Provisional estimates indicate that the Gross Domestic Product (GDP) for the third quarter of 2016 amounted to €2,536.5 million, an increase of €113.0 million or 4.7 per cent when compared to the corresponding period last year. In real terms, GDP went up by 3.0 per cent, the NSO said today.

The production approach

During the third quarter of 2016, Gross Value Added (GVA) increased by €100.2 million when compared to the same quarter last year. GVA is the net result of output valued at basic prices less intermediate consumption valued at purchasers’ prices.

The increase in GVA was mainly generated by public administration and defence; education; human health and social work activities which increased by €24.7 million or 6.8 per cent; Arts, entertainment and recreation, repair of household goods and other services which increased by €21.5 million or 7.9 per cent and professional, scientific and technical activities; administrative and support service activities which increased by €20.0 million or 7.4 per cent. Drops were registered in construction and agriculture and fisheries.

The expenditure approach

The expenditure approach is another method for calculating GDP, which totals consumption of households, government and non-profit institutions serving households, investment, government spending and net exports.

Total final consumption expenditure in nominal terms increased by 0.5 per cent following an increase in household final consumption expenditure of 2.6 per cent and a drop in government consumption expenditure of 6.0 per cent. The latter is mainly due to a significant increase in market output. In real terms total final consumption expenditure increased by 0.6 per cent in real terms, following an increase in household final consumption expenditure of 3.1 per cent and a drop in government consumption expenditure of 7.3 per cent.

Gross fixed capital formation which measures investment decreased by 21.0 per cent in nominal prices and decreased by 22.3 per cent in real terms. Real exports increased by 0.3 per cent and real imports decreased by 5.7 per cent.

The income approach

The third approach to measure economic activity is the income approach which shows how GDP at market prices is distributed into compensation of employees, operating surpluses of enterprises and taxes on production and imports net of subsidies.

Compared to the corresponding quarter last year, the increase in GDP at current prices of €113.0 million is estimated to have been distributed into a €52.7 million increase in compensation of employees, a €57.6 million increase in gross operating surplus of enterprises, and a €2.8 million increase in net taxation on production and imports.