GDP by Income & Expenditure Approach – Basic Price GDP Declined in Real terms by 1.73% in Q4’16

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Key Highlights:

  • In real terms year on year growth in GDP declined by 2.34% and 1.73%, in the third and fourth quarter respectively. Continuing the negative growth trend from the first half of 2016.
  • Both household consumption and government consumption expenditures contributed to the fall in the third and fourth quarters, however a strong recovery in growth in net exports, particularly in the fourth quarter helped to stem the decline.
  • National Disposable Income recorded a strong growth in comparison to the GDP in the second half of 2016 in real terms. This is partly as a result of increases in “other net transfers from the rest of the world’. 
  • Year on year growth in domestic Compensation of Employees declined in real terms. Operating surplus declined in the third and fourth quarters but grew overall in real terms in 2016.

The Gross Domestic Product (GDP) can be derived as the value of all goods and services available for final uses and export. GDP at market prices includes net taxes on products; this is subtracted to obtain basic price GDP. The expenditure approach measures the final uses of the produced output as the sum of Final consumption, Gross Capital Formation and Exports less Imports, which are considered in turn in this chapter. Consumption of fixed capital—a measure of depreciation of assets—comprises the difference between Gross Domestic Product (GDP) and Net Domestic Product (NDP) and is also considered in this chapter.

Basic price GDP declined in real terms by 2.34% and 1.73% the third and fourth quarters of 2016 respectively, considerably lower than the growth rates of 2.84% and 2.11% that were recorded in the same quarters of 2015. Market price GDP declined at a similar rate in the third quarter at 2.38%, and a slightly slower rate1.63% in the fourth quarter as a result of faster growth in Net taxes in the fourth quarter.

Household Final Consumption Expenditure:

This consists of expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services. This is calculated as a residual.

General Government Final Consumption Expenditure:
This consists of expenditure, including imputed expenditure, incurred by government at all levels on both individual and collective consumption goods and services. Individual consumption items are those that are provided to individual households, such as education and health services. Collective consumption items relate to
goods and services utilised by society as a whole, such as security and infrastructure.

Not for Profit Institutions Serving Households Final Consumption Expenditure:

This consists of expenditure, including imputed expenditure, incurred by Not-for-Profit-Institutions Serving Households, which consist of organisations such as charities and non-government organisations.

Gross Fixed Capital Formation:
This is measured as the total value of producer’s acquisitions, less disposals, of fixed assets during the accounting period, plus certain additions to the value of non-produced assets (such as improvements to natural assets) realised by the productive activity of institutional units.

Change in Inventories is the consist of changes in; stocks of outputs that are still held by units that produced them prior to their being further processed , sold, delivered to other units or used in other ways, measure by the value of the entries into inventories less the value of withdrawals and the value of any recurrent losses of goods held in inventories.

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