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The sector accounts provide an overview of the activities and the development of the Danish economy. They contain key indicators such as the gross value added (GDP) and figures for private consumption, investments, exports and imports, earnings and property incomes as well as the profit in six main sectors (non-financial corporations, financial corporations, general government, households, non-profit institutions serving households (NPISH) and the external sector) and productivity in the industries. They also include figures for the many sub-classifications, which facilitates analysis of various cross-sections of the national economy.
The compilation of National Accounts in 2020 and 2021 is affected by additional uncertainty in the context of the Covid-19 pandemic. This is especially true in the first compilations where source material is scarce. As more information becomes available, the National Accounts will be updated. Read more (only available in Danish) at www.dst.dk/Nationalregnskab
The purpose of the institutional grouping is to clarify the economic behavior. Consequently, the units that are legally competent to transact business, typically enterprises, are at the core of the grouping into sectors.
The set of statistics for institutional sectors is part of the national accounts system, and accordingly, it consists of coherent definitions and classifications that show how the income of the sectors is created, distributed and redistributed. The economic circuit shows the individual sector’s production and transactions with the other domestic sectors and the external sector, and it is described in a reconciled system of accounts based on double-entry/quadruple-entry bookkeeping (each of the two parties registers each transaction twice).
The production transactions are included as an integral part of the sector accounts, but the main emphasis is on transactions of a distributional nature, such as earnings, property income, taxes, social contributions and social benefits. The institutional sectors are assessed in current prices, and selected series regarding the households are seasonally adjusted.
In principle, institutional units are grouped in six sectors based on their economic behavior. A sector thus includes a group of institutional units engaging in identical economic behavior. As a matter of principle, the national accounts operate with six main sectors: non-financial corporations, financial corporations, general government, households, non-profit institutions serving households (NPISH) and the external sector.
A statement of accounts is drawn up for each sector, thus facilitating the distribution of transactions and balancing items on the individual sectors. The institutional sectors contain a lot of valuable information about the economy, which is useful for economic analyses and/or economic policy. Among the absolute key indicators in the institutional sectors are disposable income, consumption, savings and real investments.
The institutional sectors are prepared in accordance with the guidelines of the European System of National and Regional Accounts (ESA2010) and, consequently, consistent with the rest of the national accounts.
In a macroeconomic analysis, each institutional unit is not looked at separately – the analysis is focused on the aggregate activities of uniform institutions. The units are therefore combined in groups designated institutional sectors, of which some are further grouped into sub-sectors.
A sector thus includes a group of institutional units engaging in identical economic behavior. As a matter of principle, the national accounts operate with six sectors. For more information about the sectors, please see Classification by sector in the European system of accounts.
Classification of transactions
The sector accounts are part of the national accounts and thus consist of a logical and coherent classification system without which it would not be possible to gain an overview of the immense number of financial transactions that take place in the economy during a given period of time.
The institutional sectors classify only three types of items: two transaction items and a balance sheet item.
- Product transactions (P): show the origin of products (domestic production or import) and their use (intermediate consumption, consumption, investments or export)
- Distributive transactions (D): show the distribution of the value added on labour, capital and the general government sector as well as the redistribution of income and wealth.
- Balances (B): show aggregate balancing item of the individual accounts
Classification of accounts
For each of the six main sectors, sector accounts are drawn up that show all relevant transactions and balance sheet items. The following six accounts are relevant for the institutional sectors:
- Production account: shows the value added that was created in resident production units.
- Income generation account: shows gross operating surplus (and mixed income) accruing to resident production units after payment of production taxes, net, and compensation of employees.
- Allocation of primary income account: total primary income, when other income generated by way of compensation to Danish employees and property income (interests, dividends, etc.) has been added.
- Allocation of secondary income account: taxes on income and capital are added as well as other current transfers (including development aid), whereby the disposable income is generated.
- Use of disposable income account: shows the use of the disposable income on consumption and savings.
- Capital account: shows the use of savings on investments, capital transfers or as borrowing or lending, net.
The borrowing or lending, net, is the balance of the account, which is often referred to as the ‘financial savings’. Negative borrowing or lending, net, reflects that the disposable income has not been sufficient to cover the period’s consumption and investment activity. Since any economic transaction is always financed, a negative borrowing or lending, net, equals foreign funding, i.e. borrowing abroad.
All six institutional sectors are covered. In principle, the six sectors can be subdivided into sub-sectors. Only in the annual tables are the financial enterprises subdivided into sub-sectors. Moreover, the split between households and non-profit institutions serving households (NPISH) can only be found in the annual tables.
Statistical concepts and definitions
Other current transfers to and from the rest of the world: Other current transfers include unilateral transactions between the rest of the world and general government, enterprises or individuals resident in Denmark.
Employers’ social security contributions: Employers' social security contributions consist of employers' payments covering employees’ social risks and needs, e.g. in relation to old age, disability, occupational accidents and disease. Employers' social security contributions can be actual or imputed contributions. Actual contributions are the employers’ payments to social security funds and private-funded social benefits, e.g. ATP (national labour market supplementary pension fund) and pension contributions. Imputed contributions are calculated in connection with social schemes where the benefits are paid directly by the employers to their employees or former employees, without any actual payment of contributions being made. In practise, imputed contributions are only calculated in connection with civil servants’ pensions.
Gross and net concepts: The term net is used in two senses in the national accounts. A net indicator is either the difference between two gross indicators, e.g. gross income and gross expenditure, or a gross indicator minus consumption of fixed capital (= ”depreciations”). Consumption of fixed capital is a measure for the physical and technical deterioration during a period. In the national accounts tables, we distinguish between the two concepts as follows:
- A net indicator indicating the difference between two gross indicators is shown by positioning “net” after the concept, e.g. property income, net.
