Úr þjóðarbúskapnum - 01.06.1962, Side 35

NATIONAL PRODUCT OF ICELAND
balances between the country and the rest of
the world. For all the years from 1951 these
total estimates are based on the balance of
payments estimates made by the Central Bank,
(formerly named the National Bank af Ice-
land).
In conformity with standard practise the
figures for exports and imports are based on
market prices, i. e. external prices converted
by the current official rate of exchange but
excluding all export premiums or subsidies.
But as export subsidies and roughly corres-
ponding special import duties have been appli-
ed most of the years, the ratios of exports and
imports to national product are hardly com-
parable between years. To measure these
relations on a uniform basis of valuation
either the constant price series of table 3
have to be used or account must be taken
of the amounts transacted by the subsidy
systems.
The official rate of exchange was changed
both in 1950 and 1960. For the year 1950 the
rate in force at each time is used, but for
the year 1960 the rate after the devaluation
(22nd February) is used.
National expenditure exceeds national pro-
duct by 3 to 6 per cent for all the years except
1946 and 1947, as already explained, and the
years 1954 and 1958, but for those years the
difference is only 0.6 per cent and 1.5 per
cent respectively. Account should liere be
taken of the distortion of the comparability
of the figures for external trade. If the per-
centages in line 4 of table 2 are calculated
according to the corresponding line of table
3, at constant prices, for the years 1956 to
1960, the following comparison results:
National expenditure as
percentage of GNP: 1956 1957 1958 1959 1960
a) according to table
2 ................. 103.2 103.1 101.5 103.1 105.1
b) as calculated from
table 3 ........... 103.6 102.6 102.8 106.1 105.4
The difference is mostly caused by the rela-
tive importance of export premiums in 1954
and in the respective years.
Tlie market value of gross national product
is related to its factor cost value by the addi-
tion of subsidies and subtraction of indirect
taxes. Subsidies for capital formation or any
other grants not directly related to production
or services are not included. The ratios of both
subsidies and indirect taxes to national pro-
duct have been increasing almost throughout
the period. The most important exceptions are
those of 1950 and 1960 as in both of these
years the then existing exports subsidy systems
were abolished. Neither of these years shows,
however, a clear picture of the national econ-
omy free from any system of export subsidies.
Correcting for the amounts relating to the ex-
port subsidy system in 1960 subsidies are 6.4
per cent and indirect taxes 21.8 per cent of
GNP. It should be noted that in the year 1960
some structural changes occurred in the tax
system, as a part of the taxation shifted from
direct to indirect taxes.
As the net result of these transactions, of
subsidies and indirect taxes, the factor cost
value of GNP has been about 88—93 per cent
of the market value except in 1960 when it
was only 80 per cent. Thus the net indirect
taxation has been between 7 and 12 per cent
af the market value except for the last year,
1960, when it was 20 per cent. The greater
stability of the factor cost value vis-a-vis
structural changes in the tax system is clearly
seen by comparing the years 1959 and 1960.
The market value increased by a thousand
million kronur, whereas the factor cost value
remained almost unchanged, and so did the
gross national product at constant market
prices.
Depreciation allowances are estimated on
the basis of studies in the national wealth
undertaken by the Iceland Bank of Develop-
ment. These estimates are least reliable for
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