy makes available to the rest of the world (if it is positive) or receives from the rest of the world (if it is negative).

Net non-life insurance premiums are premiums payable under policies taken out by institutional units.

The net worth of the total economy is the sum of the net worth of the institutional sectors. It represents the value of the non-financial assets of the total economy minus the balance of financial assets and liabilities of the rest of the world.

Sector 'Non-financial corporations' includes enterprises where distributive and financial transactions are set apart from the owners` transactions, and where the main aim of activity is production of goods and provision of non-financial services for sale on the market.

Non-financial National Accounts are part of the national accounts system systematically characterising various stages of economic process: production, income generation, income distribution, income redistribution, income use and non-finance accumulation.

Non-life insurance claims represent the claims due under contracts in respect of non-life insurance; that is, the amounts which insurance enterprises are obliged to pay in settlement of injuries or damage suffered by persons or goods (including fixed capital goods).

The non-profit institutions serving households sector consists of non-profit institutions that serve households as separate legal persons and are other private non-market producers.

Their main resources other than those from occasional trade are gained from voluntary contributions in cash or in kind from households as consumers, from general government subsidies or as income from real-estate.

Output is products (goods and services) generated in the reference period.

Property income is the income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to, or putting the tangible non-produced asset at the disposal of, another institutional unit.

Social benefits are transfers to households, in cash or in kind, intended to relieve them from the financial burden of a number of risks or needs, made through collectively organised schemes, or outside such schemes by government units and NPISHs; they include payments from general government to producers which individually benefit households and which are made in the context of social risks or needs.

Social contributions include social security contributions by employees, employers, and self-employed individuals, and other contributions whose source cannot be determined. They also include actual or imputed contributions to social insurance schemes operated by governments.

Subsidies are current unrequited payments which general government or the Institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production.

Subsidies on products are subsidies which are paid for one unit of goods or services produced or imported.

Subsidies on products are usually paid when the good is produced, sold or imported. It is accepted that subsidies on products can be related only to market output or output for own final consumption.

The System of National Accounts is a set of specific sequential tables, which shows resources of goods and services and the use thereof, as well as flows across the main economic sectors of revenues generated by economic activities, and the increase or decrease in the national wealth

Taxes of products are taxes which must be paid for each unit of good or service produced or included in the operation.

Taxes on production and imports consist of compulsory, unrequited payments, in cash or in kind which are levied by general government, or by the Institutions of the European Union, in respect of the production and importation of goods and services, the employment of labour, the ownership or use of land, buildings or other assets used in production.

'The rest of the world' is a grouping of units without any characteristic functions or resources; it consists of non-residential units insofar as they are involved in transactions with resident institutional units or have other economic ties with resident units.

Valuables are non-financial goods that are not used primarily for production or consumption, do not deteriorate (physically) over time under normal conditions and that are acquired and held primarily as stores of value.

Value added is increase of product’s market value, which arises in the result of any kind of economic activity.

It is calculated by deducting intermediate consumption from production (at basic prices). The balancing item of the production account is value added.

Value added at factor cost is the gross income from operating activities after adjusting for operating subsidies and indirect taxes. It can be calculated from turnover, plus capitalised production, plus other operating income, plus or minus the changes in stocks, minus the purchases of goods and services, minus other taxes on products which are linked to turnover but not deductible, minus the duties and taxes linked to production.

Data availability

Dissemination Format and Release Calendar

Non-financial national accounts are published once a year at the beginning of October. Gross Domestic Productannual data»

Publications

Download CSB publications on various time periods (starting from 2007) in section E-publications and subscribe for paper publications in section Publications.

Classification

Data are acquired, calculated and classified, using the following classifications:

  • Classification of the Administrative Territories and Territorial Units of the Republic of Latvia (CATTU) (28.12.2010 edition);
  • Statistical Classification of Economic Activities in the European Communities (NACE Rev. 2);
  • Statistical Classification of Individual Consumption (COICOP);
  • Classification of the Purposes of Non-Profit Institutions Serving Households (COPNI);
  • Classification of Budget Expenditure by Economic Category;
  • Classification of Budget Revenue;
  • Classification of Institutional Units;
  • Classification of the Functions of Government (COFOG).

