Transcript Document

National Accounts
ICP
Course on Price Statistics and ICP
Jakarta, Indonesia
5-9 June 2006
TIMOTHY LO
Statistician, International Comparison Program
Asian Development Bank
1
Role of national accounts experts
• ICP 2005 is a joint project involving both price
statisticians & national accountants.
• National accounts experts provide the expenditure
weights while the price statisticians provide the
prices.
• A main objective of ICP 2005 is to compare the
real GDP of participating countries; this requires
good estimates of the level of GDP in national
currencies.
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Starting Point for the ICP
• GDP is the starting point for ICP
• Expenditure on GDP is classified into at least 155
basic headings using four international classifications:
• COICOP for household expenditure
• COPNI for NPISH
• COFOG for government
• CPA/CPC for gross fixed capital formation
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SNA 1968 versus SNA 1993
• FISIM - Allocation to users in final consumption
intermediate consumption and exports
• Concept of actual final consumption for households
and government.
• Illegal production - now explicitly included
• Software and mineral exploration - gross capital
formation
• Military equipment - dual purpose equipment,
building and structures now part of fixed capital
formation
• Valuables - part of gross capital formation
4
1993 System of National Accounts
ICP 2005 based on the 1993 SNA, but some
approximations are inevitable. For example:
• Non-profit institutions may not be distinguished in
some countries
• Many countries will not be able to estimate
transactions in valuables, patented entities
• Most countries do not yet allocate FISIM to users
• Few countries estimate value added in illegal
activities
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ICP Key requirements
GDP must cover:
• Crops and livestock for own consumption
• Goods & services sold by “informal” or “unregistered”
producers (ex. food and drinks sold by itinerant
vendors; plumbers, builders, electricians; etc)
• Significant illegal activities - prostitution and drugs
• All government expenditures - for example, Military
forces, state and local expenditures
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Key requirements
• Imputed rent for dwellings built for own occupancy
can be constructed from traditional materials or
modern housing
• Software & mineral exploration (as gross fixed capital
formation)
• Significant NPISHs religious, international funded
organizations
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Expenditure on GDP
There are 7 main ICP expenditure aggregates:
• Individual consumption expenditure by households
• Individual consumption expenditure by NPISHs
• Individual consumption expenditure by government
• Collective consumption expenditure by government
• Gross fixed capital formation
• Change in inventories & acquisitions less disposals of
valuables
• Balance of exports and imports
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Main expenditure aggregates
1
Individual consumption expenditure by households
2
Individual consumption expenditure by non-profit institutions serving
households
3
Individual consumption expenditure by government
4
Collective consumption expenditure by government
5
Gross capital formation
Gross fixed capital formation
6
Change in inventories
Acquisitions, less disposals, of valuables
7
Balance of exports and imports
Exports of goods and services (plus)
Imports of goods and services (minus)
GDP Gross Domestic Product
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Expenditure on GDP
These are further divided into:
• 61 Groups
• 126 Classes
• 155 Basic headings (ICP BHs)
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Main Aggregates to Basic Headings
• An example of breaking Main Aggregates into
category, group, class and basic heading is shown
in the following link.
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Importance of Basic Headings
• Most detailed level for which weights are available
• They are the starting point for participating countries
to draw up regional lists of the specific goods and
services for which they agree to collect prices.
• The basic headings are used as the framework for
editing the reported prices
• The ICP organizers will calculate PPPs for the basic
headings before aggregating them to higher levels
for publication
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Examples of Basic Headings: Food
110000 Individual consumption of households
Main aggregate
110100.0 Food and non-alcoholic beverages
Category
110110.0 Food
Group
110111.0 Bread and cereals
Class
110111.1 Rice
BH
110111.2 Other cereals, flour etc.
BH
110111.3 Bread
BH
110111.4 Other bakery products
BH
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Actual individual consumption
• ICP 2005 will compare actual individual consumption
- not final consumption expenditure
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Who consumes? Who pays?
Households
Final consumption expenditure
Actual final consumption
Individual consumption
expenditure by households
Actual individual consumption
equals individual consumption
expenditure by households,
plus individual consumption
expenditure by NPISHs
plus individual consumption
expenditure by government
NPISHs
Individual consumption
expenditure by NPISHs
None
Government
Individual consumption
expenditure by government
Actual collective consumption
Collective consumption
expenditure by government
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equals collective consumption
expenditure by government
Actual individual consumption
Actual individual consumption of households
Equals individual consumption expenditure by
households
Plus
individual consumption expenditure by
NPISHs
Plus
individual consumption expenditure by
government
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Expenditure weights will refer to final
consumption expenditure
• Participating countries will need to supply weights for
final consumption expenditure FCE; this covers splits
for both household FCE and govt FCE.
• Conversion to actual final consumption will be done
by the ICP organizers.
• Participating countries will need to distinguish
between individual & collective consumption
expenditures of government.
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Individual consumption expenditure by
households
• Actual expenditures
– food, clothing, transport, rent, services….
• Imputed expenditures
– rents of owner-occupiers
– food & other goods for own consumption
– goods & services provided as income in kind
– FISIM (if allocated to consumers)
– Barter transactions
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Individual consumption expenditure
by NPISHs
• Non-Profit Institutions Serving Households (NPISHs) are
mainly funded by households - either residents or foreign
households.
• Examples:
– religious organizations (mosques, temples, churches,
schools, clinics, hospitals)
– trade unions
– political parties in multi-party states
– UNICEF, OXFAM, Red Crescent
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Individual consumption expenditure by
government
• Most expenditures on housing, health, recreation &
culture, education & social protection are individual.
• Two kinds:
– production of services by government for the
benefit of individual households
– purchase of goods & services by government from
other producers which are then passed on to HHs,
either free or at low cost (health & education only)
20
Collective consumption expenditure by
government
• Mainly falls under the COFOG headings of general
public services, defence, public order and safety,
economic affairs & environment protection
• Only one kind - the production of services by
government. Collective consumption does not
involve the purchase of goods & services for delivery
to households.
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Gross fixed capital formation (GFCF)
• Goods that are expected to be used in production for
several years
• GFCF is always measured net of sales
– sales for scrap, sales to abattoirs, exports of
second-hand assets
• 1993 SNA includes expenditures on software &
mineral exploration in GFCF
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Change in inventories
• Work in progress - construction, ships…
• Stocks of raw materials, finished goods, goods for
resale, goods stored by government as strategic
reserves, such as food and fuel.
• Estimates may not be comprehensive but should
cover important items such as food and fuel stocks,
stocks of mining companies, large retailers...
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Regional Progress on National Accounts
All countries have submitted GDP expenditure estimates at
BH level.
• 2 Countries submitted GDP expenditures for 2002
• 7 Countries submitted GDP expenditures for 2003
• 14 Countries submitted GDP expenditures for 2004
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Regional Office method of analysis
The expenditure estimates submitted were analyzed on
the following basis:
• GDP was checked for mathematical consistency i.e.
aggregate is equal to the sum of its components, GDP
equals 100
• Identification of extreme low/high values of
expenditures
• GDP per capita was compared at similar level of income
or geographical region
• GDP per capita compared across Asia and the Pacific
• Rank correlation was undertaken to assess the behavior
of the shares for GDP per capita.
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Thank You!
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