Transcript Power Point Presentation

Session II
Supply-use tables as a
framework for annual and
quarterly accounts
Workshop on national accounts for Asian member
countries of the organization of Islamic Conference
Ankara, Turkey
1-2 December 2008
by
Devi Manraj
IMF Regional statistics advisor
[email protected]
Why use the SUT framework ?




Use of SUT framework ensures internally consistent
data for each activity and product category.
Data from different sources appear in a systematic
and organized fashion
Allows the compiler to eliminate inconsistencies and
to identify and fill in data gaps
Allows compilation of more reliable values for GDP
than those obtained by calculating GDP from the
production, expenditure or income side separately
2
Use of SUT

SUT can be used as a compilation tool
because the overall framework facilitates:
– data checking/reconciliation.
– gap filling.

A number of countries treat SUT as
central to their compilation process, not
just as an irregular add-on needed to
derive input-output tables.
3
The Supply Table
The supply table contains
Two transaction columns:

Output at basic prices

Imports c.i.f. and
Three adjustment columns:

Taxes on products.

Trade and transport margins; and

C.i.f./f.o.b. adjustments.
4
The Use Table
The use table includes:

Intermediate consumption;

Final consumption;

Gross capital formation; and

Exports.
These transactions are valued at purchasers’
prices; i.e. the valuation includes taxes on
production and imports, as well as trade
and transport margins for each individual
set of numbers.
5
Valuation of Transactions
Equality of supply and use
– Supply at basic prices
Plus
– Taxes less subsidies on products (Including
nondeductible VAT)
Plus
– Trade and transport margins
Equals
– Supply at purchasers’ prices
Equals
– Use at purchasers’ prices
6
Supply table
Output of industries
Agriculture
Supply of
products
(1)
1 Agricultural
products
300
2 Manufactur
ed products
25
3 Trade and
transport
services
Manufacturing
Trade
and
transpo
rt
(2)
(3)
930
10
45
305
4 Other
services
20
Other
service
industri
es
(4)
Govern
ment
(5)
5
295
5 Governmen
t services
340
All
industri
es
325
975
335
300
340
Total
supply
, basic
prices
Trade
and
transpor
t
margins
Taxes
on
products
Subsidie
s on
products
Total
suply
purch
prices
(6)
(7)
(8)
(9)
(10)
(11)
(12)
300
165
465
30
20
-5
510
970
310
1280
175
100
350
35
385
-205
10
315
85
400
340
6 Direct
purchases
abroad
7 TOTAL
Imports
of goods
and
services
2275
1555
-20
25
170
425
340
340
70
70
70
665
2940
0
155
-25
3070
7
Intermediate consumption of industries
Use table
Agriculture
Manufa
cturing
Trade
and
transpo
rt.
(1)
(2)
(3)
Other
service
industri
es.
Govern
ment
Final uses
All
industri
es
Final
cons
households
Final
cons
govern
ment
(8)
Gross
fixed
capital
form
Total
final
use
Total
use,
purch
ase
prices
Change
s in
inventories
Exports of
goods
and
services
(9)
(10)
(11)
(12)
(13)
(4)
(5)
(6)
(7)
10
5
275
85
5
-25
170
235
510
260
10
280
995
1555
15
55
170
110
275
425
325
340
40
70
50
0
0
625
1925
3070
1
Agricultural
products
20
240
2
Manufactured
products
85
305
105
25
40
56
445
3
Trade and
transport.
services
30
40
15
10
20
115
40
4
Other services
25
70
5
20
30
150
135
20
5
Government
services
5
5
5
15
20
305
6
Direct
purchases
abroad
10
5
5
30
40
7
Dir. purchase
by nonresidents
8
TOTAL
160
670
135
75
105
1145
9
Gross value
added
165
305
200
225
235
1130
10
Compensation
of employees
50
145
90
105
190
580
11
Other taxes on
production
5
25
10
15
15
70
12
Other subsidies
-10
-5
13
Operating
surplus/mixed
income
120
140
100
105
30
495
14
TOTAL
325
975
335
300
340
2275
10
10
-50
715
325
275
-15
-15
8
Derivation of Supply Table
at basic prices

Market output
= Sales
+ Change in inventories (FG and WIP)

Non-market output (= Cost of production)
=
+
+
+
Intermediate consumption
Compensation of employees
Other Taxes less subsidies on production
Consumption of fixed capital
9
Derivation of SupplyTable
at basic prices

Intermediate consumption
= Purchases
- Change in inventories (materials)

Value added
= Output
- Intermediate consumption
Operating surplus
= Value added
- Compensation of employees
- Taxes less subsidies on production
- Consumption of fixed capital

10
Transport Margins

When is the cost of transportation to be treated
as a transport margin?

