The national accounts in 2014National accounts - Base 2010
Rest of the world in 2014National accounts - Base 2010
Rest of the world (S2)
The rest of the world sector is a grouping of non resident economic units that are engaged in transactions or have other economic links with the resident institutional units. Only units that are engaged with the domestic economy within a given year are taken in consideration: thus, the rest of the world account does not retrace the whole world activity made beyond French borders.
Rest of the world is geographically broken down according to the following classification:
- member states, institutions and bodies of European Union,
- third countries (including overseas territories) and international organizations.
The rest of the world account describes all the relations between national economy and abroad: exchanges of goods and services, exchanges of income and other transfers. Theses flows are recorded in the non-financial accounts by sector table from the rest of the world's point of view: a resource for the rest of the world is a use for the national economy, and vice versa. Likewas, a financial asset owned by the rest of the world is a liability for national economy, and vice versa. The sequence of the rest of the world accounts includes three accounts.
External account of goods and services
It retraces flows of imports and exports of goods and services. Imports are resources for the rest of the world, exports are uses. To assure consistency with the measure of the basic price of national production, the value of imports of goods does not include taxes, free of subsidies, on imports. As they are recorded globally, imports are valued FOB, like exports, i.e. at the frontier of the exporting country. The balance of this account is the "external balance of goods and services".
External account of primary income and current transfers
It retraces all the allocation of income operations leading to transfers between the rest of the world and the national economy. This account is a condensed version of the sequence, for an institutional sector, extending from the allocation of primary income account to the use of income account.
The balance of this account is the "current external balance" that corresponds to saving in resident institutional sectors'accounts: it corresponds to the saving resulting for the rest of the world from the current transactions engaged with the national economy.
It retraces acquisitions and disposals of non-produced assets operated between resident and non resident units, exchanges of transactions relative to investment grants, to writing-off of debts and to migrant workers transfers. The balance of this account is the net lending/borrowing of the rest of the world; it is equal, but with the opposite sign, to that of national economy.
From domestic product to national income and to national lending/borrowing
National income is obtained by adding to domestic product the wages and property income received from the rest of the world, and subtracting the corresponding amounts paid to the rest of the world and the balance between subsidies and taxes on production and imports, received from - or paid to - the rest of the world.
National disposable income is then obtained by adding to national income the balance of other current transfers (taxes on income and assets, social benefits, etc.). National lending (or borrowing) is obtained by subtracting from this last balancing item the final consumption expenditure, gross fixed capital formation, change in inventories, acquisitions less disposals of valuables and the balance of current capital transfers received from - or paid to - the rest of the world.