Quarterly Sector Accounts - 4. quarter of 2016

Outflow of profits to abroad reached 8.4% of GDP in 2016

31.03.2017
Code: 050057-16
 

Household real income increased by 3.1% in 2016 and real consumption per capita increased by 2.7%, y-o-y. Income from profit belonging to foreign owners of corporations reached 8.4% of GDP in 2016.


Non-financial corporations: profitability in the Q4 decreased, year-on-year

Profit rate1 in the Q4 2016 was 49.7%, which is by 1.5 p.p. less, y-o-y. The decrease in profitability of corporations is mainly due to an increase in wage costs, which grew by 5.8%, y-o-y. Investment rate2 increased by 1.9 p.p., y-o-y, and reached 30.7%.  


Households: real income increased by 2.1% in the Q4

Household real income per capita3 increased by 2.1%, year-on-year, in the Q4. Household real consumption per capita4 grew with a slightly higher growth rate, i.e. by 2.2%.

Average monthly income of households per capita in nominal terms5 was CZK 25 106; of that, CZK 4 590 consisted of individual services and goods6 provided by the general government and non-profit institutions serving households.

Average monthly income from employment7 reached CZK 30 121 in the Q4 and it increased in real terms by 2.6%, compared to the corresponding period of the previous year.  

Average monthly consumption of households per capita in nominal terms8 reached CZK 22 605.

Resulting from the faster growth of household expenditure compared to their income was a lower saving rate9 compared to the previous year, namely 13.6%. Investment rate in the household sector, on the contrary, significantly increased to 10.3%, year-on-year, which was related to increasing investment expenditure on acquisition of a dwelling. 


Non-financial corporations in 2016: profitability slightly decreased

Profit rate1 in 2016 dropped to 50.2%, which was by 1.2 p.p. less, y-o-y. Nevertheless, the profit rate in the CR still remained high above the EU average, which is approximately 40%.

Investment rate2 slightly decreased by 0.4 p.p. compared to 2015 and reached 28.1%.

Profit rate and investment rate of non-financial corporations (%)

 

Q1

Q2

Q3

Q4

Year 2016

Profit rate

49.1

52.2

49.6

49.7

50.2

Investment rate

26.8

26.4

28.3

30.7

28.1


Households in 2016: real income increased by 3.1%

Household real income per capita3 increased by 3.1% compared to 2015. Household real consumption per capita4 grew by 0.4 p.p. slower growth rate, i.e. by 2.7%.

Household real income and expenditure, y-o-y change (%)

 

Q1

Q2

Q3

Q4

Year 2016

Real income

3.4

5.0

1.8

2.1

3.1

Real consumption (expenditure)

 

2.6

 

3.5

 

2.5

 

2.2

 

2.7

Average monthly income of households per capita in nominal terms5 was CZK 23 436, of that CZK 4 069 consisted of individual services and goods6 provided by the general government and non-profit institutions serving households.

Average monthly income from employment7 reached CZK 28 386 in 2016 and it increased in real terms by 3.4%, compared to 2015.

Average monthly consumption of households per capita in nominal terms8 reached CZK 21 295.

Saving rate9 reached 12.1% in 2016 and it was by 0.1 p.p. higher than in 2015.

Investment rate in the household sector reached 9.0% in 2016.  


Relationship to the rest of the world in 2016: profit from foreign investment10 exceeded CZK 398 bn.

An outflow of income to abroad in 2016 was 8.4% of the GDP. Solely in the form of dividends the outflow was more than CZK 288 bn, which is related to high profitability of foreign direct investment in the Czech Republic.

On the contrary, outflow of income from profits was partially compensated by inflow of income from abroad, especially by interest and income from employment. A negative balance of primary income from abroad reached CZK 293.2 bn.

Gross national income in real terms increased by 3.9% in 2016 having thus higher growth rate than the gross domestic product.

Gross disposable income for the entire economy in real terms grew in 2016 by 3.5%.

At the same time, estimate of the gross domestic product (GDP) has been refined, due to new data for the general government sector. The refinement had no important impact on the GDP growth rate. For the time series of GDP resources and uses see: https://www.czso.cz/csu/czso/hdp_ts.

