Download Notional real expenditures for 2011

3rd ICP 2011 Technical Advisory Group Meeting at the
OECD, Paris
10, 11 June 2010
Some Background
Situation in
2005
 Emphasis was on price collection
 Belated attention to National Accounts
 Different estimates for GDP and population
Lessons
learnt
 Need to establish process to determine
GDP and population for the ICP
 Improved editing procedures required
 Ensure consistency between expenditures
and survey prices
2
Some Background (cont’d)
Proposed
Procedures
for 2011
 A step by step approach
 Tables/questionnaires were developed to
guide the countries
 Testing in Oman, Lebanon, Kenya,
Ethiopia, Hong Kong
3
Questionnaire on Estimation of
BHs for the 2005 ICP
Objectives
 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
 Describe the sources for each
Recommended
 Show how data from original sources were
tasks
adjusted for time; coverage; or definitions
4
Questionnaire on Estimation of
BHs for the 2005 ICP (cont’d)
Details
required
 Values obtained from the national accounts
 Original data source used to estimate
expenditure
 Estimated expenditure in year of data source
 Adjustments made to data from original data
source
 Brief explanation of adjustments
 Expenditure reported for ICP 2005
Mission
Outcomes
 Details available in 4 of the 5 countries
 Time consuming
5
Commodity Flow Matrix
 It shows how the supply of a product is
Description
distributed among intermediate and final
uses
 Valuation at purchasers’ prices
 To be completed for products identified as
important in relevant BH in any individual
country
If all products
were included
 GDP could be derived:
 either as total supply less intermediate
consumption
 or as total final expenditures plus net
exports
6
Commodity Flow Matrix (cont’d)
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.)
Mission
Outcomes
 Full support from all 5 countries
 Support for further development of SUTs
but as long-term goal
7
Important Products
Objectives
 Improve and streamline GDP breakdown
 Propose items to the regional list of
specifications
 Consistency between expenditures and
prices
 Better compile commodity flows
Recommended
Tasks
 Describe the sources
 Estimate quantities, prices and total
expenditures for each of these products –
even roughly
8
Important Products (cont’d)
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 cases
 Quantities and hence average prices not
available
9
Price Formation
Objectives
 Provide more details on important products
 Consistency between expenditures and
prices
 Better compile commodity flows
Description
 Important products (domestically-produced
and imported)
 Household final cons exp and GFCF
 Designed to systematically adjust values
recorded at basic prices to the ICPrequired basis of purchasers' prices
 All individual steps required are shown
10
Price Formation (cont’d)
Basic
Equalities
D
o
m
e
s
t
i
c
I
m
p
o
r
t
e
d
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’ price
Basic 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
11
Price Formation (cont’d)
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
12
Check on real expenditure
evolution
Objective
 Aim is to provide some basic edits by
comparing the per capita notional real
expenditures in 2011 with those in 2005
 To be completed by the Regional Offices
Description
Data
 Expenditure in national currency
 Average “price”
 Notional real expenditure
 Population
 Notional real expenditure per
capita
13
Check on real expenditure
evolution (cont’d)
Notional real  Calculate a “price” for a BH as geometric
expenditures
average of the prices provided by a country
for 2011
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
14
Check on real expenditure
evolution (cont’d)
Mission
Outcomes
 Change can be two-fold:
 prices [difference in products or price
escalation]
 actual change in per capita real
expenditures
 Suggest 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
15
SNA93 Compliance Check
Elements
affecting the
level of GDP
 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?
16
SNA93 Compliance Check
Elements
affecting the
level of GDP
 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?
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
17
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
18
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
19
Timetable
2011
2010
Major aggregates for latest
year possible
J N
BH details for final cons.
aggregates for latest year
possible
J
Values for all BHs
Preliminary data for 2010
N
2012
2013
J N
J
J
Major aggregates for 2011
J O
M
BH values for 2011
J O
M
M= May; J= July; O= October; N=November
20
THANK YOU
21