Measuring GDP of Turkey by total spending method

The second approach for measuring GDP is using aggregating all the expenditures in a given year in an economy.

[

GDP =  C  +  I  +  G  +  XN

I =  I_f  +  I_s

GDP =  C  +  I_f  +  I_s  + G + XN

]

C = Consumption

I = Gross investment

I_f = Fixed investment

I_s = Stock investment

G = Government purchases

XN = Net exports

Currently, there are two data tables related to the total spending approach at the TUIK (Turkish Statistical Institute) web site.  (see http://www.turkstat.gov.tr/UstMenu.do?metod=temelist follow: National Accounts -> Gross Domestic Product by Expenditure Approach (2009 Base))

1.Gross domestic product in chain linked volume, index and percentage change by expenditure approach,1998-2017.

The first data table under spending approach contains the statistics in six different items:

1. Resident households and non-profit institutions serving households final consumption expenditure
2. Government final consumption expenditure
3. Gross fixed capital formation
4. Change in stocks
5. Exports of goods and services
6. Imports of goods and services

together with Nominal gross domestic product values, over 1998-2017.

I have created a figure using the GDP changes as follow (Figure-1). There were two drastic declines in nominal GDP, the first was in 2001 at -%6 and the second was in 2009 at -%4.7. The largest positive change was experienced in 2011 at %11.1.

2.Gross domestic product at current prices by expenditure approach (value, share, percentage change), 1998-2017.

The second data table in spending approach details the items in the first data table creating their share in nominal GDP and their percentage changes.

It seems, considering “GDP =  C  +  I_f  +  I_s  + G + XN“ equation the classification is made as follows:

• item A equals to Consumption (C),
• item B represents Government spending (G),
• item C is for Fixed Investment (I_f)
• item D represents Stock investment (I_s)
• items E&F together equal to Net export (XN)

All the five items in Figure -2 constitutes the GDP and equal to % 100. The share of consumption (C) has decreased over time, it was % 64.7 in 1998 and % 59 in 2017. On the contrary, the share of government spending (G) increased from %10.6 in 1998 to %14.5 in 2017. Fixed capital value fluctuated in the range of % 18.1 (2001) to % 30 (2017).

The share of net export remained negative most of the years, while having its largest values in 2011 at % 8.1, in 2013 at -% 5.8 and in 2010 at -%5.0. The share of stocks has been positive except three years.

To better analyze the foreign trade, I have created Figure-3, which shows GDP shares of export, import and net export over 1998-2017.

Lastly, Figure-4 shows the trends of household consumption and government spending over 1998-2017. A clear down trend in household consumption is easily identifiable. The difference between G and C have been gradually increasing.