- A net indicator indicating a gross indicator minus consumption of fixed capital has “net” positioned in front of the concept.
Gross savings: The gross savings correspond to the disposable gross national income (GNI) in market prices less consumption expenditure for the entire economy – i.e. expenditure for consumption in NPISH, households and public consumption expenditure. The gross savings thus also equal the gross investments plus capital transfer, net, and borrowing or lending, net.
Gross operating surplus and mixed: Gross operating surplus and mixed income are calculated by deducting compensation of employees and other taxes on production, net, from the gross value added. The income available for compensation of the labour of self-employed persons, payment of the fixed capital as well as consumption of fixed capital. In the general government industry, the gross operating surplus equals the consumption of fixed capital, and as a result, the net operating surplus equals zero, since the production value is conventionally measured from the cost side.
Actual individual consumption: Actual individual consumption covers household consumption expenditure, consumption expenditure in NPISH as well as public individual consumption expenditure.
FISIM: For most producers, the value of their production is calculated directly based on the income they get from the sale of services. When it comes to producers of certain types of financial intermediation services, this procedure is only useful for the income from commissions and fees, but not for the income from the interest margin, i.e. a higher interest rate for credits than for deposits. In the national accounts, the part of the payment for financial intermediation services obtained through the interest margin is called indirectly measured financial intermediation services – or FISIM (Financial Intermediation Services Indirectly Measured). Typically, in connection with bank loans and bank deposits, part of the payment is made by way of FISIM, whereas there is no FISIM in connection with mortgage credits.
FISIM is included in the national accounts like any other produced service, i.e. total resources, consisting of domestic production and imports, equals total use, consisting of intermediate consumption, private consumption and exports.
Borrowing or lending, net: The borrowing or lending, net, is often referred to as ‘the financial savings’.
Positive borrowing or lending, net, reflects that the disposable income has been sufficient to cover the period’s consumption and investment activity. The ‘surplus’ increases the stock of securities, cash and bank deposits held.
Negative borrowing or lending, net, reflects that the disposable income has not been sufficient to cover the period’s consumption and investment activity. The ‘deficit’ reduces the stock of securities, cash and bank deposits held.
The borrowing or lending, net, of the total economy is the sum of the borrowing or lending of the institutional sectors. It represents the financial savings made available by the total economy to the rest of the world (if it is positive) or received from the rest of the world (if it is negative). The borrowing or lending, net, of the total economy equals the borrowing or lending, net, of the rest of the world, only with the sign reversed.
Non-produced assets: The acquisition of non-produced assets, including land, subsoil assets, water resources and biological resources that are not the result of breeding, are not considered as gross fixed capital formation. On the other hand, land improvements in the agricultural sector and other major improvements relating to land are included.
Institutional unit: An institutional unit is defined as an economic entity that with decision-making autonomy and subject to legal responsibility can:
- Own assets and exercise the rights that come with that
- Incur liabilities
- Engage in economic activities, such as production, consumption, investments and savings
- Engage in economic transactions with other units
- Meaningfully prepare a complete statement of accounts including both a profit and loss account and a balance sheet.
Note that a statement of account does not necessarily have to be available for a unit to match the definition. It suffices that the unit, if so desired or required, would be able to keep a meaningful statement of account.
Public consumption expenditure: Public consumption expenditure includes services that the public makes available free of charge, and where it is not possible to refer the consumption to individuals, e.g. the national defence and the administration of justice.
Sector/industry matrix: The main purpose of the sector/industry matrix is to create a basis for drawing up the production account and generation of income account for the non-financial corporate sector and the household sector. For the other sectors, there are other sources available for drawing up the two accounts. Together with the sources from the other three domestic sectors (general government, NPISH and the financial corporations), it adds up to the production value and intermediate consumption in the institutional sectors.
The sector distribution of the mentioned indicators for non-financial corporations and households, respectively, will thus be calculated by means of a sector distribution key. The sector distribution key, which is used for the sector distribution of that part of an industry’s product transactions that cannot be referred to general government, financial corporations or NPISH, is created based on accounts statistics broken down by sector and industry.
Social transfers in kind: Consists of individual goods and services that general government or NPISH transfers to the individual households regardless if these goods and services are purchased on the market or produced as non-market production with general government or NPISH.
The units in the national accounts are resident enterprises, households or other units characterised by economic decision-making autonomy and their ability to enter into economic transactions with other resident or non-resident units.
All economic transactions where at least one of the parties is a resident in a given period.
Geographically, the national accounts cover Denmark, whereas the Faroe Islands and Greenland are treated as the rest of the world.
Annual tables cover the period from 1995 onwards (a few main items go back to 1971), whereas quarterly tables cover from 1999 onwards.
In general, sector distribution of fixed capital goes back to 1995. However, figures for consumption of fixed capital for general government are published back to 1966 as memo item under the figures broken down by industry.
Not relevant for these statistics.
Unit of measure
Calendar year and quarter.
Frequency of dissemination
The quarterly sector accounts are published four times a year - the months of March, June, September and December.
The annual sector accounts are published three times annually - March, June and September
Legal acts and other agreements
Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European System of national and regional accounts in the European Union (ESA2010) (EUT L 174 26.06.2013, s. 1).
Commission Decision of 17 December 2002 further clarifying Annex A to Council Regulation (EC) No 2223/96 as concerns the principles for measuring prices and volumes in the national accounts.
Cost and burden
The statistics are based on information collected by Statistics Denmark for the compilation of other statistics. As such, there is no direct reporting burden in the compilation of the national accounts.
For further information, contact Statistics Denmark directly.