GDP REASING - statisticsmaldives.gov.mvstatisticsmaldives.gov.mv/.../2017/11/GDP-Leaflet.pdf · GDP at current prices in the year 2014 for 2003 based series is MVR. 47,590 mil-lion,

GDP REBASING

NATIONAL BUREAU OF STATISTICS MINISTRY OF FINANCE AND TREASURY

(BASE YEAR 2014)

2

GDP REBASING OF MALDIVES

What is Gross Domestic Product (GDP)

Gross Domestic Products (GDP) is the value of all final goods and services pro-duced within a country in a given period of time. The GDP can be measured using three approaches which are production, expenditure, and income that are pre-sented at current and constant prices.

GDP at current prices or nominal GDP is estimated by using the prices at the ac-counting period and aimed to describe the economic structure. GDP at constant prices or real GDP is estimated using the prices at a reference year and designed to measure the economic growth rate.

=

=

GDP by production approach (GDP [P]) Y= GVA + (T-S)

is defined as the difference of gross value of goods and services produced less the value of raw material used as input (intermediate consumption)

plus any taxes and less any subsidies on products.

GDP by expenditure approach (GDP [E]) Y = C + I + G + (X − M)

is the sum of consumption expenditures by households ,Non Profit Institu-tions Serving Households (NPISHs), government expenditures, investments

and exports less imports of goods and services.

GDP by income approach (GDP [Y]) Y= COE + OS + CFC + (T – S)

Is the sum of compensation of employees, net operating surplus, consump-tion of fixed capital and other taxes less subsidies on production.

GDP Rebasing of Maldives, National Bureau of Statistics, www.statisticsmaldives.gov.mv

3

Why does Gross Domestic Product (GDP) need to be rebased?

Over the past decade, many changes in the global and local structures have influ-enced Maldivian economy. The tsunami in December 2004,the global financial cri-sis occurred in 2008, the implementation tax policies in 2011, and the expansion of financial sector are some examples of changes on economic activities that need to be incorporated in the national accounts statistics. One of the improvements in the national accounts statistics is to rebase GDP form base year 2003 to 2014 in order to capture current economic condition. It is in line with the United Nations (UN) recommendation on 2008 System of National Ac-counts (SNA) using the Supply and Use Tables (SUT) as the framework.

What are the benefits of rebasing Gross Domestic Product (GDP) to

2014?

Rebasing GDP provides some benefits such as:

To describe current economic condition i.e. size and economic growth rate

during a given period of time

To improve the quality of GDP

To improve the international comparability of the GDP

What are the implications of Gross Domestic Product (GDP) rebas-

ing?

The rebasing of GDP brings some impacts on macro economic indicators such as:

• Increase in nominal GDP, which will lead to an increase in the income group

from low into medium or high income country (GDP per capita ) and change

economic structure.

• Changing the macroeconomic indicators such as tax ratios, debt ratios, in

vestment and saving ratios, current account, and economic growth.

• Changing the data base for modelling and forecasting.


4

Why is 2014 used as the reference year?

Our current base year is 2003 and 2014 was selected as the new base year due to

the following reasons:

• Economy is relatively stable.

There has been transformation in the economic structure in the past decade,

especially in the construction, tourism, manufacturing and trade sector

affecting distribution patterns and growth of new sectors .

• UN recommendation to change GDP base year every 5 (five) years.

• The renewal concepts, definition, coverage, and methodology as are recom-

mended by the SNA 2008.

• The availability of new data source to improve quality of GDP such as Popula-

tion Census 2014, Tax data and economic survey 2012/2013.

• The availability of SUT as the framework that could be used for GDP bench- marking exercise

What is Supply and Use Table (SUT)?

Supply and Use Table or SUT is a framework that describes the balance between

the flows of production and consumption (goods and services) and the generation

of income in production activity. It consists of two main tables namely Supply table

and Use table.

The SUT framework uses ISIC Rev. 4 classification and the CPC Ver.2.0. The SUT

framework has two equations that should be fulfilled:

a. SUPPLY = USE

The value of goods and services provided by domestic industries and import

should be equal to the value of goods and services used on production pro-

cess and final consumption.

b. OUTPUT = INPUT

The value of goods and services produced by domestic industries should be

equal to the value of goods and services used on the production process

SUT is a compilation tool for data checking and reconciliation, gap filling, and the

best framework for compiling GDP in an integrated approach. When GDP was

compiled independently, some statistical discrepancies may occur. It means there

MALDIVES SUT 2014


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TOTAL USE

Export of goods and services

Changes in inventory

Gross fixed capital formation (GFCF)