Transport margins consist of transport charges
paid separately by the purchaser to take delivery
at a required time and place (SNA 15.28)

If not paid separately, the transport cost could be
included as part of the basic price of the good,
part of the wholesale or retail margin, or as an
expense of the purchaser.
11
Trade Margins

A trade margin (wholesale or retail trade)
applies only when there is a distribution
service provided by the trader through
buying and reselling a product.

A trade margin does not apply to direct
sales by a producer, even when the sales
are to households.
12
Trade Margins

Trade margin is defined as the difference
between the selling price of the good for
resale and the price that would have to
be paid by the distributor to replace the
good at the time it is sold.

The trade margin is the output of the
distributor. As with other producers,
value added is obtained by subtracting
intermediate consumption.
13
Trade Margins

Broadly, the trade margin is calculated as:
– Sales
– less purchases of goods for resale
– plus change in inventories for resale
– Note: purchases of goods for resale should exclude
any transport charges invoiced separately to the
distributor; such transport charges are to be shown as
intermediate consumption of the distributor. (SNA
6.112)

The trade margin is part of the difference between the
basic price of a good and its purchasers’ price.
14
Trade Margins

Data sources for trade margins:
–
–
–
–



Total margin earned from establishment data.
Margins for broad commodity groups.
Markup rates for particular kinds of goods
Supply/use of the goods subject to the margin.
Balancing process to fit available, but incomplete, data.
Much prorating in practice.
Separate margin calculations for wholesale, retail, and
other? Yes, if different usage patterns and data
available to do so.
15
Treatment of Imports

Consistent with the Balance of Payments
Manual in valuing imports of goods in total on a
f.o.b. basis, and to show international
transportation as a service.

However, in the Supply/Use framework, imports
at the commodity level are valued on a c.i.f.
basis (including international transportation).

A c.i.f./f.o.b. adjustment is made in the Supply
table to accommodate these two valuation
bases, and to ensure that domestic carriage of
imports is not double counted.
16
Treatment of Imports

Example of c.i.f./f.o.b. adjustment:
– Assume imports
c.i.f. = 1,000
f.o.b. = 900
– International transportation = 100
– Domestic carriers
= 20
– Foreign carriers
= 80
– Assume domestic transportation to the user =
30
17
Treatment of Imports

Therefore,
– imports of goods f.o.b.
– imports of services
– Domestic services = 20 + 30
– Supply at purchasers’ prices

= 900
=
80
=
50
= 1,030
The c.i.f./f.o.b. adjustment ensures that
these values are reflected in the Supply
table.
18
Steps for compilation of SUT

Step 1: Design of classifications and
conversion keys specific to the country.
Conversions are best carried out in Access.
Results are subsequently imported to Excel

Step 2: Construction of files where data from
individual sources are treated

Step 3: Setting up of a computerised system
for the balancing of supply and use by product
category
19
Balancing supply and use
transactions consists of two main
steps:
1. Manual balancing:
 Requires a great deal of judgment of the national
accountant.
 Procedure is largely a matter of trial and errors where
statistical discrepancies are eliminated step by step.
2. Mechanical balancing:
 Final part of the balancing exercise and requires no
further judgment on the part of the national
accountant.
 It is not done until remaining discrepancies are so
small that they are devoid of economic or analytical
meaning.
20
Examples of adjustments within
the manual balancing process

Evaluate input / output structures of all columns to
identify data gaps, and checking potential coding and
classification problems (activity or vertical dimension);

Identify anchors – i.e. identify which transactions are
most reliable, and therefore least subject to change.

Analyze and gradually eliminate discrepancies between
supply and use for all rows of the SUT (product or
horizontal dimension);

Finalize adjustments to input / output structures by
activity, and make conclusive checks of product
balances.
21
Adjusting imports and exports

Importers have an incentive to underinvoice. In addition, it is very probable
that some smuggling occurs.

For exports, the incentive to underinvoice is weaker. It might be relevant to
increase export data as well, but usually
with a smaller percentage increase.
22
Other adjustments

Identifying values for capital formation

Identifying products that serve as inputs into
other product categories

Identifying purchases abroad (missing
exports)

Identifying informal sector activities
23
SUT compared to
Input-Output Tables
Supply and Use Tables
Input-Output Tables
Rectangular
Product x Industry
Square
Industry x Industry
(Product x Product)
Model-building
Compilation tool (reconciliation,
data generation)
Model-building
More oriented to
observable data
More derived data (e.g.,
homogeneity, single
assumptions)
24
SUT compared to
Input-Output Tables
Supply and Use
Tables
Input-Output
Tables
Any countries
Statistically advanced
countries
Add-on to national
accounts compilation
Central focus of national
accounts compilation
25