Subsidies are current payments by the general government or European Union institutions to resident producers that are not required to be reimbursed. The overriding goal is to influence levels of production or prices, or to compensate producers for production costs.
Subsidies (D.3 in national accounts) are broken down into two main categories:
- subsidies on products (D.31) and
- subsidies on production (D.39).
In national accounts, ESA 2010 defines subsidies (D.3) as "current unrequited payments which general government or the institutions of the European Union make to resident producers. The following are examples of the objectives of giving subsidies:
- (a) influencing levels of production;
- (b) influencing the prices of products; or
- (c) influencing the remuneration of the factors of production."