Revision national accounts: Results for the report year 2010

06/03/2014 15:00

Today, the first results of the revised version of the national accounts will be published by Statistics Netherlands. The direct cause for the revision is the adoption of new international methodological guidelines. Statistics Netherlands, like many other European member states, has conducts a source revision simultaneously. As a result of the revision, new estimates for many macro-economic key indicators will become available. The gross domestic product (GDP) for the report year 2010 was adjusted upwards by 44.7 billion euros (7.6 percent); implementation of the new international guidelines accounts for 3.0 percentage points and re-evaluation of new sources accounts for 4.6 percentage points. The public deficit for 2010 was adjusted downwards from 5.1 percent to 5.0 percent of the GDP. After revision, the public debt was adjusted downwards from 63.4 to 59.0 percent of the GDP. The figures released today only refer to the report year 2010. In June 2014, revised figures for more recent and earlier years will become available. No later than September 2014, all member states of the European Union have the obligation to publish their national accounts consistent with the new international methodological guidelines.

The national accounts are the source for frequently used macro-economic variables, e.g. the gross domestic product (GDP), the trade balance, the gross national income (GNI), the public deficit and the public debt. As a result of the revision, the level of these figures will change. The first results solely refer to the report year 2010.

Revisions of the national accounts are conducted on a regular basis. The reason for the current revision is the adoption of new international methodological guidelines. These guidelines have been laid down in the European System of Accounts (ESA2010), which is entirely based upon the new System of National Accounts of the United Nations (SNA2008). International guidelines facilitate comparison between national economies and provide a safeguard that structural economic developments are measured consistently. Adoption of the new ESA guidelines is obligatory for all member states of the European Union. The most important adjustments in this revision concern research and development (R&D) expenditure plus a number of military expenses. These will henceforth be included in investments. Software that organisations have developed for private use will be valued against the market price instead of the cost price. The effects of illegal activities on a country’s economy must also be included.

Statistics Netherlands, like many other European member states, has conducted a source revision and a methodological revision simultaneously . The level of the indicators is re-evaluated and made consistent with the new data sources, which have become available in recent years. Introduction of new source levels is not possible, because this would interfere with economic growth figures. Developments resulting from the new sources were already used prior to the revision to estimate indicator developments, for example, the Wage declaration database and the VAT database compiled by the tax authorities, new statistics compiled by the Dutch Central Bank and the revised trade register of the Chamber of Commerce.

Each revision of the national accounts is based on one verification year. Changes in definitions and source material are implemented on this year and the effects of the changes on the level of the figures are analysed. The verification year for the current revision is 2010. The previous revision was based on the year 2001.

As a result of the revision, new estimates for many macro-economic key indicators have become available. The most important are mentioned below:

The gross domestic product (GDP) for the report year 2010 was adjusted upwards by 44.7 billion euros (7.6 percent); implementation of the new international guidelines accounts for 3.0 percentage points. The most important effect is that R&D costs are now included in investments and no longer in current costs. Re-evaluation of new sources accounts for adjustment of the GDP by 4.6 percentage points.
Because the GDP was also adjusted in all the preceding years, the effect for the economic growth figures will be limited. More accurate information will be published by Statistics Netherlands at the end of June 2014.
The public deficit consistent with the EMU definition for the report year 2010 has been adjusted upwards by 1.8 billion euros, mainly as a result of the use of new source data. Because the GDP was also adjusted upwards, the net effect on the public deficit, expressed as a percentage of the GDP, is modest. The public deficit for 2010 is reduced from 5.1 to 5.0 percent of the GDP.
The public debt for the year 2010 has been adjusted upwards by 0.6 billion euros as a result of the use of new source data. Because the GDP adjustment is larger in relative terms,, the public debt for 2010 was adjusted downwards from 63.4 to 59.0 percent of the GDP.
The trade balance for the report year 2010 has been adjusted upwards by 5.5 billion euros to 52.8 billion euros. The main reason for adjustment of the trade balance is the use of new source information about international trade.
The gross national income (GNI) for the report year 2010 has been adjusted upwards by 57.7 billion euros (10.0 percent); adjustment of the GDP accounts for 44.7 billion euros and adjustment of primary income flows to and from other countries (in particular interest and dividends) accounts for 13.0 billion euros. The main reason is the use of new source material provided by the Dutch Central Bank. If the GNI changes, this may affect the Dutch contribution to the European Union, but this also depends on whether the GNIs of the other member states, which also implement revisions, change.

For more background information and figures related to the revision, the reader is referred to the publication National accounts, revision 2010 by Statistics Netherlands. This publication deals with the level of the figures for the verification year 2010. It shows the difference between the figures before and after revision and also indicates to what extent the difference is caused by the new guidelines or new sources. In addition to the indicators mentioned above, the publication also includes information on other indicators and more detailed information on sectors and industries. Later this year, other years and quarters before and after 2010 will also be revised. As a result of the revision, the levels of the indicators for all periods under review will be adjusted.

At the end of June 2014, revised figures of the national accounts for the period up to and including the first quarter of 2014 will be published. Subsequently, the Dutch national accounts will be consistent with the new international guidelines. No later than September this will apply to all the member states of the European Union.