1. Item 24b: European Sector Accounts
ESTP course on National Accounts ESA 2010
Luxembourg, 15 May May Eurostat

2. Content Purpose of the Sector Accounts
Overview of compilation of the European Sector Accounts
Data dissemination and data sharing with the international organisations
Future prospects

3. 1. Purpose of the Sector Accounts
To analyse the behaviour of economic agents, in particular how their income is:
earned, spent, saved
Transactions (non-financial)
Goods and Services
Distributive transactions
Following the sequence of accounts

4. 1. Purpose of the Sector Accounts
The matrix lay-out
Example: the sector accounts of EA19, 2013Q1

5. 1. Purpose of the Sector Accounts
Key indicators
Households
Saving rate: Gross Saving/(GDI + D8net)
Investment rate: GFCF/(GDI + D8net)
Real Income and Consumption per capita
Non-financial corporations
Investment rate: GFCF/GVA
Profit share: GOS/GVA

6. 2. Compilation of the European Sector Accounts
from national to European accounts
Data transmission to Eurostat:
Annual financial and non-financial Sector Accounts – countries are obliged (according to ESA 2010 TP) to submit full set of sector accounts by t+9 months with minimum time-span from 1995 onwards
Quarterly non-financial Sector Accounts – countries are obliged (according to ESA 2010 TP) to submit set of sector accounts by t+85 (EA countries) and t+3m (EA finalized & non-EA countries), with minimum time-span from 1999Q1 onwards
Confidentiality of data is determined by the use of flags. Data sent by the countries as free for publication are shared with other international organisations (ECB, OECD, ECFIN)

7. 2. Compilation of the European Sector Accounts

8. 2. Compilation of the European Sector Accounts
from national to European accounts
The compilation of European aggregates
(ESA 2010, Chapter 19)
Conversion to euros
Estimation of missing (small) countries and missing series
Re-balancing countries data (if needed)
Incorporation of the European institutions
Consolidation of intra-EA / intra-EU flows
Re-balancing of the accounts
Seasonal adjustment of selected series (for key indicators)

9. 2. Compilation of the European Sector Accounts
from national to European accounts
From a practical point of view, the compilation is divided in four steps:
Extrapolation: summing-up countries
Adjustment: replacing selected transactions with data coming from other sources
Balancing: making the overall picture consistent
Validation: checking the results

10. 2. Compilation of the European Sector Accounts
from national to European accounts
Extrapolation
EA/EU = Σcountries
Estimation of missing countries
Estimation of missing transactions (not sent by countries because of derogations, non-compliances or voluntary transmissions)

11. 2. Compilation of the European Sector Accounts
from national to European accounts
Extrapolation
Estimation of missing series:
Done on countries' data, ad hoc solution (using ASA data if available)
Estimation of missing (small) countries:
EA  ECB (Z11 file)
EU  ESTAT
Re-balancing countries data (if needed):
VAL.V  Original MS data are balanced
VAL.VM  Original MS data are not balanced. Manual re-balancing of the data by ESTAT
Automatic Conversion to euros

12. 2. Compilation of the European Sector Accounts
from national to European accounts
Adjustment
Data are replaced by other sources
Estimation intra-RoW (ECB, BoP)
Estimation of D.43 (ECB)
Trade statistics (Trade Statistics)
GFS data (GFS)
EUI data (ECB, BoP)

13. 2. Compilation of the European Sector Accounts
from national to European accounts
The Rest of the World sector
The European RoW should gather flows between European residents and third countries =>
European RoW ≠ Σ National RoWs
« Intra-flows » between European residents are:
(1) estimated using the BoP geographical breakdown
(2) removed from the sum of national RoWs

14. 2. Compilation of the European Sector Accounts
from national to European accounts
Before consolidation
After consolidation

15. 2. Compilation of the European Sector Accounts
from national to European accounts
The RoW, example:
Compensation of employees paid to the RoW
D1 / S2 / uses = 26.5 billion €
BoP310 / credits / Intra-EU = 14.1 billion €
BoP310 / credits / Extra-EU = 11.3 billion €
But = 25.4 ≠ 26.5
Discrepancies are distributed proportionally:
=> EU/D1/S2-Intra/uses = 14.7 billion €
=> EU/D1/S2-Extra/uses = 11.8 billion €

