Gross Domestic Product (GDP) is an economic indicator that reflects the value of end-user goods and services produced by resident units in a country during a given period of time (usually a quarter or a year). These resident units include companies, banks, public administrations, and households.

The GDP represents the wealth generated, calculated as total production minus the intermediate consumption necessary to obtain it; that is, without the goods and services that were needed in the production process.

The GDP is the primary indicator for understanding the activity and size of a country's economy.

The GDP summarises economic activity in a single figure and allows us to evaluate the overall performance of the economy and the results of economic policies. Its main uses include:

• International comparability: Being harmonised allows for comparison of the size of the economies of the European Union.
• EU budget: Much of the contribution of Member States to the budget of European institutions is based on their GDP.
• GDP per capita: Dividing the GDP by the population yields a measure of the development of countries or regions, used for the distribution of European funds.

The GDP is calculated in accordance with the European System of Accounts (ESA), a mandatory EU regulation that ensures that data is accurate and comparable across the EU. 

The calculation of the GDP consists of compiling and synthesising information from various statistical producers (Customs, Bank of Spain, Ministries, etc.) through the National Accounts of Spain.

The calculation is performed by seeking the balance between the supply and demand of goods and services. For each product, the total supply (production and imports) is balanced with the total demand (consumption, investment and exports).

To ensure the accuracy of the GDP, three approaches are used in its calculation:

• PRODUCTION APPROACH:

  GDP = Production - Intermediate consumption + Taxes on products, net of subsidies.

  This reflects how a country's wealth is generated.

• SPENDING APPROACH:

  GDP = Final Consumption + Investment + Exports - Imports.

  This reflects how a country's wealth is used.

• INCOME APPROACH:

  GDP = Remuneration of labour + Remuneration of capital + Taxes on production and imports, net of subsidies.

  This reflects how a country's wealth is distributed among the various stakeholders in the economy.

The difference between the nominal and the real GDP lies in the price variation of changes in production.

Thus, nominal GDP growth measures its increase, including the effect of rising prices.

And real (or volume) growth is obtained by eliminating the price effect, thus reflecting the real increase or decrease in the volume of goods and services produced. This is the data used to measure the evolution of the real economy. 

Up to 12 GDP publications are produced each year:

• The Quarterly National Accounts (QNA) issue 8 publications a year (two per quarter) to measure the current evolution of the GDP.
• The Annual National Accounts (ANA) issue two annual publications of the Supply-Use Tables. These offer a snapshot of the GDP with greater detail and precision.
• The Regional Accounts issue two regional GDP figures per year. These detail the evolution of the GDP at the level of Autonomous Communities and provinces.

In these three operations, in addition to the GDP, spending components (such as consumption, investment, exports or imports), value added from the different branches of activity, and the income generated by the economy and institutional sectors are estimated.

The methodology is governed by a European regulation that has been mandatory for all EU member states since September 2014. This ensures that the indicators are accurate and fully comparable between countries.

Furthermore, the European Commission, through Eurostat, periodically audits these parameters to ensure their quality.

The INE uses a wide variety of sources to calculate the GDP and its aggregates. 

Many of these are sources from the INE itself, such as the Household Budget Survey, the Structural Business Surveys, the Economically Activity Population Survey, production data and business figures for Industry, retail sales, data on activity in the services sector, tourism surveys, etc.

It also uses surveys and administrative records from other bodies (such as the Bank of Spain, the Spanish Tax Agency or the General Intervention Board of the State Administration [IGAE]).

The inventory of sources and methods includes all the statistical operations and records used in the preparation of the GDP.

• Annual Accounts
• Quarterly Accounts

It is a coordinated process across the EU to incorporate improvements in estimation methods and new sources of information.

There are two types of reviews.

• Routine reviews: These are carried out annually to incorporate more detailed data as it becomes available.
• Extraordinary reviews: These are carried out every five years to ensure the consistency and quality of the historical series. These reviews may also include methodological changes -always harmonised at the European level- with the aim of improving the accuracy and reliability of the estimates.

All GDP results -quarterly, annual and regional- are available in INEbase: 

• Results of the Quarterly National Accounts
• Results of the Annual National Accounts
• Results of the Regional Accounts

All information on GDP -including the glossary of terms, the inventory of sources and methods, and detailed methodological documents- is available at INEbase: 

• Quarterly National Accounts methodology
• Annual National Accounts methodology
• Regional Accounts methodology