Transcript Lesson 6 - Moodlerooms

Introduction to the System of
National Accounts (SNA)
Lesson 6
Capital Formation and Trade balance
Copyright 2010, The World Bank Group. All Rights Reserved.
1
Capital Formation has
three components:
Gross Fixed Capital Formation
Change in inventories
Acquisition less disposal of
valuables
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2
Gross Fixed Capital Formation (GFCF)
• “Gross fixed capital formation is measured by
the total value of a producer’s acquisitions,
less disposals, of fixed assets during the
accounting period plus certain specified
expenditure on services that adds to the value
of non-produced assets.” (SNA 2008, 10.33)
• The SNA definition, of capital formation coincides
with that of the 1993 SNA, although the scope of
GFCF in the SNA 2008 is wider than that of the 1993
version.
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3
GFCF as Share of GDP: 2005
China
Vietnam
Korea, Rep.
Thailand
India
Australia
Bangladesh
Syrian Arab Republic
Machinery and equipment
Indonesia
Building and construction
Japan
Uganda
Tanzania
Iran, Islamic Rep.
Argentina
Canada
Ethiopia
Malaysia
France
Mexico
United States
Pakistan
Russian Federation
Germany
United Kingdom
South Af rica
Egypt, Arab Rep.
Brazil
Philippines
0%
5%
10%
Copyright 2010, The World Bank Group. All Rights Reserved.
15%
20%
25%
30%
35%
40%
45%
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What does GFCF cover?
• Machinery and equipment:
– Transport equipment
– Other machinery and
equipment
– Animals yielding repeat
products
– Orchards and plantations
• Building and construction:
–
–
–
–
Dwellings
Other buildings
Other construction
Land improvement
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• Other GFCF
– Computer software
– Data bases
– Mineral exploration
– Intellectual property products
– Research and development
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Other types of GFCF to be
included
• These items may also be important in
some countries:
–
–
–
–
–
Animals
Plantations
Computer software
Mineral exploration
Land improvement
• Other items that are usually quite
small:
– Data bases
– Intellectual property products
– Research and development
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6
Sources and methods for GFCF
• Best sources:
– Government accounts
– Industry surveys and
censuses
– Agriculture surveys and
censuses
– Livestock censuses
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• Other “indirect” methods
– The dwelling stock grows in
line with the population;
– Imports of machinery and
equipment plus margins;
– Inputs of building and
construction materials plus
markups for labour , other
costs and profits.
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Changes in Inventories
• “Inventories may be materials and supplies held as inputs
by producers, output as yet unsold, or products held by
wholesale and retail traders. In all cases, additions to
inventories are recorded when products are purchased,
produced or otherwise acquired. Deductions from
inventories are recorded when products are sold, used
up as intermediate consumption or otherwise
relinquished.” SNA 1993 para. 3.104
• The «output as yet unsold» mentioned above includes
semi-finished goods.
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8
Practical advice on inventories (1)
Focus on the big ones
No country manages to cover changes in stocks
of every producer. But try to cover these :
– Government stocks
– Stocks held by power companies
– Rice, maize and food crops held by marketing
boards
– Stocks held by large retailers and manufacturers.
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9
Practical advice on inventories (2)
The problem of holding gains
• Depending on how inventories are valued the change
in inventories may include holding gains or losses
which in principle should be eliminated.
• In practice it is not possible to do this accurately.
• If you know the quantities at the beginning and end
of the period, revalue them using average or midpoint prices before calculating the change.
• If you only know the opening and closing values as
reported in company accounts, it is sometimes best
to do nothing. Accept the change as reported.
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10
Acquisitions less disposals of
valuables
• Valuables are precious metals, gem-stones,
antiques and other objects that are held as
“stores of value”. The owners hope that the
object concerned will at least keep its
inflation-adjusted value.
• Valuables were introduced in the 1993 SNA.
So far, only a few countries include estimates
in their accounts
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11
Estimating valuables
• Household expenditure surveys?
– Respondents will not say
• Commodity flow is one possibility. For
example:
– Production of gold
– Plus Imports of gold
– Minus exports of gold
– Equals net acquisition of gold by households
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12
Trade Balance
Imports
• Merchandise
• Services
Exports
• Merchandise
• Services
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13
Imports and Exports: points to watch
out for
• Unrecorded exports
– Timber
– Fish
• Unrecorded imports
– Smuggling
– Shuttle trade
• Mirror statistics?
– Country A’s exports to country B are country B’s
imports from country A
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14
What have we learned?
Gross fixed capital is a large
part of GDP(E):
– Direct measurement through
surveys or company and
government accounts;
– Indirect “commodity flow”
methods for building and
construction;
– Import statistics for
machinery and equipment.
Change in inventories:
– Focus on large inventories;
– Correct for holding gains only
if practical.
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Valuable:
– You must decide for yourself
whether to measure them.
Are they important in your
country?
Imports and exports:
– Trade in services is growing in
many countries. Don’t
overlook it.
– Think about unrecorded
exports and imports. You
may need to make some
adjustments to the data
reported by customs.
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