Methodical annotations - Annual accounts

Revision of Annual National Accounts for the Years 1995 – 2023

In line with the national revision policy, the Statistical Office of the Slovak Republic conducted a revision of the annual national accounts in September 2024. This was a major benchmark revision of the entire time series. Such a revision is carried out in a harmonized manner across all EU member states. The revisions to individual transactions and indicators in the time series 1995–2023 took into account new information, studies conducted, recommendations from the European Commission, and precise source data. The Statistical Office made 32 methodological adjustments, most of which impacted GDP. The methodological adjustments with the greatest impact were:

The most significant effects were observed in adjustments for exhaustiveness (shadow economy), which included refined estimates for underestimated output and overestimated intermediate consumption, estimates for agricultural production for own final use, purchases without receipts, drug consumption, prostitution, and tips. These adjustments had an impact ranging from -0.4% to +1.38% on GDP.

Another significant adjustment was in estimates for housing services, where data from the 2021 Census of Houses and Flats and a new study by Infostat concerning rental prices were incorporated. This adjustment had an impact ranging from -1.08% to -0.12% on GDP.

The revision of the consumption of fixed capital calculated using the permanent inventory method (PIM) also had a notable impact on GDP. This revision stemmed from Eurostat's requirements to implement the recommendations of the relevant working group. The adjustment had an impact on GDP ranging from 0.13% to 0.45%.

Compared to the spring 2024 revision, the overall effect of the revisions in individual years ranged from -0.65% to +1.71% on GDP in both current prices and constant prices calculated through chain-linking of volumes.

In addition to the revisions mentioned above, the constant prices of chain-linked volumes were also affected by a change in the base year from 2015 to 2020, which led to more significant changes in volumes.

The revised annual national account data will be published on the website of the Statistical Office of the Slovak Republic and in the relevant databases on 18th of October 2024 and 21^st of October 2024.

The Statistical Office of the Slovak Republic plans to carry out the next revision of annual and quarterly national accounts in spring 2025.

The revision of annual national accounts for 2020-2023

In accordance with national revision policy, the Statistical Office of the SR revised annual national accounts in April 2024. Changes of individual transactions and indicators in time series 2020-2022, and the preliminary annual account for 2023, took into account new information and more accurate data and were mainly related to:

• updating data obtained from the statistical surveys and administrative data sources including conceptual adjustment’s based on the update data;
• the implementation of methodological changes in line with the results from spring EDP notification of the General Government Sector;
• incorporating of updated data for taxes less subsidies on products.

In comparison with the data published in autumn 2023, GDP at current prices and also at constant prices calculated by chain-linking of volumes for the revised years changed from - 0.01 to +0.55 %.

The revised annual national accounts data will be published on the website of the Statistical Office of the Slovak Republic and in the relevant databases on 19 of April 2024.

The next revision of annual and quarterly national accounts data will be carried out by the Statistical Office of the Slovak Republic in autumn 2024. It will be a benchmark revision, which is carried out once in 5 years. This means that the revision will be carried out over the entire time series from 1995 onwards.

The revision of annual national accounts for 2019-2022

In accordance with national revision policy, the Statistical Office of the Slovak Republic carried out the revision of annual national accounts. Changes of individual transactions and indicators in time series 2019-2021, including the preliminary annual account for 2022, took into account new information and more precise data sources and were mainly related to:

• updating data obtained from the statistical and administrative data sources and routine revision changes;
• the implementation of methodological changes in line with the results from autumn EDP notification of the General Government Sector;
• incorporating current data from the NBS Balance of Payments statistics on exports and imports of services.

Compared to the spring revision in 2023, the total impact of the revision in individual years ranged from -0.07% to +0.01% of GDP in both nominal and real terms. At the same time, the impact of the revision in individual years represents changes in the year-on-year development of GDP from -0.1 percentage point (p. b) to +0.1 p. b in constant prices.

The revised annual national accounts data will be published on the website of the Statistical Office of the Slovak Republic and also in relevant databases on 20 of October 2023.

The next revision of annual and quarterly national accounts data will be carried out by Statistical Office of the SR in spring 2024.

The revision of annual national accounts for 2010-2021

In accordance with national revision policy, the Statistical Office of the SR carried out the revision of annual national accounts. Changes of individual transactions and indicators in time series 2018-2020, including the preliminary annual account for 2021, took into account new information and more precised data sources and were mainly related to:

• updating data obtained from the statistical and administrative data sources and routine revision changes;
• the implementation of methodological changes in line with the results from autumn EDP notification of the General Government Sector;
• incorporating current data from the NBS balance of payments statistics on exports and imports of services.

