GDP by Expenditure: Real GDP improved to 5.01% in Q2 2021 – 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; taxes are 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 report. 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 report.
In Q1 2021, the Gross Domestic Product inclined in real terms by 0.51% year-on-year but improved to 5.01% in Q2 2021. This shows that the economy is growing stronger with the positive trend being sustained from the previous quarter. However, on an annual basis in 2020, the Gross Domestic Product grew in real terms by -1.92% year-on-year. This was significantly lower compared to 2.27% recorded in 2019, and 1.91% recorded in 2018.
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 of 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:
This consists 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:
This consists of sales of goods and services to residents abroad, from residents within Nigeria
Imports of Goods and Services:
This 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.
Summary-Analysis of Expenditure Components
The graph below depicts the proportions of real GDP expenditure components from Q1 2017 to Q2 2021, as well as real GDP growth rates over the same period at basic prices.
Household Consumption accounted for the largest share of real Gross Domestic Product at market prices, representing 53.68% and 51.82% in Q1 and Q2 2020 respectively, compared to 76.83% and 72.88% in the corresponding quarters of 2021. Net Exports, which represented -2.23% of total real GDP at market prices in Q1 2021, however inclined considerably in Q2 to 4.32%.
The share of General Government Consumption expenditure represented 5.92% in Q1, but rose to 6.33% in Q2 2021. Gross Fixed Capital Formation accounted for 17.84% of real GDP in Q1, which decreased slightly to 14.85% in Q2 2021. The share of Non-Profit Institutions Serving Households (NPISH) moved from more than 1% in Q4 2020 to 0.78% in Q1 and 0.82% in Q2 2021. NPISH had a share above 1% in Q4 2020 arising from interventions on COVID-19 pandemic.
Proshare