Government expenditure

NPISHs and Household expenditure

Inte

rmed

iate

Co

nsu

mp

tio

n

at P

urc

has

er’s

Pri

ce

Tota

l In

term

edia

te

GV

A (

Pro

du

ctio

n)

At

bas

ic p

rice

TOTA

L IN

PU

T

- C

om

pen

sati

on

of

emp

loye

es

- O

ther

tax

es

less

su

bsi

die

s o

n

…P

rod

ucti

on

- G

ross

Op

erati

ng

Surp

lus

GV

A (

Inco

me)

At

bas

ic p

rice

TOTAL SUPPLY

Trade and transport margins

Taxes less subsidies on products

Import of goods and services

Do

me

stic

Sup

ply

at

Bas

ic P

rice

TOTA

L O

UTP

UT

Total Intermediate Consumption USE

TA

BLE

SU

PP

LY T

AB

LE

I

ND

UST

RY

FIN

AL

DEM

AN

D P

urc

has

er’

s P

rice

IND

UST

RY

GD

P (

Exp

en

dit

ure

) =

To

tal F

inal

De

man

d

- Im

po

rt o

f G

oo

ds

and

Ser

vice

s

GD

P (

Inco

me

) =

G

VA

(In

com

e) a

t b

asic

pri

ce +

Ta

xes

less

Su

bsi

die

s o

n P

rod

uct

s

GD

P (

Pro

du

ctio

n)

=

GV

A (

Pro

du

ctio

n a

t b

asic

pri

ce)

+

Taxe

s le

ss S

ub

sid

ies

on

Pro

du

cts

COMMODITY

COMMODITY

Equivalent

Equ

ival

ent

Equ

ival

ent

Figure 1. Framework of SUT


I

ND

UST

RY

6

What is SNA?

The System of National Accounts is the internationally agreed standard set of rec-

ommendations on how to compile measures of economic activity in accordance

with strict accounting conventions based on economic principles. The recommen-

dations are expressed in term of a set of concepts, definitions, classifications and

accounting rules that comprise the internationally agreed standard for measuring

indicators such as GDP.

Previously published GDP estimates are compiled based on SNA 2003. However

2014 SUT was compiled based on the latest version of SNA manual, SNA 2008.

THE 2008 SNA IMPLEMENTATION


7

GDP 2003 Series

Agriculture and mining 1

Fisheries 2

Manufacturing 3

Electricity and water supply 4

Construction 5

Wholesale and retail trade 6

Tourism 7

Transport 8

Communication 9

Financial services 10

Real Estate 11

Business services 12

Government Administration 13

Education 14

Health 15

Social services 16

GDP 2014 Series

Agriculture A

Fisheries A

Fish preparation C

Other manufacturing C

Electricity D

Water and sewerage D

Construction F

Wholesale and retail trade G

Resorts I

Other accommodation services I

Food and beverage services I

Transportation H

Postal and Telecommunication J

Financial intermediation K

Insurance and auxiliary to financial intermediation K

Real estate activities L

Professional, scientific and technical activities M

Travel agencies and support services N

Public administration O

Education P

Health and social work Q

Entertainment, recreation & Other services R

Figure 2. Comparison of GDP Classification by industries

What are changes in the GDP classification?

The GDP classification by industry is based on International Standard Industrial Classifications of all

economic activities (ISIC). The GDP 2003 series uses ISIC Rev.2 while classification of 2014 series ap-

plies ISIC Rev.4. The comparison of the GDP classification in aggregate level can be seen on the fol-

lowing table.


8

MAIN RESULT

Figure 3. Result of SUT 2014

Intermediate Consumption MVR 59,855 million

Goods MVR 36,543

million

Services MVR 23,311

million

Gross Value Added at Basic Price MVR 50,683 million

Compensation Employee

MVR 18,450 million

Gross Operating Surplus

MVR 31,799 million

Other Taxes less subsi-dies on Production

MVR 454 million

Domestic Output at Basic Price MVR 110,538 million

Goods MVR 14,051

million

Services MVR 96,487

million

Tax less subsidies on products

MVR 6,184 million

Intermediate Consumption MVR 59,855 million

TOTAL SUPPLY MVR 159,192

million

TOTAL USE MVR 159,192

million

Import MVR 42,471 million

Final Demand MVR 99,338 Million

Export MVR 51,916

million

Domestic Final Demand

MVR 47,422 million

Goods MVR 19,858

million

Services MVR 27,564

million

1. Gross Value Added at Basic Price

50,683 1. Compensation Employee

18,450 1. Domestic Final Demand 47,422

2.Tax less subsidies on Product

6,184 2.Taxes less subsidies on Production

6,637 2.Export 51,916

3.Net Operating Surplus 24,345

3.Less Import 42,471

4.Consumption of fixed capital

7,434

GDP by Industry 56,867 GDP by Income 56,867 GDP by Expenditure 56,867

GDP BY INDSUTRY = GDP BY INCOME = GDP EXPENDITURE


9

How big is the difference between 2014 nominal GDP based on 2003

rebased series and 2014 rebased series?