In addition, the solutions of transversal reservations placed by the European Commission to all EU countries including the Slovak Republic at the end of the verification cycle for Gross National Income has been incorporated in the time series from 2010 onwards. GDP data have been affected by the incorporation of solutions to two reservations, namely solutions related to the estimates of margins on trading financial assets, and recording of daily allowances.

In comparison to autumn revision 2021 he total impact of the revision in individual years was ranged from +0.3 to +1.4 % of GDP at current prices and also at constant prices by chain-linking in volumes.

Due to the fact that the conversion into constant prices by chain-linked in volumes is performed as of the reference year 2015, the conversion of the affected indicators in current prices into the constant prices has been reflected in a whole time series since 1995.

The revised annual national accounts data will be published on the website of the Statistical Office of the Slovak Republic and also in relevant databases on 21 of October 2022.

The next revision of annual and quarterly national accounts data will be carried out by Statistical Office of the SR in spring 2023.

The revision of annual national accounts for 2010-2020

In accordance with National revision policy, the Statistical Office of the SR carried out the second revision of annual national accounts. In comparison with spring revision 2021 changes of individual transactions and indicators in time series 2017-2020 took into account new information and updated data sources and were related in particular to:

• updating data obtained from the statistical and administrative data sources and routine revision changes;
• the implementation of methodological changes in line with the results from autumn EDP notification of the General Government Sector;
• incorporating current data from the NBS balance of payments statistics on exports and imports of services.

In addition, the time series since 2010 has been incorporated by solutions of transaction specific and transversal reservations granted by the European Commission to the Slovak Republic after the end of the verification cycle for Gross National Income. GDP data have been affected by the incorporation of solutions to two reservations, namely solutions in the context of estimates:

• output, intermediate consumption and gross value added for sole traders in the household sector
• output produced for own-account gross fixed capital formation in the sector of non-financial corporation

In comparison to spring revision 2021 he total impact of the revision in individual years was ranged from -0.3 to +0.6 % of GDP at current prices and also at constant prices by chain-linking in volumes.

Due to the fact that the conversion into constant prices by chain-linked in volumes is performed as of the reference year 2015, the conversion of the affected indicators in current prices into the constant prices has been reflected in a whole time series since 1995.

Information on the revised annual national accounts data will be published on the website of the Statistical Office of the Slovak Republic and also in relevant databases on 21 of October 2021.

The next revision of annual and quarterly national accounts data will be carried out by Statistical Office of the SR in spring 2022.

The revision of annual national accounts for 2017-2019 including provisional annual account for 2020

In accordance with National revision policy, the Statistical Office of the SR carried out the first revision of annual national accounts in the 2017-2019 time series, including the provisional annual account for 2020. Revision changes of individual transactions and indicators took into account new information and updated data source and were related in particular to:

• updating data obtained from the statistical and administrative data sources and routine revision changes,
• the implementation of methodological changes in line with the results from spring EDP notification of the General Government Sector,
• updating of data on taxes and subsidies taken from administrative data source of Financial Administration of the SR.

The incorporation of revision changes in current prices and the impact of base effect from previous periods affected also the development of time series of data in chain-linked volumes.

The total impact of the revision in individual years was ranged from -0.1 to +0.4 % of GDP at current prices as well as at constant prices by chain-linking in volumes.

Information on the revised annual and subsequently quarterly national accounts data will be published on the website of the Statistical Office of the Slovak Republic and also in relevant databases on 30 of April 2021.

The next revision of annual and quarterly national accounts data will be carried out by Statistical Office of the SR in autumn 2021.

Revision of annual national accounts for the years 2010 - 2019

In accordance with the national revision policy valid from the 1st of January 2020, the Statistical Office of the Slovak Republic carried out the second (autumn) revision of annual national accounts in 2020. The revision adjustments of individual transactions and indicators in the time series 2016 - 2019 took into account a new information and more precise data source and were related to:

• updating data obtained from the statistical and administrative data sources and routine revision changes,
• the implementation of methodological changes resulting from the autumn EDP notification in General Government Sector,
• incorporating of the latest data from the balance of payments statistics on exports and imports of services of National Bank of Slovakia in time series 2018 onwards

In addition, since 2010 we have incorporated in the whole time series the solution of the transaction specific reservation concerning the sector classification granted by the European Commission to the Slovak Republic after the end of the verification cycle for Gross National Income.

