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National Accounts changes: impact on expenditure and income components of GDP

ONS has recently published an article setting out the impact of previously announced National Accounts changes on the expenditure and income components of GDP. These changes will be introduced in the 2014 Blue Book.

For the expenditure components, almost all of the impact on the level of GDP in current prices (+£43bn on average between 1997 to 2009) comes from upward revisions to gross fixed capital formation (+£23bn) and household final consumption expenditure (+£17bn)

The largest impact on the level of household final consumption expenditure comes from the inclusion of illegal activities (+£9bn), while the largest impact on the level of gross fixed capital formation comes from the inclusion of research and development (+£17bn).

For the income components, the largest impact comes from upward revisions to gross operating surplus (+£27bn).

ONS Chief Economic Adviser Joe Grice said:

“Today’s release gives a further instalment of communicating the impact of the improvements that will be made in this year’s Blue Book. It shows how the forthcoming changes will impact on key components of GDP.

"These improvements are part of an agenda shared with our European and other international partners. They will help ensure that ONS continues to measure the UK economy to a high standard, as well as maintaining good comparability with other countries.”       

The overall package of improvements was described in an article published on 28 April. Further articles on 29 May described the impact on current price GDP from those improvements not related to new international standards(“ESA 2010”, for short), and on 10 June articles were published giving estimates of the impact on the level of current price GDP from the improvements due to the implementation of ESA 2010. On 30 June, articles described the impact of the changes on annual growth in the headline measure of GDP over the period 1997 to 2009. In addition, on 9 July an article was published detailing the impact of the changes on the Sector and Financial Accounts, as well as an article comparing the impact of the UK’s national accounts changes with those being implemented in other countries.

Annual figures for 2010 to 2012 GDP on a current price basis and quarterly figures for 1997 to 2012 on a real GDP basis will be published within the next few weeks.

Background notes

 

  1. The full article summarising the impact of ESA 1995 ESA 2010 changes on expenditure and income components is available here: http://www.ons.gov.uk/ons/rel/naa1-rd/national-accounts-articles/the-impact-on-gdp-expenditure-and-income-components-of-upcoming-improvements-to-national-accounts/index.html
  2. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. 
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