Revisions to the expenditure components of GDP
Upon the release of the national accounts data for 2009 Q4 the CZSO also revised the figures for GDP and its expenditure components for 2009 Q1–Q3. Although overall annual GDP growth for this period was not changed significantly, larger revisions can be seen in the individual expenditure components of GDP (see Table 1).
Table 1 (Box) Revisions of GDP components
Gross capital formation was increased the most
(differences in contributions to annual real GDP growth in percentage points unless otherwise indicated)
|2009 Q1||2009 Q2||2009 Q3|
|Difference (p.p.)||Difference (p.p.)||Difference (p.p.)|
|Gross capital formation||4.1||5.9||8.2|
|Exports of goods and services||0.1||0.0||0.4|
|Imports of goods and services||-0.2||0.7||2.6|
|Net exports of goods and services (CZK billions)||1.7||-5.7||-16.7|
Within the expenditure components, gross capital formation underwent the largest revision. Total investment growth was revised upwards and its contribution to GDP growth changed by 1–2 percentage points (see Chart 1). This shift was due chiefly to additions to inventories; by contrast, fixed investment was lowered. The CZSO did not give reasons for the revision of the historical data on gross investment or comment on it in any detail. However, inventories were probably to a large extent a “balancing” item for the opposite changes in items described below.
Household consumption was also revised. Its contribution to annual GDP growth in the aforementioned period was reduced by approximately 0.7–0.9 percentage point. The CZSO announced a methodological change relating to the measurement of these data in the national accounts. The data on consumption were previously estimated primarily on the basis of the Household Budget Survey (HBS), a survey of the consumption behaviour of Czech households. According to the CZSO, certain discrepancies had been observed recently between the statistics on consumption of retail goods obtained from the HBS and the data on retail sales. During the recession, retail sales had recorded a larger decline than that indicated by the HBS. The CZSO therefore decided to increase the weight of the retail sales statistics in the estimate of household consumption and revised the historical time series of household consumption downwards for the whole of 2009.
A revision having a significant impact on the contribution to GDP growth was also made for imports, which were revised upwards on average. The effect of the revision was most visible in the contribution of net exports to GDP growth in Q2 and Q3. This contribution declined by roughly 0.5 and 1.5 percentage points respectively. The CZSO explained the revision to imports mainly in terms of a methodological change to the measurement of services imports.
This change was related mainly to growth in expenditures under other services, primarily as a result of an increase in branding, i.e. trade operations of multinational corporations connected with increasing the value of goods imported into the Czech Republic and subsequently re-exported. This item basically takes into account price differences in foreign trade turnover stemming from intra-company cross-border operations of multinational corporations.
The CZSO also published revised data on government consumption (whose growth was revised downwards on average). However, this did not cause any major change to the contribution of government consumption to GDP growth.