Due to the fact that the conversion into constant prices by chain-linked in volumes is performed as of the reference year 2015, the conversion of the affected indicators in current prices into the constant prices has been reflected in a whole time series since 1995.

The total impact of the revision in individual years was ranged from -0.2 to +0.2% of GDP at current prices as well as at constant prices by chain-linking in volumes.

Information on revised annual and quarterly national accounts data will be published on the website of the Statistical Office of the Slovak Republic and in the relevant databases on 30.10.2020 at 9,00 a.m.

The next revision of annual and quarterly national accounts data is planned by the Statistical Office of the Slovak Republic on spring of 2021.

The revision of annual national accounts for 2016-2018 including provisional annual account for 2019

In accordance with National revision policy in force since from January 2020, the Statistical Office of the SR carried out the first revision of annual national accounts in the 2016-2018 time series, including the provisional annual account for 2019. Revision changes of individual transactions and indicators took into account new information and updated data source and were related in particular to:

• the implementation of methodological changes in line with the results from spring EDP notification of the General Government Sector;
• incorporating the definitive data based on Balance of Payments statistics from NCB;
• updating the Foreign Trade Statistics data for the import and export of goods;
• updating of data on taxes and subsidies taken from administrative data source of Financial Administration of the SR.

The incorporation of revision changes in current prices and the impact of base effect from previous periods affected also the development of time series of data in chain-linked volumes.

Information on the revised annual and subsequently quarterly national accounts data will be gradually published on the website of the Statistical Office of the Slovak Republic and also in relevant databases from 30 of April.2020 to 7 of May 2020

The next revision of annual and quarterly national accounts data will be carried out by Statistical Office of the SR in autumn 2020.

The revision of annual national accounts for 1995 – 2017 including the provisional year 2018

In accordance with the Harmonized European Revision Policy for Macroeconomic Statistics and National Revision Policy the Statistical Office of the Slovak Republic (SO SR) carried out in 2019 a major benchmark revision of national accounts data for 1995-2017, including the provisional year 2018. The aim of this large revision was to update the information from data sources and methodological clarifications for calculation of particular national accounts indicators.

The biggest impact on GDP had the updating of new data sources in:

• household sector, where the SO SR used the data from administrative data sources for units classified under institutional sector of households. The main aim of using this administrative source was to reduce the burden of reporting units,
• non-observed economy estimate, where the SO SR clarified the data on the basis of information from supplementary sources and information based on the cooperation with the Financial Administration of the Slovak Republic,
• estimate for dwelling services, where the SO SR used the information from updated Infostat study,
• own-account construction production estimate, where the SO SR combined the information about the real estate prices and available statistical surveys,
• household expenditures on energy estimate, where the SO SR took into account the information from the industrial statistics on energy consumption in measuring units,
• household expenditures on health estimate, where the SO SR used the more precise data from the National Health Information Centre,
• revision of foreign trade statistics for 2010-2018, in which the SO SR updated the methodology of the calculation of import and export of goods on natural gas, electricity, vessels and airplanes. The detailed information about the foreign trade statistics can be found on the SO SR website, and in the related press release.

As a part of this revision, also adjustments were related to:

• methodological clarification of data related to economic activity of non-resident units (registered on Slovak territory only for VAT purposes),
• routine revision changes in 2016 and 2017 due to recording of final data and updated information taken from the balance of payments statistics of the National Bank of Slovakia and from enterprise statistics,
• the change of base year from 2010 to 2015 at constant prices calculation by chain linking in volumes.

The overall impact of major benchmark revision on GDP is in the range between -1.0 and 0.6 at current prices; and in the range between -1.0 and 0.7 at constant prices by chain linked volumes.

The information on revised data of macroeconomic indicators will be gradually released on the website of SO SR and in relevant databases as from 8 October 2019.

Revision of annual national accounts the years of 2015 - 2016 including preliminary annual account for 2017

Statistical Office of the Slovak Republic carried out in 2018 the regular revision of data in the system of national accounts. Adjustments were performed in individual items of national accounts in the time series 2015-2016, including preliminary data of 2017 due to incorporation of a routine adjustments in the relevant transactions and variables based on new information and specified source data.

Revision of annual national accounts the years of 2014 - 2015 including preliminary annual account for 2016

Statistical Office of the Slovak Republic carried out in 2017 the regular revision of data in the system of national accounts. Adjustments were performed in individual items of national accounts in the time series 2014-2015, including preliminary data of 2016 due to incorporation of a routine adjustments in the relevant transactions and variables based on new information and specified source data.

