The System of National Accounts (SNA) underpins the global economy.
The SNA describes the agreed definitions and measurement requirements that are the foundation for the coherent and internationally comparable macro-economic information sets on which economic actors rely. Based on the SNA, countries measure a wide range of economic indicators, including:
- gross domestic product (GDP)
- household saving
- business investment
- national wealth
Countries can use these headline indicators, and the structured underlying data, to assess the health of their economies and to build models of future economic activity.
The SNA is a massive document, coming in at 900 pages with nearly 40 chapters.
To get a sense of the scale and importance of this document, take a peek at this list of countries that use the SNA and contribute to international datasets based on its definitions.
The United Nations Intersecretariat Working Group on National Accounts (ISWGNA) manages the SNA. Over the past 70 years, national accounts experts have progressively refined the SNA from its first edition in 1953, making it a robust and substantial document for countries to use to ensure they comply with globally agreed measures of economic performance.
Over the past four years, the ISWGNA has been overseeing an update of the current version – SNA 2008. Important update topics include accounting for natural resources and recognizing the costs of its depletion, improved measurement to incorporate changes due to digitalisation and globalisation (for example the treatment of cryptocurrencies and NFTs), the treatment of Islamic finance, and the measurement of the informal economy.
However, most significantly, the updated SNA – SNA 2025 – will considerably expand its discussion of well-being and sustainability. The ISWGNA has proposed three new chapters , including an upfront new Chapter 2, that recognise the:
- relevance of measurement ’beyond GDP’
- potential for broadening and enhancing traditional national economic accounts
- importance of complementary data on natural capital, including ecosystems and nature, human capital, social capital, distributions of income and wealth, expenditure on education and health and unpaid household service work.
The organisation of data on all these topics using accounting principles has been a long-standing area of development but the formal recognition of this work within the SNA itself is long overdue.
For those familiar with the wider discussion on well-being and sustainability, this development in the SNA aligns very well with other developments over the past decade including the Sustainable Development Goals and many other initiatives where businesses and governments are moving progressively towards accounting for human, social and natural capital and the benefits that are essential for our well-being.
An important driver feeding into the expanded discussion on well-being and sustainability has been the development and widespread uptake of the United Nations System of Environmental-Economic Accounting (SEEA). The SEEA is a strong conceptual and statistical framework aligned with the SNA for measuring the state of the environment and its connection to economic activity. And nearly 100 countries around the world are using the SEEA, including the USA, Canada and Australia.
Our Director, Carl Obst, who has led the drafting of the three new chapters on well-being and sustainability, says: ‘For some people, the updates to the SNA will not go far enough toward measurement beyond GDP. However, the explicit recognition of accounting approaches for well-being and sustainability in the SNA is a significant step forward in mainstreaming the measurement of these issues and driving more holistic discussions within economic and financial circles. In this respect, the inclusion of natural, human and social capital alongside economic capital is also a significant advance. And the links to the SEEA give countries even more reasons to embrace the SEEA framework for measuring natural capital.’
The ISWGNA is currently seeking feedback on the revisions to the SNA. The consultation process is open until 13 September 2024.
The revised version of the SNA is due to come into effect in 2025.
