Regional gross product: structure, volume, calculation

The economic status of each subject of the Russian Federation makes actual use of a variety of tools for assessing economic welfare, financial balance and competition conditions, not only on the domestic market, but also on the world market. These instruments are extremely necessary for the implementation of an effective federal policy aimed at eliminating inter-regional disproportions, strengthening the integrity of the economy and politics. The autonomy of the regions leads to the actualization of regional policy and to the importance of such an indicator as the regional gross product.

Information support with the help of GRP

Prosperity of budgetary federalism becomes a desire to develop regional management solutions with modern approaches to information support and economic feasibility. An optimal basis for analyzing the characteristics of a market economy of a complex type is the system of national accounts, or SNS. At the regional level, the SNA acts in the format of the CDS (regional accounts system). The central position in the SNA belongs to the gross domestic product, or GDP. The regional analogue of GDP in the SNA is a regional gross product, or RVP. This indicator shows the level of economic development, is a kind of reflection of the results of economic activity of each of the economic entities within the region. GRP is used as a basis for the formation of regional accounts.

Why is GRP calculated?

On the territory of Russia there are about 89 administrative-territorial entities, localized in different time zones, differing in geographical location and level of economic and social development. GDP reflects only the overall situation in the country, not giving a clear picture of how things are in different parts of the country, which excludes the possibility of making objective decisions. The state is interested in data that can comprehensively characterize the situation in each separate corner of the country.

The differentiated information, the source of which is the regional gross product, allows us to work out an appropriate economic policy and assess the effectiveness of the decisions taken not at the country level, but at the regional level. With the help of GRP dynamics, in combination with cost and natural indicators, it is possible to establish the direction and intensity of economic processes that can serve as a strong impetus to development at the interregional level. GRP plays an important role in the calculation of macroeconomic indicators and in the reform of interregional relations. The indicator serves as a guide in the process of allocating funds from the "Fund for Financial Support of Subjects of the Russian Federation".

So what is GRP?

The regional gross product is, in fact, a generalized economic indicator that characterizes the level of economic development of the region. It reflects and characterizes the process of production of goods and services. The GRP volume indicates the value of all goods and services produced in all economic sectors in a particular region. At the first stages of introducing the indicator into the economic analysis, the data were published taking into account market prices. The estimation of GRP in the format of the basic prices differs significantly from the estimation in the market by exactly the amount of net taxes on products. Subsidies are not taken into account. GRP in the dominant shops reflects the sum of the added values in the basic prices with an orientation to a certain type of economic activity.

The structure of GRP, or What it includes

The gross regional product is calculated taking into account the basic price, which is calculated per unit of goods or services. Taxes are not taken into account, but subsidies for products are taken into account. Gross value added is calculated in each separate segment of economic activity as the difference between the release of goods or services and their intermediate consumption. During the reporting period, the total price of the release of goods and services within a single region is the volume of output. The issue includes already sold goods with services at market value. The average is used for the calculation. Incomplete production is accounted for in gross production, but only at cost. Intermediate consumption includes the value of goods with services that are fully used in production during the reporting period. The fixed capital for calculating intermediate consumption does not matter. Expenses for the final use of GRP include expenditures for households, state institutions, and collective services. Estimating the volume of the gross regional product and its structure, you can determine the sources of financing of final consumption.

Calculation options

In today's economy, it is customary to use several options for calculating GRP. The production method for calculating the indicator is used at the production stage. It is, in fact, the sum of gross value added, which is formed by each institutional unit-resident in the region's economic territory. The gross regional product, calculated on the basis of the difference between the output of goods and services and their intermediate consumption, is formed on the basis of prices for goods and services fully consumed during production, is carried out at the level of branches and sectors of the economy of the region. GRP can be calculated and based on current market prices through their comparison.

The difference between GDP and GRP

The gross regional product, which is calculated for each of the regions, has significant differences from GDP. The difference between indicators is the amount of added value. Here you can include:

• Non-market collective services of state bodies: defense, management.
• Non-market services, which are financed from the budget, but information about them is not available at the regional level.
• Services of financial institutions, whose activities almost always go beyond one region.
• Services related to foreign trade, data on which are collected at the Federal level.

Gross product: characteristics of the indicator

The difference between GDP and GRP is formed by the cost of paying taxes in connection with imports and exports. This amount is very difficult to calculate due to its specificity and uneven integration between individual regions. Gross regional product by region is calculated over a period of 28 months. The SAC method allows you to get a faster result. The government uses a variety of mechanisms to track the dynamics and growth of the indicator. It is interesting that in sum all GRP indicators do not correspond to GDP, which is determined by the specifics of calculations and the elimination of added costs.

Based on what data GRP is calculated?

The multifaceted structure of the gross regional product determines the simultaneous use of a large number of sources for calculating parameter values. So, in the CIS countries, experts take into account the registers of enterprises and reports on the production and sale of goods with services, reports on the costs of production. We take into account selective surveys and special reports of the regional level. The calculation is based on employment reports and on the basis of surveys of each individual segment of the economy, based on a survey of household budgets. Significant sources of information are data from tax authorities and banking statistics, reports of public organizations and data on the implementation of various types of budget.

GRP in the practice of Russia

Gross regional product by regions of Russia in full characterizes the level of development of the region and is compared with the indicators of the macrolevel. It plays the role of a territorial factor in the development of social and economic processes. The calculation of the value is based on the methodological principles of the SNA, the development of which was carried out within the framework of the FSSS. Publication of results after their preliminary approval is also carried out at the FSSC level.

Forecasting of the gross regional product is carried out on the basis of data collected from all residents of the regional economy. It can be corporations, quasi-corporations and households, whose center of economic interest is located directly in the region under consideration. For the first time, the calculation and analysis of the gross regional product was carried out in 1991 to 21 regions. Since 1993, all regional and territorial authorities have taken part in the calculations. Since 1995, assessment and calculation of GRP is a prerequisite for the implementation of the "Federal Program". Only since 1997 the estimation of dynamics of an indicator has begun. It gives grounds for implementing the correct economic policy in the sphere of production and industry, which in all regions account for 60 to 80 percent of the total GRP.