Revision of annual national accounts the years of 1995 - 2014 including preliminary annual account for 2015

Statistical Office of the Slovak Republic carried out in 2016 regular revision of data in the system of national accounts. Adjustments were made in individual items of national accounts in the time series 1995-2014, including preliminary data of 2015 due to:

• Incorporation of a rutine adjustments in the relevant transactions and variables based on new information and specified source data,
• Sector reclassification of units according to ESA 2010,
• Incorporation of information from the new data source relevant to household final consumption calculation for reference year from 2014 onwards,
• Incorporation of estimates of individual items of GDP both in the previous year´s prices and chain-linked volumes for the years 1995 and 1996

Methodical annotations - Supply and use tables

Supply and use tables (SUT) by commodities and industries in the SR are an integral part of the system of national accounts. The compilation procedure for SUT is based on the „European system of national and regional accounts 2010“ methodology (ESA 2010). Their task is to complete the framework of national accounts system by describing the flows of goods and services in the domectic economy, their exchange with the rest of the world and their use by all resident units during the given period. They are compiled annually to validate the final annual national accounts data at the period of T+36 months.

Formally the supply and use tables have the shape of a matrix. In columns the national version of the Statistical classification of economic activities (SK NACE rev.2) is used, representing the structure of economy by the principal activity of resident units. Commodities defined by the Statistical classification of products by activity (CPA 2015) are shown in the rows.

The supply tables shows the supplies of goods and services distinguishing between domestic output and imports. The output matrix is valued at basic prices. The vector of imports is valued at CIF prices.

The use table showing the use of goods and services consists of three quadrants:

• The first quadrant is formed by the matrix of intermediate consumption which displays inputs into the production process in the same structure as the supply table.
• The second quadrant is defined as the final uses and includes the column vectors of the final consumption of households, final consumption of general government and non-profit institutions serving households, gross fixed capital formation, changes in inventories and valuables and exports of goods and services. The use table is valued at purchasers´ prices.
• The third quadrant is formed by the table showing the value added. It is broken down into compensation of employees, taxes on production, subsidies on production, gross operating surplus, consump¬tion of fixed capital and net operating surplus and mixed income. Data are displayed by industries A*88 of SK NACE Rev.2.

Definitions of indicators in the supply and use tables match with those in the system of national accounts. Commodity flows are expressed in the prices at which the transactions are actually being done. Due to the different valuation of resources and uses, these data must be transformed using the conversion table from the basic into the purchasers´ prices. It contains columns showing trade and transport margins, taxes and subsidies on products and imports taxes. Value added tax is presented in the separate column

The tables are presented in the current prices in thousands of Euros.

Methodical annotations - Symmetric input-output tables

Symmetric input-output tables (SIOT) describe in more detail the production process and transactions with goods and services related to the domestic output and imports. They are based on SUT data, which are transformed from commodity-industry structure into the commodity-commodity structure. Process of transformation from SUT to SIOT is based on the assumption of a product (commodity) technology which means that each product is produced in a specific way, irrespective of the industry where it is produced.

The framework of input-output tables consists of 3 tables:

• use table for domestic output and imports - at basic prices
• use table separately for domestic output - at basic prices
• use table separately for imports - at basic prices

SIOT are compiled every 5 years at the period of T+36 months.

The tables are presented in the current prices in thousands of Euros.

Methodical annotations - Regional Accounts

Revision of regional accounts for the years 1995 - 2017, including the preliminary annual account for 2018

In 2019, the Statistical Office of the SR carried out a large benchmark revision of data in the system of national accounts in the time series since 1995-2017, including the preliminary annual account for year 2018. The aim of the major revision was to incorporate information from updated data sources and methodological clarification the compilation of specific national accounts indicators (see methodological explanatory notes - annual accounts - linking up).
Subsequently, these adjustments of the benchmark revision were incorporated in the individual items of the regional national accounts indicators.

Legend for tables

The methodology for compiling Regional gross domestic product and indicators of regional accounts is based on the European system of national and regional accounts (ESA2010), chapter 13 Regional Accounts.

Gross domestic product (GDP) for the European comparison purpose is expressed in purchasing power parity (Purchasing Power Standard - PPS). Purchasing power standard takes into account the different levels of purchasing power not only exchange coefficient between the national currency and the euro. The basis for the calculation of purchasing power parity is European comparison program (European Comparison Programme - ECP), where the national statistical offices participate on, including SO SR.

