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1 COMPARABILITY OF SAVING AND PROFIT RATIOS OECD National Accounts Experts Meeting Chateau de la Muette, Paris 710 October 2023 2 Background ? Discussion of alternative household saving measures at October 2023 NAEM ? ECB/OECD project – Detailed examination of institutional sector accounts for the euro area, the United States and Japan with particular emphasis on household saving ratios, profit ratios and investment ratios ? Scope of this paper – Household saving ratios – Profit ratios 3 Household saving ratios ? Issues relating to the basic measure of the household saving ratio – Gross or ? – Include NPISH? – Change in equity of households on pension funds – Adjusted household disposable ine ? Proposed definition for use in OECD Statistical Databases (including Annex Table 24 of Economic Outlook) ? Further adjustments to the household saving ratio 4 Statistical Annex Table 24, OECD Economic Outlook ? Reproduced as Table 1 shows household saving ratios for 21 member countries ? Footnotes to this table indicate differences in the data currently being published for various countries ? OECD Economics Department tends to use measures for the household saving ratio and other variables that will be readily recognised in the member countries – Hence what is published by member countries in their own national accounts has an effect on international parability 5 Gross or household saving ? Net is the preferred measure ? Only use gross if COFC estimates are deficient ? Data for 7 countries is currently shown gross ? Remendation 1: It is remended that the seven countries (Belgium, Denmark, Italy, Portugal, Spain, Switzerland and the United Kingdom) include household saving ratios in their national accounts publications on a basis instead of, or in addition to, the gross measures. 6 Include NPISH ? Data for 5 countries currently exclude NPISH ? Remendation 2: In the interests of international parability it is remended that the five countries (Czech Republic, Finland, France, Japan and New Zealand) also include household saving ratios for households including NPISH in their national accounts publications. 7 Change in equity of households on pension funds ? Current definition: B8 / (B6 + D8) Where B8 = Net household saving B6 = Net household disposable ine D8 = Change in equity of households on pension funds ? Table 2 provides household saving ratios using this formula and data from the OECD annual SNA93 database ? Remendation 3: It is remended that countries that have a nonnil value for the adjustment for the change in equity of households on pension funds (D8) should verify that their own saving ratios are consistent with this definition. 8 Adjusted household disposable ine ? New concepts introduced in SNA93 – Collective and individual consumption for general government – Social transfers in kind – Actual final consumption – Adjusted household disposable ine ? New account in SNA93 – Use of adjusted disposable ine account ? These enable a more internationally parable household saving r