Calculation of growth rates

Definition and Content 

Growth rates are calculated on the basis of financial transactions. Monthly financial transactions are calculated from monthly differences in outstanding amounts adjusted for reclassifications, other revaluations, exchange rate variations and any other changes which do not arise from transactions. Thus, flow data reflect only those changes in stocks which arise from transactions, i.e. from the acquisition of financial assets or the incurring of financial liabilities. The flow data are used to produce an index of notional stocks for the monetary variables. This index measures changes in the money stock arising from financial transactions. The index of notional stocks is then further used to derive the monetary growth rates. Reclassifications and other statistical factors must be corrected for in flow statistics since failure to do so may easily jeopardise the comparability of successive observations. Simple comparison between the amounts outstanding before and after period would be misleading 1 

Method of calculation 

  1. The month-on-month percentage change tM for month t is calculated using of the following formulae: 


2. The annual growth rate t for month t - i.e. the change in the 12 months ending in month t - may be calculated using of the formulae: 



t M flow in month t is defined as

t M = (L t - L t-1) - C t M - E t M - V t M


t - the level outstanding at the end of month t

t M - the reclassification adjustment in month t

t M - the exchange rate adjustment in month t

t M - the revaluation adjustments in month t

3. Growth rates for intra-annual periods may be derived by adapting formula (b)



One example involving a change in the MFI reporting population may help to clarify this: following an identification of money market funds in the Czech Republic, from January 2004 these financial institutions previously defined as "other financial intermediaries" (and therefore excluded from the MFI sector) were reclassified as money market funds. In such a case, a simple comparison between the amounts outstanding of money market fund shares/units before and after January 2004 would be misleading. Consistency has been preserved by making a reclassification adjustment in January 2004.