GDP at current prices in the year 2014 for 2003 based series is MVR. 47,590 mil-

lion, while rebased GDP based on SUT 2014 reached MVR 56,867 million, which is

a difference of MVR 9,277 million (19.49%).

Chart 1. The comparison between GDP 2003 and 2014 base year

What is the effect of the implementation of 2008 SNA for the new re-

based GDP 2014 on FISIM?

Implementation of the 2008 SNA decreased the level of FISIM for the 2014 base

year by 56.21% compared with the base year 2003. This decrease is due to the

changes in the method of calculating FISIM. FISIM in 2014 (base year 2003) is MVR

1,900.8 million, while FISIM of base year 2014 reached MVR 832.4 million, which

is a difference of MVR 1068.4 million .

Chart 2. Comparison of 2014 FISIM in two base years (2003 and 2014)


*Financial intermediation services indirectly measured (FISIM) is an indirect measure of the value of financial intermediation services provided

but for which financial institutions do not charge explicitly.

47,590

56,867

42,000

44,000

46,000

48,000

50,000

52,000

54,000

56,000

58,000

GDP (in million MVR)

in m

illi

on

MV

R

Base year 2003 Base year 2014

19.49 %

1,901

832

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

FISIM

in m

illi

on

MV

R


- 56.21 %

10

Table 1. Comparison of Nominal GDP 2014 by industries in two base year (2003 and 2014)

How has the GDP by industry changed in the new 2014 base year?

Rebasing GDP effects the nominal level and structure of 2014 GDP by industry as shown in the table be-

low:


Note: Breakdown of resorts and other accommodation services were not compiled prior to 2014.

(Million MVR) (%) (Million MVR) (%)

A Agriculture 814.3 1.7 783.4 1.4

A Fisheries 490.2 1.0 2,234.6 3.9

C Fish preparation 1,154.8 2.4 279.2 0.5

C Other manufacturing products 863.6 1.8 849.6 1.5

D Electricity 211.0 0.4 482.2 0.8

E Water and sewerage 233.2 0.5 398.1 0.7

F Construction 5,294.8 11.1 2,775.6 4.9

G Wholesale and retail trade 1,532.1 3.2 5,353.7 9.4

I Resorts and Other accomodation services 10,083.9 21.2 13,902.1 24.4

i Resorts na na 13,297.1 23.4

i Other accomodation services na na 605.0 1.1

I Food and beverage services 631.4 1.3 440.9 0.8

H Transportation 2,316.2 4.9 3,722.8 6.5

J Postal and Telecommunication 2,143.8 4.5 1,687.9 3.0

K Financial intermediation 2,048.5 4.3 2,121.7 3.7

K Insurance and auxiliary to financial intermediation 54.3 0.1 138.7 0.2

L Real estate activities 2,348.2 4.9 4,166.3 7.3

M Professional, scientific and technical activities 361.4 0.8 851.5 1.5

N Travel agencies and support services 675.2 1.4 1,736.5 3.1

O Public administration 6,576.0 13.8 4,372.0 7.7

P Education 1,482.7 3.1 1,704.0 3.0

Q Health and social work 1,201.2 2.5 1,511.8 2.7

R Entertainment, recreation & Other services 356.6 0.7 1,170.3 2.1

Gross Value Added at basic price 40,873.6 85.9 50,683.2 89.1

Taxes less subsidies on product 6,716.0 14.1 6,183.6 10.9

GROSS DOMESTIC PRODUCT 47,589.6 100.0 56,866.7 100.0

Industry

2003 Base year 2014 Base year

11

How has the shares of final expenditure changed in the new 2014 base year?

