2. Revisions to gross domestic product (GDP)

Most of the 17.4 billion euros upward revision to GDP for the 2022 reporting year is the result of the upward revision to the level of GDP in current prices for the 2021 reporting year. The provisional estimates use only the developments compared to the previous year taken from the source statistics, rather than using the absolute values as is the case for the final estimate. This means that a revision to the level of GDP for the final 2021 reporting year would be fully reflected in the level of the provisional GDP for the 2022 reporting year. The GDP revision for the 2021 reporting year is explained below.

2021 reporting year

In February 2022, for the first time, CBS published an annual figure for GDP for the 2021 reporting year, based on the sum of four quarterly estimates. A second calculation was published in March 2022 that incorporated additional information on the four quarters of 2021. A third estimate, published in June 2022, incorporated new annual figures for agriculture, insurance and government as compared to the second calculation. The estimate published today incorporates the results from production statistics for the 2021 reporting year, which were made available early this year. 
With its production statistics, CBS collects detailed annual information on production and consumption in almost all branches of industry. Information on production, gathered using methods such as surveys of businesses and the use of VAT information, was available in the earlier estimates, but this information did not yet cover consumption of energy, materials and services. As a result, those estimates are generally based on the assumption that the ratio of production to consumption will be the same as in the last year for which production statistics are available.
However, 2021 was the second ‘coronavirus year’, and the exceptional economic conditions in that period threatened to skew some basic principles for making quarterly GDP estimates. For this reason, CBS deliberately intervened in the normal procedure in certain cases, with one key difference being that the established production-consumption ratios from the previous year were not relied upon. New sources and methods were also used.

Despite these interventions, GDP growth for the 2021 reporting year was still subject to much more significant revisions than usual. As described above, this is mainly due to the use of new information on companies that was gained from production statistics. When provisional figures were published in June 2022, GDP volume growth in 2021 was still 4.9 percent. This figure has now been revised to 6.2 percent: an upward revision of 1.3 percentage points. In real terms, this is a 10.6 billion euros revision in the volume of GDP; in current prices, the revision is 15.1 billion euros. The revision to GDP in current prices has a direct impact on GNI (see below).

Production

CBS calculates GDP using two approaches: the production approach and the expenditure approach. By definition, both approaches lead to the same GDP. In the production approach, GDP equals the sum of the value added in all branches of industry plus the balance of taxes and subsidies on products. The value added is calculated as the difference between the production and the consumption of energy, materials and services. Compared to the previous estimate, the volume growth of both production (0.9 percentage points) and consumption (0.5 percentage points) have been revised upwards, resulting in an upward revision of value added by 1.4 percentage points, to achieve a volume growth of 6.6 percent. Including the balance of taxes and subsidies on products, GDP volume growth comes to 6.2 percent.

This is significantly affected by a large number of industries with relatively significant revisions in value added, both upwards and downwards. Whereas the upward and downward revisions for the 2020 reporting year almost cancel each other out, the 2021 reporting year is dominated by upward revisions in branches of industry such as the chemical industry, land transport, the food industry and health care. The ratio of production to consumption in these sectors in 2021 was higher than had been assumed in the provisional figures based on the information available at the time, meaning that their consumption of energy, materials and services was lower than the estimate, as a share of production.

Specifically for the wholesale trade and retail trade, the final estimate is the first for which source data are used. In all previous estimates, value added is calculated indirectly through trade margins on goods flows. Both the wholesale trade and retail trade were significantly revised upwards from the previous estimate.
Negative revisions were made in branches of industry such as transport-related warehousing and services, accommodation and food serving and IT, which saw relatively higher actual consumption relative to production, as compared to previous assumptions.

Expenditure

In the spending approach, GDP is equal to the sum of investment, consumption, trade balance and stock increases. Stock increases, the trade balance of goods and household consumption received the most significant upward revisions for the 2021 reporting year. In the case of stocks, this was related to stronger growth in branches of industry such as agricultural products, food products and petroleum products. In the international trade in goods, the balance of merchanting was revised sharply upwards. This annual estimate, published today, is the first estimate for the 2021 reporting year in which source information on merchanting is available. The balance of trade in chemical products and cars has also been revised upwards. One reason for the revision to household consumption was the availability of information from production statistics on retail trade.

2022 reporting year

GDP volume growth for the 2022 reporting year has been revised from 4.5 percent to 4.3 percent (-0.2 percentage points). The downward revision is the net result of upward revisions to the trade balance of goods and household consumption, together with downward revisions to investments, the trade balance of services and stock changes. In current prices, there was an upward revision to GDP of 17.4 billion euros compared to the figures published in March 2023. This includes the 15.1 billion euros revision for the 2021 reporting year.
As with the GDP revision for the 2021 reporting year, the 2022 reporting year’s revision also directly affects GNI for that year.