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 year’s average prices and at constant prices of 1995 (calculated by chain-linking) for the period of the first quarter of 2004 to the third quarter of 2005. The data are shown 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 September 2005, the preliminary quarterly GDP estimates of all quarters of 2004 and of the first and second quarters of 2005 were revised. The indicators were revised especially with respect to the reconciliation with the preliminary version of the 2004 annual national accounts that was released 30 September 2005. The further reason for the revision was updated data from quarterly statistical surveys of entrepreneurs for both the first and the second quarters of 2005 processing of November 2005. The balances of payments for both the first and the second quarters of 2005 have changed, too, especially in trade balance.

Available for users at the websitehttp://www.czso.cz/csu/czso/hdp_tsare 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 third 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 third 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 third quarter of 2005). For the first time, the time series of the final consumption expenditure of households by durability are published, namely for the same period (from the first quarter of 2003 to the third quarter of 2005) and at both current prices and previous year’s average prices.

The publication also shows revised quarterly accounts for the households sector for the period of the first quarter of 2004 to the third 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 till March 2004 to make estimates by converting the time series into the base year’s prices directly, 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 (i.e. the year for which figures at current prices equal to figures at constant prices, 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 coefficients (i.e. indices expressed in % / 100). 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 coefficients of physical volume.

1. 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.
2. 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 at purchaser’s prices (compensation of employees, other taxes on production minus other 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 employing natural persons (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).


Methodological note on the breakdown of the final consumption expenditure of households by durability

The final consumption expenditure of households is split according to the „CZ – COICOP (99)“ which is the classification of individual consumption by purpose. When compiling quarterly national accounts, classification of 46 groups is used (narcotics are not included).

As to durability, final consumption expenditure of households is divided into three groups: durable goods, non-durable goods and services. The difference between non-durable and durable goods is based on the fact, whether the goods can be used only once or whether the goods can be used repeatedly or continuously for the period far longer than 1 year. When compiling annual national accounts, classification of 198 classes is used (52 classes for durable goods, 81 classes for non-durable goods and 65 classes for services). Furthermore, durable goods (e.g. motor vehicles, refrigerators, washing-machines, televisions) have substantially higher purchasing prices. Some COICOP classes contain both kinds of goods and services, too. Such classes are classified according to the prevailing type of the final consumption expenditure of households. For quarterly national accounts, the annual structure is used for groups of expenditure that are not directly as a whole classifiable into 3 types of expenditure according to durability.



GDP estimate for the fourth quarter of 2005 will be released on 9 March 2006.