A Classification Catalogue with classification codes and their explanations has been published on the CSB website.

Customised data sets

If you would like to obtain statistical data that are not available in publications or in the CSB online data base, please send us an information request:
 - postal mail: 1 Lāčplēša Street, Riga, Latvia, LV-1301;
 - e-mail: info [at] csb [dot] gov [dot] lv;
 - visiting Information centre.

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Data collection

Survey method and source data

Information is obtained from the following data sources:

  • Surveys of enterprises and institutions;
  • Labour Force Survey;
  • Household Budget Survey;
  • Data from the Government budget, Ministry of Finance, Treasury, State Revenue Service, Ministry of Agriculture, Latvia State Institute of Agrarian Economics, Bank of Latvia and Financial and Capital Market Commission.

Statistical population

  • Enterprise coverage;
  • Coverage of institutions financed from the state and local government budget;
  • Population coverage – households, labour force.

Statistical processing

Calculation method

Gross Domestic Product: Non-financial national accounts are calculated in line with ESA 1995 methodology.

The System of National Accounts is a set of tables presenting resources and expenditure of goods and services by institutional sector, as well as turnover of income from economic activity across the main sectors of the economy and increase or decease in the national wealth.

The System of National Accounts stresses results of economic activity performed by units – enterprises and institutions operating in the respective economic territory.

Unit affiliation to a specific sector is determined by its key activity and functions, which allow judging about economic behaviour, thus the way it generates income and participates in redistribution and expenditure of the income. Each sector is formed by institutional units with similar economic behaviour.

Data in the Latvian system of national accounts are published according to sectors:

  • Total economy (S.1):
    • Non-Financial Corporations (S.11),
    • Financial Corporations (S.12),
    • General government (S.13),
    • Households (S.14),
    • Non-profit institutions serving households – NPISH (S.15),
    • Not specified (NS),
  • Rest of the world (S.2).

Gross domestic product is one of the most important indicators in the System of National Accounts, as, including all income from economic activity, it characterises efficiency of the economic activity. Efficiency of the used production resources is characterised also by the ratio between value added and resources used for intermediate consumption. Among the national economy sectors the key role in Gross domestic product formation takes the Non-Financial Corporation sector (S 11).

The System of National Accounts starts with the Foreign Trade Account of Goods and Services (V.1), where the volume of foreign trade is presented both - as income and expenditure of the Rest of the world sector (S.2) and as resources and expenditure of goods and services in the Production account. Imports and exports of goods and services have a significant role in the total formation of resources as well as in the expenditure of these resources.

The determining role in the turnover of goods and services plays the national domestic economy.

The amount of goods and services produced within the territory of Latvia is presented in the Production account resources approach (code P.1) by sector of production. By deducting intermediate consumption (P.2) from output of goods and services in the expenditure approach, value added at basic prices is obtained. This evaluation does not include taxes paid upon selling the production or services (value added tax, customs duty, excise duty). As these duties are related to sale of products, not production thereof, they are not distributed between sectors; however, the total of these taxes and duties is presented in sector NS.

Gross domestic product is one of the key indicators in the System of National Accounts, as it includes all income from economic activity, thus characterising efficiency of this activity. Efficiency of the used production resources is also characterised by the ratio between value added and resources used for intermediate consumption.

The next group of accounts, marked as group II in the System of National Accounts, is income accounts. These accounts contain information on the formation of primary income, as well as flow of this income between sectors of the national economy, redirecting it from the sectors they have been generated to sectors where this income belongs, as well as to final consumption sectors.

The first of the income accounts is the Generation of income account (II.1.1). A part of the resources of this account is generated from Production account balance position B.1g – Gross domestic product. In the expenditure approach the primary income from economic activity is presented, of which the entrepreneur pays to residents and government the following: remuneration to employees (D.1), production and import taxes (D.2) less subsidies (D.3), as well as operating surplus at the disposal of the entrepreneur (B.2g) and mixed income generated in the Household sector (B.3g), containing both – remuneration and profit elements.

