KEY AGGREGATES

GDP

Following the fall in GDP in volume terms in 1990-91 and a flat result in 1991-92, there have been 16 years of consecutive growth. In 2007-08 GDP increased by 3.7%. For some analytical purposes it is important to understand the impact of population growth on movements in GDP. In 2007-08, GDP per capita increased by 2.1%. Growth rates in GDP and GDP per capita are presented in the following graph.

RNNDI

Another measure of national economic well-being is Real net national disposable income (RNNDI). This measure adjusts the volume measure of GDP for the Terms of trade effect, Real net income from overseas and Consumption of fixed capital (depreciation). In 2007-08, RNNDI (up 4.6%) grew more strongly than GDP, reflecting strong growth of 5.3% in the Terms of trade (see International Trade).

Household saving

The Household saving ratio is another key aggregate in the national accounts. Household saving cannot be measured directly. It is calculated by deducting Household final consumption expenditure from Household net disposable income.

The Household saving ratio began trending downwards in the mid 1970s, and was negative from 2002-03 to 2005-06, implying that households spent more than they earned during that period. In 2006-07, the Household saving ratio became positive again (at 1.9%) and this has continued into 2007-08 with another positive Household saving ratio (0.6%).

Caution should be exercised in interpreting the Household saving ratio in recent years, because major components of household income and expenditure may be subject to significant revisions. Commentary on Income from GDP provides some additional information on Net saving by sector.

Productivity

The index of Market sector Multifactor productivity (MFP) on an hours worked basis, fell 0.4% in 2007-08, reflecting a 3.8% increase in Gross value added for the Market sector against an increase of 4.3% in total labour and capital inputs. Hours worked in the market sector increased by 2.7% in 2007-08, resulting in labour productivity growth of 1.1%. Capital services continued to grow in 2007-08, recording a strong growth rate of 6.3%. The increase in Capital services was more than the increase in Gross value added, resulting in a fall of 2.3% in capital productivity.