GNI Questionnaire 2005 and the accompanying quality report
Latvia 2005
Quality report 2005
LATVIA
Part 1: General information
In 2002 and 2003 there were no major changes and improvements in the data sources and calculation methods of components of GNI that would have an impact on GDP and GNI, compared to the last year’s questionnaire. Concerning the submitted data there has been no changes in the timetable for finalising and publishing the data.
Due to revisions GNI for Latvia has been revised upwards by 1.37 (for 2002) and 1.08 (for 2003). The changes in the Gross National Income figures for 2002-2003 are given in the table ‘R1 - 2005 (LV)’ and have four main reasons:
- taxes and subsidies on products
- routine revisions – inclusion of annual data
- revision of the Balance of Payments data by the Bank of Latvia
- changes due to the impact of the allocated FISIM
Regular revisions of the preliminary data were on the basis of the updated annual statistics by surveys. Due to the preliminary National Accounts data for 2003 have been revised and new precise results obtained for the following components: output of goods and services, intermediate consumption, changes in inventories, compensations of employees and gross operating surplus and mixed income.
After the revisions of the Balance of Payments for 2000-2004 the corrections of property income were received from the RoW and exports and imports of goods and services were corrected.
At present the CSB of Latvia has re-calculated FISIM according to Eurostat’s requirements and the achieved results have influence on the totals of GNI figures. Until the re-calculations all FISIM has been treated as intermediate consumption and deducted from the value added. Total FISIM in 2002-2003 was 148 and 165 million LVL, and the new recalculated values for 2002-2004 are equal to 112, 129 and 150 million LVL, respectively; the new obtained FISIM is allocated in sectors by GNI components: output, intermediate consumption, final consumption expenditure, property income received/paid from/to the Rest of the World, exports and imports of goods and services.
Main GNI revisions at current prices (million LVL, %)
Year / Total GNI / Changes /Preliminary data / Present data / + / - / % /
2002 / 5 684 / 5 762 / + 78 / 1.37
2003 / 6 287 / 6 355 / + 68 / 1.08
Part 2: Revisions to previous years
Gross National Income (excluding FISIM allocation) figures for 2002 and 2003 have been revised by 78 and 68 million LVL, respectively (see table R1–2005(LV) item 27) and are based on the changes in Gross Domestic Product by 67 and 68 million LVL, which have affected all three GDP approaches: production based approach, expenditure based approach and income based approach.
Production approach
Million LVL, %
2003 / preliminary data / new data / changes / changes, % /Output / 12 103 / 12 485 / 382 / 3.2
Intermediate consumption / 6 464 / 6 774 / 310 / 4.8
Gross Value Added / 5 639 / 5 711 / 72 / 1.3
Taxes on products / 700 / 703 / 3 / 0.4
Subsidies on products / 17 / 24 / 7 / 41.2
Gross Domestic product / 6 322 / 6390 / 68 / 1.1
The main changes in components of production approach have two causes – routine revisions and the impact of allocated FISIM changes.
The item ‘subsidies on products’ was revised and has increased by 41.2 per cent due to the corrections of preliminary data, which were higher than preliminary data.
Changes in 2003 were caused by the routine updates with annual survey results of preliminary (quarterly) data. Recalculations of quarterly – preliminary results with data obtained and calculated by annual data sources will be done and more comparable and precise results will be obtained.
Expenditure approach
Million LVL, %
2003 / preliminary data / new data / changes / changes, % /Total final consumption expenditure / 5 360 / 5 354 / - 6 / -0.1
Household final consumption expenditure / 3 977 / 3 968 / -9 / -0.2
NPISH final consumption expenditure / 8 / 15 / 7 / 187.5
General government final consumption expenditure / 1 375 / 1 371 / -4 / -0.3
Gross capital formation / 1 765 / 1 840 / 75 / 4.2
Gross fixed capital formation / 1 528 / 1 540 / 12 / 0.8
Changes in inventories / 237 / 300 / 63 / 26.6
Acquisitions less disposals of valuables / 0 / 0 / - / -
Exports of goods and services / 2 681 / 2 694 / 13 / 0.5
Imports of goods and services / 3 484 / 3 498 / 14 / 0.4
Mainly for both 2002 and 2003 changes were caused by the reviewed Balance of Payments and the impact of the allocated FISIM changes but for 2003 – by the updates of results of annual survey.
The items ‘Exports of goods and services (P6)’ and ‘Imports of goods and services (P7)’ were changed according to revisions made by the Bank of Latvia in the Balance of Payments statistics.
Income approach
Million LVL, %
2003 / preliminary data / new data / changes / changes, % /Compensations of employees / 2 537 / 2 535 / -2 / -0.0
Gross operating surplus and mixed income / 3 114 / 3 131 / 17 / 0.5
Taxes on production and imports / 724 / 777 / 53 / 7.3
Subsidies on production / 53 / 54 / 1 / 1.9
The main changes in the components of the income approach have two causes – routine revisions and the impact of the allocated FISIM changes.
There is an impact on the compensation of employees due to the updated estimates of calculation methods of exhaustiveness.
During the implementation of the PHARE2002 pilot project “Government finance statistics” in 2003 reconsideration of the content of the item “taxes on products and imports” was made. The values of taxes on production increased by 53 million LVL (7.3 per cent) in 2003 due to both exclusion of the incorporated state company’s “Latvia’s wood” fixed payment and deduction from port payments, and inclusion of taxes on property into transaction D.29.
Transition from GDP to GNI
During the Eurostat PHARE2002 project, an overview of the sources and methods of components of compilation of transition from Gross Domestic Product to Gross National Income were done.
Million LVL, %
2003 / preliminary data / new data / changes / changes, % /Property income received from the RoW / 110 / 113 / 3 / 2.7
Property income paid to the RoW / 239 / 220 / -19 / -7.9
The main reason for data revision by 37 million LVL (-20.6 per cent) in 2002, and 18 million LVL (-7.9 per cent) in 2003 was the updating of data on property income paid to the rest of the world.
In the end of September 2004 the Bank of Latvia made a revision of the Balance of Payments data for the years starting with 2000. Changes are related to two main actions: recalculations of reinvested earnings in previous years and corrections in surveys data provided by enterprises. Changes were mainly related to the revised figures for reinvested earnings. Large enterprises had made calculations not only for dividends in 2003, but also for previous years (periods). Changes in the reinvested earnings values have influence on the transition from GDP to the GNI (primary income) component ‘Property income paid to the rest of the world’.