Rebasing GDP effects the expenditure shares as shown in the table below:

Table 2. Comparison of 2003 and 2014 Nominal GDP by expenditure in base year (2003 and 2014)


Chart 3. Comparison of Real GDP Growth rates from 2004 to 2015

(Million MVR) (%) (Million MVR) (%)

1 Household & NPISHs Consumption Expentidure 4,840 36% 20,892 37%

2 Government Consumption Expenditure 2,347 18% 10,686 19%

3 Gross Fixed Capital Formation 3,456 26% 15,201 27%

4 Changes in Inventory (116) -1% 643 1%

5 Exports of 9,735 73% 51,916 91%

A. Goods 1,880 14% 4,657 8%

B. Services 7,855 59% 47,259 83%

6 Less Imports of 6,906 52% 42,471 75%

A. Goods 6,247 47% 32,400 57%

B. Services 659 5% 10,071 18%

GROSS DOMESTIC PRODUCT 13,356 100% 56,867 100%

2003 Base year 2014 Base year

Component of Expenditure

6.0

(13.1)

26.1

7.7 9.5

(7.2)

7.3

8.6

2.5

7.3 7.3

2.2

13.2

(8.1)

19.9 10.2

12.7

(5.3)

7.2 8.7

2.5 4.7 6.0

2.8

(20)

(15)

(10)

(5)

-

5

10

15

20

25

30

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Gro

wth

rat

e (

%)


12

Tab

le 3

. Co

mp

aris

on

of

No

min

al a

nd

Rea

l GD

P o

f tw

o b

ase

yea

rs (

20

03 a

nd

20

14

)

GD

P R

ebas

ing o

f M

aldiv

es,

Nat

ion

al B

ure

au o

f S

tati

stic

s, w

ww

.sta

tist

icsm

ald

ives

.gov.m

v

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2014

serie

s M

illion

MVR

13,4

67.1

15,7

03.4

14,8

91.0

20,1

62.6

23,9

15.3

29,0

77.1

30,0

19.8

33,1

28.7

40,5

11.1

44,3

45.4

50,6

33.5

56,8

66.7

61,5

65.6

Grow

th ra

te

%-

16

.6

(5

.2)

35

.4

18

.6

21

.6

3.

2

10.4

22.3

9.5

14

.2

12

.3

8.

3

2003

serie

s M

illion

MVR

13,3

55.5

15,3

88.7

14,3

33.5

18,8

76.1

22,3

48.8

27,0

07.5

27,5

10.5

29,7

39.8

35,7

68.3

38,6

93.0

42,9

52.2

47,5

89.6

52,7

87.5

Grow

th ra

te

%-

15

.2

(6

.9)

31

.7

18

.4

20

.8

1.

9

8.1

20

.3

8.

2

11.0

10.8

10.9

2014

serie

s M

illion

MVR

32,5

49.8

34,5

13.8

29,9

82.5

37,8

11.4

40,7

28.1

44,5

91.3

41,3

67.8

44,3

73.3

48,1

74.6

49,3

87.3

52,9

83.3

56,8

66.7

58,1

43.9

Grow

th ra

te

%-

6.

0

(13.

1)

26

.1

7.

7

9.5

(7

.2)

7.

3

8.6

2.

5

7.3

7.

3

2.2

2003

serie

s M

illion

MVR

13,3

55.5

15,1

13.1

13,8

85.2

16,6

46.7

18,3

40.0

20,6

64.4

19,5

63.9

20,9

66.0

22,7

91.9

23,3

61.4

24,4

58.9

25,9

25.8

26,6

63.8

Grow

th ra

te

%-

13

.2

(8

.1)

19

.9

10

.2

12

.7

(5

.3)

7.

2

8.7

2.

5

4.7

6.

0

2.8

Nom

inal

GDP

Real

GDP

13

What is the impact of rebasing on the GDP level of other countries?

The effect of rebasing on GDP level are as shown below in the table:

Table 4. Implication of rebasing of GDP in other countries

No Country Previous Base

Year

Latest Base

Year

Nominal Changes of

GDP (%)

1 Malaysia 2000 2005 3.2

2 Indonesia 2000 2010 6.5

3 Singapore 2005 2010 1.3

4 Sri Lanka 2002 2010 14.1

5 Ghana 1993 2006 60.0

6 Kenya 2001 2009 25.0

7 Nigeria 1990 2010 59.5

8 Zambia 1994 2010 25.0

9 Maldives 2003 2014 19.5

10 Maldives 1995 2003 34.0


Chart 4. Comparison of Nominal GDP per capita in two base year (2003 and 2014)

14

National Bureau of Statistics Dhaarul-E-maan ( 7th floor) , Majeedhee Magu. Tel: (+960) 3008400 Fax: (+960) 3327351 Email: [email protected]

Documents

GDP REASING - statisticsmaldives.gov.mvstatisticsmaldives.gov.mv/.../2017/11/GDP-Leaflet.pdf · GDP at current prices in the year 2014 for 2003 based series is MVR. 47,590 mil-lion,