Gross domestic product

Gross domestic product (GDP) includes the value of all goods and services produced in an economic area during a specific period of time. It is defined as an aggregate measure of production equal to the sum of the gross values added of all resident, institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs). Gross value added (GVA), which is valued at basic prices, for each economic branch results from the gross production value at basic prices minus intermediate consumption at purchaser prices.

Labour productivity describes  the ratio of price-adjusted economic output (GDP, GVA) to labour input. Labour input is measured in hours worked or in number of persons employed. Due to modern employment practices (e.g. part-time work), putting economic output in relation to hours worked yields the more accurate measure of productivity.

Unit labour costs describe the relation of labour costs (compensation of employees per employee [person concept] or compensation of employees per hour worked [hour concept]) to labour productivity (gross domestic product – price-adjusted and chain-linked – per employee [person concept] or per hour worked [hour concept]).

Gross fixed capital formation includes the purchase of permanent and reproducible fixed assets as well as created fixed assets and larger, value increasing repairs. Fixed assets are classified as permanent if they have a useful life of at least one year. Gross fixed capital formation is comprised of the acquisition of new assets and the balance of purchases and sales of used assets.

New fixed assets are subdivided in machinery and equipment, other assets and constructions. Machinery and equipment includes machines, mechanical plants, operating and business equipment, vehicles as well as similar assets which are not firmly attached to the constructions. Other assets comprise investments in intangible fixed assets (e.g. software and copyrights), livestock and crops as well as costs of transfer of undeveloped land. In the publication, the results on these other assets are pooled together with new equipment. Apart from residential and non-residential buildings, the term constructions also includes other constructions (roads, bridges, airports, canals and the like) and installations which are firmly attached to the constructions, for instance elevators, heating, ventilation and air conditioning systems, gardens and fences.

Private consumption describes the domestic private households’ purchases of goods and services for consumption purposes. Apart from the actual purchases, which include among others compensation for domestic services, private consumption also includes certain assumed purchases, such as the acquisition of financial intermediation services, indirectly measured (FISIM), the value of usage of owner-occupied dwelling and payments in kind. Consumption of private non-profit organisations are also included in private consumption.

Consumption expenditure by general government are equal to the value of goods produced by the state (excluding created assets and sales) plus expenditure on goods which are provided to private households in the form of social transfers.

Domestic demand is equal to the sum of private consumption, state consumption and gross fixed capital formation.

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