Quarterly National Accounts of the CR

Introductory note

Contents

The publication presents quarterly estimates of GDP and other indicators of national accounts at current prices, at previous years’ average prices and at constant prices of 1995 (calculated by chain-linking) for the first and second quarters of 2005. The data are both raw and seasonally adjusted (including the correction of a different number of working days in individual periods).

In comparison with the data published on 9 June 2005, the preliminary quarterly GDP estimates of the first quarter of 2005 were revised. The indicators were revised especially with respect to the updated data from quarterly statistical surveys of entrepreneurs for the first quarter of 2005 processing of August 2005 and the updated balance of payments for the first quarter of 2005 in which both trade balance and balance of services changed.

Available for users at the website http://www.czso.cz/csu/czso/hdp_ts are quarterly time series of GDP expenditures and gross value added by the kind of activity (including indices and deflators) for the period from the first quarter of 1995 to the second quarter of 2005. At this website there is also the time series of real gross domestic income for the period from the first quarter of 1996 to the second quarter of 2005. Further quarterly time series (GDP by income approach, employment and wages by industry and gross fixed capital formation by type of goods) are placed at the same website but they are shorter (for the period from the first quarter of 2003 to the second quarter of 2005).

The publication also shows quarterly accounts for the households sector for the first and second quarter of 2005 at current prices, not seasonally adjusted.

Methodological note on the constant prices data calculation:

The methodology of converting quarterly national accounts data from current prices into constant prices was harmonized with the procedure used in annual national accounts. Unlike the approach used last time to make estimates for the quarters of 2003 by converting the time series into the base year’s prices directly (so far the year 1995), a modified approach is taken: the indicators are converted first into the previous year’s average prices (the previous year is always the basic year, the base is thus changed every year). Consequently, the year-on-year index is independent of the choice of reference year (the year 1995 in our case) and is far less biased by the gradual out-of-dating of the chosen basic year’s weights. The chain-linking of data at the previous year’s average prices into reference year prices is provided by means of annual average price indices. The publication includes the data at current prices, at previous year’s average prices and at constant prices of 1995. The time series at 1995 constant prices were obtained by means of chain-linked y-o-y indices of physical volume.

a) Comments to the data at the previous year’s average prices:
These data were obtained from the data at current prices by deflating with the price indices “the previous year’s average = 100”. It follows that price bases in individual years differ and quarterly data are comparable only in the frame of one year. Aggregates are additive, they are obtained as sums of appropriate individual items at the previous year’s average prices. E.g. the total final consumption expenditure at the previous year’s average prices is equal to household final consumption expenditure + government institutions final consumption expenditure + NPISH final consumption expenditure that were separately deflated by various methods into the previous year’s average prices.

b) Comments to the data at the constant prices of 1995:
These data were obtained by chain-linking from the data at the previous year’s average prices. The chain-linking includes compiling long-term price indices and volume indices by means of the same short-term characteristics based on different and actual weights. E.g., the volume index of the particular indicator between 2004 and 1995 years is calculated as a product of individual year-on-year volume indices for the whole period 1995-2004. As a result of using this method of chain-linking (annual overlap technique which is one of methods recommended by Eurostat) aggregates are not additive. It means that values of aggregates at constant prices do not agree with sums of individual components at the same constant prices.

Methodological note on seasonal adjustment:

The publication includes current price and 1995 constant price values of GDP and GDP components, as they were produced and used, which are adjusted for seasonal variation. The seasonal adjustment is carried out with the help of the TRAMO/SEATS method, which consists in decomposing the time series into trend, cyclical, seasonal and irregular components. The seasonal component is excluded and the remaining three are put together to make up a seasonally adjusted time series. The seasonally adjusted time series are retrospectively recalculated every quarter with regard to extension and revision of the original, non-adjusted time series. A correction for the influence of a different number of working days in individual periods was performed on selected time series in which this influence is significant statistically. Since a number of working days influences annual figures, too, annual totals of seasonally adjusted values do not correspond to those of the original, non-adjusted values in the series.

Methodological note on the income approach

In the Czech national accounts, the income approach to estimating GDP cannot be considered as an independent method because operating surplus and mixed income are not calculated separately. They are obtained in the form of balancing items between gross value added obtained by production approach (balanced with expenditure approach) and other income components of gross value added (compensation of employees, taxes on production minus subsidies on production).


Methodological note on employment

The data on the number of employees and total employment (employees plus self-employed persons) refer to numbers of persons with main job, the main job being either the only job of a person or, if a person is a multiple-job holder, a job in which such a person worked most hours.

The number of employees with main job is derived from the number of jobs those also include second jobs by applying a correction coefficient for employees. The coefficient is defined as the ratio of the number of employees with the main job and the total number of jobs. This coefficient has been taken over from annual national accounts (for quarters of the year for which annual national accounts have not been compiled yet, data from the latest annual national accounts are used). Needed input data on employees for national accounts are obtained from annual structure surveys on employees and the self-employed, expert estimates and calculations.

The self-employed with main job include all employers (i.e. the entrepreneurs with at least one employee), entrepreneurs without employees and unpaid family workers who work for the enterprise of their family member regularly and their work is not their second job. Their number is derived from the number of all jobs (main + second) reduced by a correction coefficient for the self-employed (the ratio of the number of the self-employed with main job and the total number of jobs of the self-employed. This coefficient is also taken over from annual national accounts.

Calculations (including calculations of correction coefficients as are described above) are realised separately for every industry (on the level of 2-digit OKEC).


GDP estimate for the third quarter of 2005 is to be released on 9 December 2005 consistently with the time schedule of national accounts releases which is situated at the CZSO web site http://www.czso.cz/eng/redakce.nsf/i/deadlines_for_the_national_accounts_releases_in_2005