 

Notes:
1.   The profit rate of non-financial corporations is defined as the gross operating surplus divided by the gross value added (B.2g/B.1g). The indicator refers to profitability of production factors from the production process.
2.   The investment rate of non-financial corporations is defined as the gross fixed capital formation divided by the gross value added (P.51g/B.1g). The indicator refers to the investments in non-financial assets (buildings, machinery etc.) divided by the value created during the production process.
3.   Household real income per capita is defined as the adjusted gross disposable income of households, in nominal terms, divided by the mid-year population and deflated by the deflator (price index) of household final consumption expenditure.
4.   Household real consumption per capita is defined as real household final consumption, in nominal terms, divided by the mid-year population and deflated by the deflator (price index) of household final consumption expenditure.
5.   Average monthly income of households per capita, in nominal terms, is defined as the adjusted disposable income of households divided by the mid-year population.
6.   Individual services and goods provided to households by the general government and non-profit institutions serving households (NPISHs) refer to the value of products and services provided in the form of health and social care, education, housing, and the like. They include especially benefits in kind related to health insurance (payments for health aids,  medical and dental treatment, medical operations, and the like) paid by health insurance companies to providers of such goods and services. Social transfers in kind (D.63) further include benefits in kind provided by municipalities (including reimbursements for approved household expenditure for certain types of products and services) and all the value of non-market services of the general government and non-profit institutions serving households provided for individual consumption. The same value is imputed in the sector of households on the income side (adjusted disposable income) as well as on the expenditure side (real final consumption of households).
7.   Average monthly income from employment is defined as wages and salaries for the national economy (D.11) in average per month divided by the number of employees (full-time equivalent). The wages and salaries indicator includes all income from employment, namely in cash as well as in kind (employee benefits) regardless of whether they have been officially reported or not. The number of employees (full-time equivalent) includes all forms of employment, formal and informal. Various types of agreements are also included. The calculation does not include hours worked by working owners of enterprises, who are according to national accounts definitions included in the category of employees.
8.   Average monthly consumption of households per capita, in nominal terms, is defined as the real household final consumption divided by the mid-year population.
9.   Household saving rate is defined as the gross saving divided by the gross disposable income with inclusion of adjustment for net share of households in reserves of pension funds. (B.8g/(B.6g+D.8)). Gross saving is part of gross disposable income, which has not been consumed in the form of final consumption expenditure.
10. Profit from foreign investment consists of dividends paid and of reinvested earnings. Dividends are related to the economic result (profit/loss) of the previous period and reinvested earnings are thus a supplement to the economic result (profit/loss) of current period and may take a form of a loss (reach negative values). These two components in total are the profit belonging to foreign owners.

Contact person: Vladimír Kermiet, Director of the National Accounts Department, phone number (+420) 274 054 247, e-mail: vladimir.kermiet@czso.cz
Used data sources updated as at: 20 March 2017
Related CZSO website: https://www.czso.cz/csu/czso/quarterly-national-accounts-gdp-resources-and-uses-and-gdp-preliminary-estimate
Next Release will be published on: 30 June 2017 (Quarterly Sector Accounts for the first quarter of 2017)

Data of quarterly sector accounts are not seasonally adjusted and therefore cannot be compared quarter-on-quarter.

The news releases of Eurostat on quarterly sector accounts are published later. The latest published information for the third quarter of 2016 is available at:
http://ec.europa.eu/eurostat/web/products-press-releases/-/2-13012017-AP,
http://ec.europa.eu/eurostat/web/products-press-releases/-/2-13012017-BP,
http://ec.europa.eu/eurostat/web/products-press-releases/-/2-27012017-AP.

Quarterly sector accounts data are published on the CZSO website in the tables of Transactions in Products and Distributive Transactions by Sector: http://apl.czso.cz/pll/rocenka/rocenkavyber.kvart_qsa?mylang=EN
and Quarterly Non-Financial Sector Accounts (Current and Capital Accounts): 
http://apl.czso.cz/pll/rocenka/rocenkavyber.kvart_qsa_mat?mylang=EN

 

  •      acsu033117.doc

  • Annexes:
  • Table 1 Selected indicators of Quarterly Sector Accounts (seasonally not-adjusted data)
    On 31st May 2017 10:15 a.m. figures were fixed for all quarters of 2016 due to technical problems.
  • Table 2 Selected indicators of Quarterly Sector Accounts - y-o-y (seasonally not-adjusted data)
  • Graph 1 Average monthly income of households from employment per employee development, not seasonally adjusted
  • Graph 2 Real income and household consumption per capita development, not seasonally adjusted
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Published: 31.03.2017
The data are valid as of the release date of the publication.


Contact: Information Services Unit - Headquarters, tel.: +420 274 056 789, email: infoservis@czso.cz