GROSS FIXED CAPITAL FORMATION
NOTES ON METHODOLOGY
Introduction
Gross fixed capital formation (GFCF) is one of the main components of the expenditure method of calculating gross domestic product (GDP) that indicates how much of the new value added in an economy is invested rather than consumed. Gross fixed capital formation is a key indicator of the economy’s future production capacity. The European System of Accounts (ESA 2010) defined it as resident producers’ acquisitions, less disposals, of fixed assets during a given period. It also includes certain additions to the value of non-produced assets realised by producers or institutional units. Fixed assets are tangible or intangible assets produced as outputs from production processes that are used repeatedly, or continuously, for more than one year.
Currently, in the PC-Axis database, gross fixed capital formation in current prices is shown in two tables: in one table, according to the HR_NUTS 2021 – HR NUTS 2 and NKD 2007, level A10 classifications, and in the second according to NKD 2007 classifications, levels A21, and AN, 3-digit level.
Sources and methods of data collection
The main source and starting point of GFCF calculation is the statistical survey Annual Report on Investments in Fixed Assets of Legal Entities (INV-P form). The INV-P survey has been carried out annually since 1967. In 1996, the INV-P form was revised in order to achieve harmonisation with the then-current international statistical standards and methodologies, i.e., the European System of Accounts from 1995 (ESA 95) and UN’s System of National Accounts from 1993 (SNA 93). In 2014, the INV-P form was revised and adjusted in line with the revised international statistical standards and methodologies, ESA 2010 and SNA 2008. The new form of the report enables the CBS to collect data about new assets and improvements and acquisitions of existing assets on the detailed level of AN classification described in ESA 2010.
The reporting units in the INV-P survey for the reference year are legal entities in the country selected using the judgemental sample method. The survey covers the following legal entities:
• Large and medium-sized enterprises, financial and insurance institutions, budget beneficiaries
• Small enterprises (since 2017, small and micro-sized enterprises) selected using the judgemental sample method on the basis of the value of fixed assets
• Non-profit organisations – major investors.
After the INV-P form is processed, the data are complemented with various administrative sources in order to achieve full coverage of all the transactions of all economy sectors in estimating gross fixed capital formation.
The data are taken from the following administrative sources: annual financial statements of budget beneficiaries, annual financial statements of entrepreneurs, Tax Administration database on fixed assets for small units, annual financial statements of non-profit institutions, Tax Administration database on purchase and sales of dwellings and grey economy data – own-account construction and major improvements (excluding land) of dwellings by households.
Classifications
HR_NUTS 2021 – HR NUTS 2 consists of the following statistical regions:
Pannonian Croatia (HR02), which includes the County of Bjelovar-Bilogora, the County of Virovitica-Podravina, the County of Požega-Slavonia, the County of Slavonski Brod-Posavina, the County of Osijek-Baranja, the County of Vukovar-Srijem, the County of Karlovac, and the County of Sisak-Moslavina,
Adriatic Croatia (HR03), which includes the County of Primorje-Gorski Kotar, the County of Lika-Senj, the County of Zadar, the County of Šibenik-Knin, the County of Split-Dalmatia, the County of Istria, and the County of Dubrovnik-Neretva,
The City of Zagreb (HR05) and
Northern Croatia (HR06), which includes the County of Međimurje, the County of Varaždin, the County of Koprivnica‑Križevci, the County of Krapina-Zagorje, and the County of Zagreb.
NKD 2007 fully follows the structure of Statistical Classification of Economic Activities in the European Community – NACE Rev. 2 up to the class level (four-digit numerical code).
NKD 2007 level A10 consists of the following industries: Agriculture, forestry and fishing (A); Manufacturing, mining and quarrying and other industries (BTE); Manufacturing (C); Construction (F); Wholesale and retail trade, transportation, storage, accommodation and food service activities, Information and communication (GTJ); Wholesale and retail trade, transportation, storage, accommodation and food service activities (GTI); Information and communication (J); Financial and insurance activities, Real estate activities, Professional, scientific, technical, administrative and support service activities (KTN); Financial and insurance activities (K); Real estate activities (L); Professional, scientific, technical, administrative and support service activities (M_N); Public administration and defence, education, human health and social work activities and Other service activities (OTU); Public administration and defence, education, human health and social work activities (OTQ); Other service activities (RTU).
NKD 2007 level A21 consists of the following industries: Agriculture, forestry and fishing (A); Mining and quarrying (B); Manufacturing (C); Electricity, gas, steam and air conditioning supply (D); Water supply; sewerage, waste management and remediation activities (E); Construction (F); Wholesale and retail trade; repair of motor vehicles and motorcycles (G); Transportation and storage (H); Accommodation and food service activities (I); Information and communication (J); Financial and insurance activities (K); Real estate activities (L); Professional, scientific and technical activities (M); Administrative and support service activities (N); Public administration and defence, compulsory social security (O); Education (P); Human health and social work activities (Q); Arts, entertainment and recreation (R); Other service activities (S); Activities of households as employers; undifferentiated goods- and services-producing activities of households for own use (T); Activities of extraterritorial organisations and bodies (U)
AN 3-digit level consists of the following types of non-financial assets: Construction (N11KG – aggregate of N111G and N112G); Dwellings (N111G); Other buildings and structures (N112G); Machinery and equipment and weapons systems (N11MG – aggregate of N1131G, N1132G and N110G); Transport equipment (N1131G); ICT equipment (N1132G); Other machinery and equipment and weapons systems (N110G); Cultivated biological resources (N115G); Intellectual property products (N117G – includes research and development, mineral exploration and evaluation, computer software and databases and entertainment, artistic and literary originals)
Abbreviations
AN Classification of non-financial assets
CBS Croatian Bureau of Statistics
HR_NUTS 2021 – HR NUTS 2 National Classification of Statistical Regions – level 2 statistical regions, 2021 version
ICT Information and Communications Technology
NKD 2007 National Classification of Activities, 2007 version