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GDP by Income and Expenditure Approach – Basic Price GDP Declined by 1.73% Real Term in Q4’16

Nigeria Economy	4688 VIEWS
Nigeria Economy
4688 VIEWS

Tuesday, October 24, 2017 12:00PM / NBS

The Gross Domestic Product (GDP) can be derived as the value of all goods and services available for final uses and export. GDP at market prices includes net taxes on products; this is subtracted to obtain basic price GDP.

The expenditure approach measures the final uses of the produced output as the sum of Final consumption, Gross Capital Formation and Exports less Imports, which are considered in turn in this chapter. Consumption of fixed capital—a measure of depreciation of assets—comprises the difference between Gross Domestic Product (GDP) and Net Domestic Product (NDP) and is also considered in this chapter.

Basic price GDP declined in real terms by 2.34% and 1.73% the third and fourth quarters of 2016 respectively, considerably lower than the growth rates of 2.84% and 2.11% that were recorded in the same quarters of 2015. Market price GDP declined at a similar rate in the third quarter at 2.38%, and a slightly slower rate1.63% in the fourth quarter as a result of faster growth in Net taxes in the fourth quarter.

Household Final Consumption Expenditure:	This consists of expenditure, including imputed expenditure, incurred by resident households on individual consumption goods and services. This is calculated as a residual.
General Government Final Consumption Expenditure:	This consists of expenditure, including imputed expenditure, incurred by government at all levels on both individual and collective consumption goods and services. Individual consumption items are those that are provided to individual households, such as education and health services. Collective consumption items relate to goods and services utilised by society as a whole, such as security and infrastructure.
Not for Profit Institutions Serving Households Final Consumption Expenditure	This consists of expenditure, including imputed expenditure, incurred by Not-for-Profit-Institutions-Serving-Households, which consist of organisations such as charities and non-government organisations.
Gross Fixed Capital Formation	This is measured as the total value of producer’s acquisitions, less disposals, of fixed assets during the accounting period, plus certain additions to the value of non-produced assets (such as improvements to natural assets) realised by the productive activity of institutional units.
Change in Inventories	is the consist of changes in; stocks of outputs that are still held by units that produced them prior to their being further processed , sold, delivered to other units or used in other ways, measure by the value of the entries into inventories less the value of withdrawals and the value of any recurrent losses of goods held in inventories.
Exports of Goods and Services	Consists of sales of goods and services to residents abroad, from residents within Nigeria
Imports of Goods and Services	Consists of sales of goods and services from residents abroad, to residents within Nigeria
Consumption of Fixed Capital	This represents the reduction in value of the fixed assets used in production during the period, that results from physical deterioration, normal obsolescence or normal accidental damage.

Household Final Consumption

Household consumption overall fell in real terms between 2014 and 2015 by 5.71% The general slowdown in the economy, particularly in the fourth quarter, may have contributed to households' decision to consume less and conserve more than in the previous year.

This component accounted for 60.02% of real GDP in 2016. In nominal terms, this component nevertheless increased by 14.74%, reflecting the increase in prices over this period.

Not-for-Profit-Institutions-Serving-Households (NPISH)
After recording relatively strong growth in the beginning of 2016, this expenditure component recorded negative real growth in the second half of 2016; continued its decline by 6.90% in the third quarter, and recorded a slower decline of 3.18% in the fourth. In nominal terms, NPISH expenditure grew by 9.43% and 12.83% respectively in the third and fourth quarters. Despite this growth in nominal terms, overall expenditure of this component declined by 2.98% in 2016.

General Government

General government expenditure is predominantly on collective expenditure items; this subcomponent accounted for 63.15% of government expenditure in 2016, although this proportion is lower than the 68.77% recorded in 2015. Collective expenditure recorded steep declines in the third and fourth quarters of 2016, of 23.90% and 28.62% in real terms. Overall, this expenditure recorded the deepest decline amongst expenditure items at 22.1% in 2016. Individual consumption followed a different pattern; this component Household Final Consumption

This component accounted for 60.02% of real GDP in 2016. In nominal terms, this component nevertheless increased by 14.74%, reflecting the increase in prices over this period.

General Government

Growth in Consumption Components in 2016
	Real		Nominal
	Q3	Q4	Q3	Q4
Y on Y
Households	-2.39	-14.59	14.74	12.54
NPISH	-6.90	-3.18	9.43	12.83
Government	-19.56	-17.83	-5.45	-4.25
individual	-10.68	8.22	-9.77	-2.02
collective	-23.90	-28.62	-3.94	-4.96
Q on Q
Households	14.58	-7.19	21.39	4.45
NPISH	38.38	24.08	44.34	29.42
Government	-3.49	6.54	0.66	11.12
individual	11.38	12.76	1.22	11.21
collective	-10.35	2.97	0.48	11.09

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