The following income accounts present income flows that are not closely related to economic activity, but are generated from the lease of property for production or as the result of redistribution of primary income. The most important income types related to property are interest for funds or securities, dividends, withhold of quasi corporation income, rent payments. In the redistribution of property income, also the Rest of the world sector is included, where in the resources approach dividends or interest payments paid to foreign partners are presented and in the expenditure approach—the amounts received. The allocation of primary income account is closed with the balance of payments of primary income (B.5g) also called Gross national income. Unlike Gross domestic product, which presents income generated in the territory of the country, the Gross national income shows operating income belonging to the residents of Latvia. The difference between Gross domestic product and Gross national income is generated from external payments related to the economic activity – remuneration to the employees and property income.

In the System of National Accounts gross labour remuneration is presented as primary income, including also the social tax paid by entrepreneurs. Social tax diversion to the Public administration sector as well as the opposite direction flows – from Public administration sector to Household sector in the form of pensions and subsidies – are presented in the secondary distribution of income account (II.2). This account next to social installments includes also income tax payments, as well as other payments - member fees of public and international organisations, different non-refundable allowances.

The secondary distribution of income account (II.2) is closed with total disposable income (B.6g), which shows income in breakdown by sector, where it is actually spent for final consumption. These resources shall cover consumption needs, as well as formation of the necessary stocks for ensuring further economic activity.

Further distribution of income in the Secondary distribution of income account (II.3) is carried out between Public administration and Household sector. This account shows services generated in the Public administration sector from budget appropriations and are intended for individual consumption. These are mainly services provided by health care, education and cultural establishments. In line with this redistribution also the consumption volumes in the Public administration and Household sector are calculated in two ways: the Use of disposable income account (II.4.1) in line with sector expenditure, and the Use of adjusted disposable income account (II.4.2) - according to the actual consumption. These accounts are closed with Total savings (B.8g), which characterises the volume of funds that can be used for further development of the economic activity.

The next account group is Accumulation (III), formed by the Capital account (III.1) and the Financial account (III.2). The resources approach of the Capital account includes savings accumulated as result of economic activity (B.8g), as well as different payments across sectors, related to accumulation of savings, for example, budget subsidies for investments, the Public administration sector pays to non-financial enterprises. The summary of resources approach of the capital account (B.10.1) characterises increase in funds at disposal of each sector, achieved as result of economic activity. The expenditure approach of the capital account shows the growth of the value of fixed assets as result of purchase or decrease thereof due to liquidation, as well as changes to stocks.

The Capital account is closed with balance position (B.9) which can also be considered as financial savings, as these are resources that are directed for credits or, should a need be, attracted in the form of a loan. In the event balance position B.9 is a positive number it means that this sector has lent its financial funds to other sectors and vice versa – a negative number means the debt has grown.

Data revision

In line with the CSB Revision Policy Guidelines the published data are revised after annual balancing of the System of National Accounts.

Comparability

Comparability over time

Comparable data are available since 1995.

International comparability

Eurostat

The Statistical Office of the European Communities on its homepage publishes information on gross domestic product in EU-28 and in each individual country (annual and quarterly statistics). Information can be found in the section: Statistics/ Economy and finance/ National accounts (including GDP)/ Database/ Annual national accounts.

Methodological information is available: epp.eurostat.ec.europa.eu/portal/page/portal/national_accounts/introduction

International Monetary Fund

International Monetary Fund (IMF) publishes methodological description on national accounts in English in the so called SDDS format on its home page.

http://dsbb.imf.org/

Confidentiality

Confidentiality of the information provided by respondents is protected by the Section 17 of the Statistics Law stipulating rights and obligations of the Central Statistical Bureau of Latvia and other state authorities producing official statistics. Read more

Contact person on methodology

Name Surname Phone number Position Email
Elita Kalniņa 67366961 departamenta direktora vietnieks Elita.Kalnina@csb.gov.lv

Last update

07.01.2013

Gross Domestic Product in Latvia, total

Explanation of symbols

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Magnitude zero

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Less than half of the unit employed

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Data not available or too uncertain for presentation

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Figure not applicable because column heading and stub line make entry impossible, absurd or meaningless

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Data not released for confidentiality reasons

If data are absolute numbers

0

Magnitude zero