GDP and main figures

The survey of the national economy is measured in both current and constant prices. A key figure is gross domestic product, GDP.

GDP measures the monetary value of the production of goods and services in a certain period of time. The production includes the use of materials, labor and capital equipment, and the product of these factors are goods and services.

Nominal GDP

Nominal GDP means that GDP is measured in the current market prices in a given period of time.

Gross value added (GVA) is GDP in basic prices and is measured in each industry and sector as the production value minus intermediate consumption at purchaser prices. As for the national economy, GVA can also be measured as nominal GDP minus net product tax.

Gross factor income (GFI) is GDP in factor prices and is measured as GVA minus other net production taxes. The GFI is the share of the contribution to gross value added in the production, that is used in paying the factors of production, wages for the workers and operating surplus for the domestic institutional entities.

Real GDP – real economic growth

GDP and GVA can also be measured in constant prices, to show the changes in volume. This way the price changes have no influence on the GDP.

The real GDP is a measurement of the real economic growth.

The source of GDP and key figures

The source to measure the production value are all sorts of numbers from society. The production value is the value of goods and services from market production, production for own use and other non-market production.

Production is not the same as goods sold. For example, the production value of a firm not the same amount as the amount the firm has sold, but instead the amount sold minus the cost of the items sold, also known as gross proceeds.

In public administration and other non-market production is the production value measured as the cost of production, which is the consumption of production + wages + production taxes + depreciation.

All these numbers are included in a calculation which gives us the best picture of the economic state of the country in a given period of time. In addition is also shows when changes appear in one period to the next. Among other things do the key figures show, when the economy is experiencing recessions and when there is an economic upturn.

The main source used in the making of GDP in the Faroe Island are the accounts, that describe a past period. Therefore, do these numbers not describe the economic situation in the country right now, but with the combined use these measures and other statistics is it possible to make statements about the economic situation.

The national economy can be read though industrial sectors and institutional sectors.

Definitions:

Current prices are the market prices that are available in the given period.
Gross operating surplus is GVA, when wages, attached fees and production taxes are deducted.
EA are the 19 nations, that use the euro (EA19, June 2020)

EU are the 27 nations in the European union (EU27, June 2020)
Factor prices are basic prices without production taxes (e.g., road charge and property tax) and other production subsidies. The contribution to gross value added in factor prices is the value that is shared by wages and operating surplus.
Constant prices are a measurement for the value that is measured (……Manglar…)
The factors of productions are labor, capital equipment and resources.
Market price is the price at which the good or service is sold, when industry- and import taxes are included, but not subsidies.

Real economic growth is the annual change in GDP in constant prices. The price changes are deducted.
Chained values are a macroeconomic assessment of the volume of goods and services, where the weighting basis changes and is based on prices from the previous year. The previous year is chain-linked to the base year, but the reference year remains unchanged.
Institutional entities will be grouped in sectors depending on whether they have similar economic behavior. This is determined based on production type, main activities, main task and financing. The main sectors are non-financial corporations, financial corporations, public administration and services, households, organizations and foreign countries.
The basic prices are market prices including subsidies but excluding the taxes. The basic price is the value that is allocated to the producer.
The contribution to gross value added is the production value in basic prices minus consumption in the production in buyers’ prices.

The indicators describe the annual percentage change, with a base year which is 100. The difference in two years is measured in percentages. When comparing with the base year, is the difference measured in per cent.

Survey of the National economy in constant prices is produced from 2010 chained prices.