Domestic Demand, Private Consumption, Public Consumption, Gross Fixed Investment Relationship

Question

I'm reading the IMF's January 2016 Report on Sweden's Economic Indicators, and the top section has the following:

Domestic Demand (2012) Percent Change: -0.6

Indented below are:

Private Consumption (2012) Percent Change: 0.8

Public Consumption " ": 1.1

Gross Fixed Investment " ": -0.2

I think the final one, Gross Fixed Investment, is the same thing as Gross Fixed Capital Formation? Although if someone could clarify, that would be useful.

My main question is, should Private Consumption, Public Consumption, and GFI all equal to Domestic Demand? My thinking was that domestic demand constituted these three elements (hence why they were indented), and some sort of weighted combination of them should give the -0.6% change drop in domestic demand?

Answer 1

I assume your numbers come from the 2012 numbers on page 4 or 5 of this document, which are rather different to the 2012 domestic demand numbers the IMF published a year earlier on page 28 or 29 of this document (the earlier version had domestic demand increasing in 2012 by 0.3% rather than decreasing by 0.6%)

They do look curious, for the reason you give.

Digging into Statistics Sweden's website, there are figures for various selected components of the expenditure measure of GDP. It is particularly noticeable that in 2012, gross fixed capital formation fell by 0.2% while gross capital formation fell by 5.0%.

So an explanation could be a dramatic in the difference between gross capital formation and gross fixed capital formation. This difference could include changes in inventories and changes in valuables: there seems to have been a fall in inventories in Sweden in 2012 after a large rise in 2011 and it is the combination of these two which leads to the sharp fall in gross capital formation in 2012 and so the fall in domestic demand.