GDP Quarterly National Accounts: 2023 Quarter 2 (April to June)

GDP (or GDP per person) is the most widely known indicator of economic activity and is frequently used to make comparisons between places or over time. There are also a range of other measures which can be used to indicate different aspects of economic activity and wellbeing.

Within this publication, Gross Disposable Household Income is the most comprehensive direct measure of the money earned by people in Scotland, including income earned in other parts of the UK or abroad, and accounting for transfers such as pensions, taxes and benefits.

Gross National Income (GNI) is a measure which accounts for income flows between countries or territories for all sectors of the economy, such as outflows of profits generated by foreign owned companies. Experimental estimates of GNI and primary income flows for Scotland up to 2021 are available.

Labour productivity statistics, which report GDP per job or per hour worked are available up to 2022.

Looking beyond GDP and the economy, Scotland’s National Performance Framework (NPF) includes a range of economic, social and environmental indicators which give a wider indication of national wellbeing. Further information can be found at nationalperformance.gov.scot.

Gross Disposable Household Income (GDHI)

Gross Disposable Household Income (GDHI) is a measure of how much money the population has for spending or saving after earnings and transfers such as pensions, taxes and benefits are accounted for. GDHI includes income earned in other areas of the UK or from abroad (for example, offshore workers’ income or income from overseas investments) which are not part of onshore GDP.

In 2023 Quarter 2, GDHI is estimated to have increased by 6.8% in nominal terms (without adjusting for inflation) over the year compared to 2022 Quarter 2. The largest part of GDHI is income from employment, which is up by 7.1% over the year. In the latest quarters there has also been a sharp increase in the value of social benefits received due to rises in line with inflation.

Household Savings Ratio

The household saving ratio was 4.9% in the latest quarter, up from 4.5% at the same point last year. This upward movement was driven by increases in the total value of social benefits and earned income, leading to the total value of resources available for spending or saving increasing by 7.7%. This has outstripped the estimated 7.2% increase in the value of household expenditure, which means that savings have increased. Whilst the savings ratio has risen over the last year, it has fallen back from much higher levels in 2020 and 2021 when expenditure was constrained, and is now slightly below pre -pandemic levels.

The household saving ratio represents funds which are available for adding to savings, including in pension funds, or paying off debt. It is not a measure of actual deposits made to savings accounts, or of savings accounts balances, but is a useful indicator of trends in overall household finances, and has been strongly impacted during the coronavirus pandemic.