Regional Gross domestic product and Regional Accounts indicators are compiled in ESA2010 methodology in accordance with the time series of national accounts for the years 1995 - 2017 including preliminary data of 2018. Data provider for agregate Regional GDP and Regional GDP per capita in PPS is Eurostat (EU 28 = 100 countries belonging to EU). SOSR allocates aggregated regional data to sector level in the structure of NACE Rev. 2. The regional level is determined on the basis of principles based on the NUTS (Nomenclature of The territorial units for statistics - Classification of Territorial Units for Statistics). NUTS 2 level in SR consists from four regions and NUTS 3 area consists from 8 regions.

Definitions

Gross domestic product in market prices is a final result of the production activity of resident producer units created during the current period. Regional GDP is calculated as the sum of values added by industries for each single region, and taxes on products less subsidies on products as a share GVA by region. For international comparison, the Regional Gross domestic product is expressed in purchasing power. Calculation of Purchasing Power Parity (Purchasing Power Standard) is based on prices and sales volumes of goods that are comparable and representative for the countries, which are included in comparison. Purchasing Power Parity eliminates effects of different price levels between countries.

Regional Gross domestic product per capita is a share of two indicators based on different principles - Regional Gross domestic product (in which the criteria by the place of work is considered) and the average number of people residing permanently in the region (based on the principle of residence).

Gross value added at basic prices is calculated as the difference between output at basic prices and intermediate consumption at purchasers' prices. Output consists from products manufactured during the current financial year and intermediate consumption consists of the value of goods and services consumed in the production process as inputs, excluding fixed assets whose consumption is expressed as consumption of fixed capital. The compilation process of Regional Gross value added consists of several steps. Basic approach is based on individual calculation of Gross value added by industry (section NACE Rev.2.) in the single region (NUTS 3). In process of calculation the approach for regionalization is used "bottom - up" and so- called "combined approach ".

Gross fixed capital formation includes the acquisition of fixed assets les s disposals (sales) of fixed assets by producers - residents during a given period. Included are also increases of the value of certain non-produced assets realized by production activity of institutional units. Fixed assets are tangible as well as intangible assets that have been produced as output in manufacturing process and will be used in other production processes repeatedly or continuously for more than one year. Regional Gross capital formation is constructed as the sum of Gross capital formation by industry in the region. Similarly as in case of GVA the approach for regionalization is used "bottom - up" and so- called "combined approach ".

Balance of primary income - net - primary income is characterizing an ability of resident households generate income either as unincorporated enterprises, employees or recipients of property income in the region where households reside or in other regions of the country or outside the country.

Net Disposable income – net disposable income is characterizing the outcome of major transactions relating to the household sector (production activities, distribution and redistribution of income and other transactions) between single regions.

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Purchasing power parity

Purchasing power parity (PPP) is an important economic factor that makes it possible to compare the economic power of one country (region) against another country (region) or group of countries (regions). It can also be understood as a price index, which links the price differences of goods and services at a given moment in different countries (regions). It also serves as a criterion for claiming funding for development programs from the EU Structural Funds.

When determining PPP, the so-called Purchasing Power Standard (PPS), is determined as well. PPS is also used as an alternative exchange rate for the currencies of individual countries, taking into account the different price levels of goods and services in those countries. It expresses how many monetary units of a country's currency are needed to purchase a good or service with an average price of 1 Euro. The specific use of PPS for selected countries is shown in the following .Eurostat table.

The obligation of EU member states to provide all necessary data for the needs of the PPP survey follows from the Regulation of the European Parliament and the Council (EC) no. 1445/2007. Binding methodological procedures for determining PPP are described in Eurostat-OECD Methodological Manual on PPP.

Price level comparison

The comparison of price level indices allows a general statement of how "expensive" or "cheap" one country is in relation to another country (group of countries).

A comparison of price level indices (PLI) is calculated for each country as the ratio of purchasing power parity (PPP) to exchange rate (XR) relative to another country or group average (eg EU-27). If the PLI is greater than 100, then the country in question is "more expensive" compared to another country or group of countries; if the PLI is less than 100, that country is "cheaper" compared to another country or group of countries.

Slovakia (through the SOSR) as a member of the EU participates in the European Comparison Program (ECP) through an EU grant funding in the field of economic governance and economic and social performance under European statistics - Single Market Program (SMP-ESS).

More information on Purchasing Power Parity can be found on the Eurostat website in the dedicated section on PPP.

Contact
Jozef Rosík
Štatistický úrad SR
Lamačská cesta 3/C
840 05 Bratislava 45
e-mail: jozef.rosik@statistics.sk

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