The sorting of the economy in the survey of the National economy has among other things the objective to illustrate the functional distribution (see industrial sectors) and the distribution of institutional entities in institutional sectors, where the economic activity is critical for determining the correct place within the institutional sectors. The economic activity is determined by whether the goods and services produced are for the market. It is also determined by the type of production, where two types are the production of financial services or other production.
The institutional entities is grouped in 5 domestic institutional sectors.
Non-financial companies are all entities that produce goods and non-financial services to a market. This institutional sector includes both privately owned companies and companies owned by the government.
Financial companies are all entities that produce financial services to a market, such as financial institutions, insurance companies and pension funds. This institutional sector includes both privately owned companies and companies owned by the government.
Public administration and services are entities owned by the government, that produce services for individual and common use outside of a market.
The household produces goods and services to the market and for own use. The consumers are generally salary earners, receivers of financial aid. Independent businesses are grouped as household if they are not a financial entity. All production that is for own use is also a part of this sector.
Organizations are entities, that produce for individual use, outside of a market with no financial purpose. These organizations are sports clubs and other leisure organizations apart from the church.
These sectors combined make up the Faroese economy. The economic entities that the domestic economic entities trade with, and whose main activity is not in the Faroe Islands are grouped into ’outside world’ which is its own sector. All accounts in survey of the National economy contain this sorting of sectors, and the gross value added is among other things sorted onto these sectors.
Current prices are the market prices that are available in the given period.
Gross domestic product that is measured in current prices, is a measurement for the total value created in a period.
Gross value added is the gross domestic product in base prices. This is measured in each sector as production value in base prices minus the consumption in the production in purchaser prices. For the whole economy can the gross value be added also be measured as GDP in current prices with the commodity tax subtracted.
Institutional sectors are a combination of entities and are grouped according to economic activity determined by type of production, main activity, main task, and financing. The main institutional sectors in the domestic economic field are mentioned below. ”Outside world” is a sector on its own.
Net commodity taxes are transfers from domestic producers to public administration and services like taxes and duties, that are linked to the good or service, for example VAT or duties.