Concepts, definitions and classifications

The UNECE secretariat presents time series ready for immediate analysis. When appropriate, source segments with methodological differences have been linked, by concatenation or rescaling, to build long consistent time series.

 

The national accounts estimates are compiled according to the 1993 SNA (System of National Accounts 1993, Commission of the European Communities-Eurostat, International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations and World Bank, 1993) for all countries.

Important methodological improvements to national accounts of UNECE member countries are being implemented in the course of 2005-2006, in particular for European countries. These concern the allocation of FISIM (Financial Intermediation Services Indirectly Measured) to user sector/industries and the introduction of chain volume linking. The implementation date will however differ between countries; this will have an impact on the comparability of data across countries, on EU aggregates and UNECE regional aggregates, and in the availability of time series during the transition period.

 

Classification used: data by activity breakdown are presented in ISIC/NACE, the two classifications being identical down to the two-digit level (divisions). Data on GDP by activity are in the standard A6 structure (groups of sections). Data on GDP by expenditure are in the standard 1993 SNA classification of transactions in goods and services.

 

Constant price estimates are based on data compiled by the National Statistical Offices (NSOs) which reflect various specific national practices (different base years, fixed base, chain, etc.) explained in the country notes. To facilitate international comparisons, the data reported by the NSOs have been scaled to the current price value of 2005. As mentioned above, since early 2006, most UNECE countries moved to chain-linking to measure their national accounts aggregates in volume terms. Users who work with chained levels must be aware that chain-linking results in the loss of additivity of volume series for all years except for the reference year and the year following it. Non-additivity arises for purely mathematical reasons; the discrepancies should not be interpreted as indications of loss of quality

 

Common currency (US$) estimates are computed by the secretariat using purchasing power parities.

 

Purchasing power parity (PPP, NCU per US$), in broad terms, is the relative cost of the same representative basket of goods when valued at the domestic prices of two different countries. In other words, PPPs are the rates of currency conversion that equalise the purchasing power of different currencies. A PPP is similar to a consumer price index in that it compares an overall price level of two different economies. It is different, however, in that the two economies compared are separated in space rather than in time. PPPs are, therefore, currency converters in addition to being spatial price comparisons. When countries use a common currency, such as the fifteen countries of the euro area, and there is no need to convert to a common currency, PPPs are simply spatial price relatives.

 

PPPs, and not exchange rates, should be used in international comparisons of real income.

 

PPP series for the 27 EU countries, the EU candidate countries (Croatia, The former Yugoslav Republic of Macedonia and Turkey), three EFTA countries (Iceland, Norway and Switzerland), two other OECD members (United States and Canada), Albania, Bosnia and Herzegovina, Montenegro and Serbia, are based on the results of Eurostat/OECD comparisons programmes. Where relevant, these PPPs were converted by the secretariat into national currency units per US dollar (PPP for USA = 1). The secretariat has made projections using relative deflators of GDP for those countries for which  PPPs were not reported by Eurostat/OECD before 2005.

 

PPP series for Israel are those reported by the Central Bureau of Statistics of Israel.

 

PPP data for 2005 for the CIS countries are those published by the World Bank with the ICP 2005 global round results. PPP series for non-benchmark years are estimated by the secretariat using relative deflators of GDP.

 

Comparative price level of GDP (PPP/XR, per cent) is defined as the ratio of the purchasing power parity of GDP and the exchange rate for a given country, both measured in national currency per US$. It provides a measure of the over/undervaluation of the currency of a country: PPP equal to the exchange rate (comparative price level = 100) indicates that the national currency buys as much domestically as in the reference country (USA) when converted by the exchange rate. PPP above the exchange rate (comparative price level > 100) indicates the currency will buy more in the foreign market (when converted by the exchange rate) that it will domestically. The opposite is true if the comparative price level is lower than 100.

 

Regional aggregates are computed by the secretariat. Population and employment aggregates are sums of national series. Balance of current account aggregates are sums of national series converted into US$ using current exchange rates. For national accounts: all current price aggregates are sums of national series converted into US$ at current PPPs of GDP; all constant price aggregates are calculated by summing up national series scaled to the price level of the common reference year 2005 and then converted into US$ using 2005 PPPs of GDP. Regional aggregates of CPI are calculated as weighted averages of national series using fixed 2005 weights based on final consumption expenditure in US$ at 2005 PPPs. Unemployment rates are the ratios of unemployed persons to labour force in the region.

 

Population, as defined in the 1993 SNA, Population and Labour Input, consists of all persons, national or foreign, who are permanently settled in the economic territory of the country, even if they are temporarily absent from it. A person staying or intending to stay at least one year is considered to be settled on the territory. By convention, the total population includes neither foreign students nor members of foreign armed forces stationed in a country. Annual figures are annual averages.

 

Employment, as defined in the 1993 SNA, Population and Labour Input, includes all persons, employees and self-employed, engaged in some productive activity, for a resident employer (including self employers), that falls within the production boundary of the System.  The unit is headcount, not jobs. Annual figures are annual averages, not end-of-year or middle-of-year values. Exceptions are mentioned in the country notes.

 

Unemployment is the share of unemployed in the labour force (the total of employed and unemployed persons). Preference is given to LFS-based, as compared to registered unemployment rates. For those countries for which LFS-based rates are not available, registered unemployment rates are shown. The unemployment rates shown for the following countries are the comparable harmonized unemployment rates produced by the Statistical Office of the European Communities (Eurostat) and OECD: Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.