National Accounts Guidelines for ICP 2011

3rd ICP 2011 Technical Advisory Group Meeting at the OECD, Paris

 10, 11 June 2010

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Some BackgroundEmphasis was on price collectionBelated attention to National AccountsDifferent estimates for GDP and population

Situation in 2005

Lessons learnt

Need to establish process to determine GDP and population for the ICP

Improved editing procedures requiredEnsure consistency between expenditures

and survey prices

Some Background (cont’d)

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Proposed Procedures for

2011

A step by step approachTables/questionnaires were developed to

guide the countriesTesting in Oman, Lebanon, Kenya,

Ethiopia, Hong Kong

Questionnaire on Estimation of BHs for the 2005 ICP

Set 2005 as starting point for the 2011 estimation

Ensure consistency between 2005 and 2011

Establish how expenditures on basic headings were estimated for ICP 2005

Document the 2005 compilation

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Objectives

Recommended tasks

Describe the sources for eachShow how data from original sources were

adjusted for time; coverage; or definitions

Questionnaire on Estimation of BHs for the 2005 ICP (cont’d)

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Details required

Values obtained from the national accountsOriginal data source used to estimate

expenditureEstimated expenditure in year of data sourceAdjustments made to data from original data

source Brief explanation of adjustmentsExpenditure reported for ICP 2005

Mission Outcomes

Details available in 4 of the 5 countriesTime consuming

Commodity Flow MatrixIt shows how the supply of a product is

distributed among intermediate and final uses

Valuation at purchasers’ pricesTo be completed for products identified as

important in relevant BH in any individual country

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Description

GDP could be derived: either as total supply less intermediate

consumption or as total final expenditures plus net

exports

If all products were included

Commodity Flow Matrix (cont’d)

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Mission Outcomes

Full support from all 5 countriesSupport for further development of SUTs

but as long-term goal

Basic Equalities

Total supply at purchasers' prices =domestic production at basic prices

+ imports at c.i.f. values+ trade and transport margins+ taxes on products= Total use at purchasers’ prices

Total use at purchasers' prices =Intermediate consumption

+ household final consumption expenditure+ government final consumption expenditure+ gross fixed capital formation+ change in inventories and net acquisitions of valuables+ exports (f.o.b.)

Important ProductsImprove and streamline GDP breakdownPropose items to the regional list of

specificationsConsistency between expenditures and

pricesBetter compile commodity flows

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Objectives

Recommended Tasks

Describe the sourcesEstimate quantities, prices and total

expenditures for each of these products – even roughly

Important Products (cont’d)

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Details required

Data sources used for average prices; quantities; values

Indicators to extrapolate forward from latest benchmark

Mission Outcomes

All countries could identify important products

Values could be identified in most casesQuantities and hence average prices not

available

Price Formation

Provide more details on important productsConsistency between expenditures and

pricesBetter compile commodity flows

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Objectives

Important products (domestically-produced and imported)

Household final cons exp and GFCFDesigned to systematically adjust values

recorded at basic prices to the ICP-required basis of purchasers' prices

All individual steps required are shown

Description

Price Formation (cont’d)

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Basic Equalities

Basic price (ex-factory price)+ taxes on products excluding invoiced VAT less subsidies on products

equals Producers’ price+ VAT not deductible by the purchaser + separately invoiced transport charges+ wholesalers’ and retailers’ margins+ installation costs (capital formation only)

equals   Purchasers’ priceBasic price (c.i.f. unit value)

+ customs duties+ taxes on products excluding invoiced VAT less subsidies on products

equals Producers’ price+ VAT not deductible by the purchaser + separately invoiced transport + wholesalers’ and retailers’ margins+ installation costs (capital formation only)

equals   Purchasers’ price

Domestic

Imported

Price Formation (cont’d)

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Mission Outcomes

None of the 5 countries has data on margins, transport costs or installation costs for individual products

Suggest using this form only in countries that currently have commodity-flow approach or SUTs

Check on real expenditure evolution

Aim is to provide some basic edits by comparing the per capita notional real expenditures in 2011 with those in 2005

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Objective

To be completed by the Regional Offices

DescriptionData

Expenditure in national currencyAverage “price”Notional real expenditurePopulationNotional real expenditure per

capita

Check on real expenditure evolution (cont’d)

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Notional real expenditures

for 2011

Calculate a “price” for a BH as geometric average of the prices provided by a country for products listed under that BH

These BH “prices” are divided into reported expenditures in national currency to obtain the BH notional real expenditures for 2011

Finally, calculate per capita notional real expenditures for both years and change [in%] from 2005 year to 2011

Check on real expenditure evolution (cont’d)

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Mission Outcomes

Change can be two-fold: prices [difference in products or price

escalation] actual change in per capita real

expendituresSuggest splitting the table into 2 parts

Prices: to assist in editing the

prices collected

N.A.: Focus on BHs that

behave significantly differently

from related BHs

SNA93 Compliance Check

Elements affecting the level of GDP

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Is government defence expenditure on fixed assets that can be used for civilian purposes included in GCF?

Is CoFC included on all government fixed assets (roads, dams etc)?

Is all mineral exploration (successful and unsuccessful) capitalized?

Is expenditure on computer software purchases included in GCF and on software development included in output?

SNA93 Compliance Check

Elements affecting the level of GDP

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Mission Outcomes

This form will show whether a country uses an early or recent version of SNA

It was tested only in Hong Kong and it showed that Hong Kong is using SNA93

To be sent to all countries where there is a need to confirm their SNA version

Is expenditure on entertainment, literary or artistic originals included in GCF and on their development included in output?

Is expenditure on valuables included in GCF?

Data Validation

1. Compare GDP and major aggregates with data in the annual national accounts questionnaire

2. Sum of components equals corresponding aggregates

3. Signs of potentially negative expenditures

4. Completeness checks

5. [Non] Allocation of FISIM

6. Are net expenditures abroad allocated across products within HFCE

7. Verify price dynamics from production and imports to final uses for important products

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Data Validation (cont’d)

8. Compare average price changes from 2005 to 2011 for each basic heading with overall price changes in the country over this period

9. Compute per capita expenditures for each BH

10.Compare shares of GDP contributed by each BH

11. Compare per capita real expenditures for each BH

12.Variations in per capita real expenditures for each BH between countries in each cluster

13.Consistency of PLIs across BHs within a country

14.Variation of PLIs within BHs between the countries in each cluster

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2010

Timetable

Major aggregates for latest year possible J

2011 20132012

NBH details for final cons. aggregates for latest year possible

Values for all BHs N

J

J N

Preliminary data for 2010

J

Major aggregates for 2011

BH values for 2011

J O M

J

J O M

M= May; J= July; O= October; N=November

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THANK YOU