16. 2. Compilation of the European Sector Accounts
from national to European accounts
Asymmetries
Definition: Intra_resources – Intra_uses
Example:
EU/D1/S1+S2-Intra/uses = 14,7 billion €
EU/D1/S1+S2-Intra/resources = 18,1 billion €
Asymmetries for D1 = 3,4 billion €
European sector accounts do not balance
Asymmetries must be allocated to sectors to re-balance the accounts =>
European accounts ≠ Σ national accounts
(even for domestic sectors)

17. 2. Compilation of the European Sector Accounts
from national to European accounts
Estimation of D43, intra flows:
EA  ECB
EU  ESTAT
Trade statistics, used to absorb asymmetries:
P2_S11: intermediate goods and services (business travel mainly)
P51G_S11: capital goods
P2_S12 and P2_S1M: intermediate goods
P31_S1M: consumption goods and services (private travel mainly)

18. 2. Compilation of the European Sector Accounts
from national to European accounts
GFS data:
When available, the data published by GFS replace completely the data of S13 sector at aggregated level
Missing data: before 2002; coverage is not exactly the same
Challenging timeliness

19. 2. Compilation of the European Sector Accounts
from national to European accounts
EU Institutions
ECB resident of the euro area and EU (sector S12, ECB)
ESM resident of the euro area and EU (sector S12, ECB)
EIB resident of the EU (sector S12, BoP) but not of the euro area
European institutions whose accounts are recorded in the General Budget are resident of the EU but not euro area (sector S13, BoP)

20. 2. Compilation of the European Sector Accounts
from national to European accounts
Balancing
Data are adjusted in order to be internally consistent
Only sectors S.11, S.12 and S.1M are impacted
S.1 is obtained as sum of sectors

21. 2. Compilation of the European Sector Accounts
from national to European accounts
Balancing
Proportional, including only S11, S12 and S1M sectors
Ad hoc, a weak transaction is left as a residual
Impact may be large (it definitely increased with the introduction of ESA2010)
Room for improvements?

22. 2. Compilation of the European Sector Accounts
from national to European accounts
Validating
Final results are checked
Results are internally consistent
Causes of revisions, major events, etc. (specific country? Other sources?)
Ready for seasonal adjustment!

23. 2. Compilation of the European Sector Accounts
from national to European accounts
Validation
EA/EU aggregates are validated as other countries
As many sources are involved, it is time consuming understanding where the main revisions/events are coming from (countries, BoP, GFS, etc.)
Once validated, selected transactions are seasonally adjusted using JDemetra+ 2.1

24. 3. Data dissemination
Annual non-financial Sector Accounts EA/EU key indicators released before t+4 months. Key indicators includes:
Households: saving rate, investment rate and debt-to-income ratio, net financial asset ratio, real income and real consumption per capita
Businesses: profit share, investment rate, debt-to-income ratio, return on capital employed, return on equity
Quarterly non-financial Sector Accounts EA/EU data:
releases at around t+102 days (preliminary, it will be t+94 as from July 2017), including news releases (seasonally adjusted), on:
Households: saving rate and investment rate
Businesses: profit share and investment rate
release at around t+119 days (final), including (seasonally adjusted):
Households: real income and real consumption per capita
ECB publishes Quarterly Financial Sector Accounts for EA at around t+119 days

25. Households saving rate

26. Business profit share 26

27. Blue layout

28. 4. Future prospects In cooperation with Member States:
Improve the timeliness  Flash estimates published at around t+94 days as from July 2017
In cooperation with Member States, OECD and ECB:
Give more attention to the household perspective, and in particular on the distributional aspects (t+119 press release / Stiglitz-Fitoussi-Sen report)

29. Thanks for your attention!!
For more information, please visit our dedicated Eurostat's website on the Sector Accounts at: