Changing the Price Adjustment Method in the Austrian National Accounts

In line with a decision made by the European Commission, Austria is required to change the method of computing its national accounts and use the previous year's price base. A key problem of the previous fixed base year method was that shifts in relative prices over time were not taken into account. Over the course of several years, this resulted in ever greater distortion in representing the "real" economic development. According to the new computing method, the additive property no longer applies, i.e., the sum of price-adjusted components no longer corresponds to the value of the aggregate. With its reference year of 2000, the new computation published by Statistics Austria in the autumn of 2004 reaches back to 1988 and shows that past economic growth was different than formerly assumed. WIFO will publish the new quarterly series by the end of 2004.