Download Improving GDP Forecasts

IMPROVING GDP ESTIMATES FOR FIJI
JOINT BRIEFING TO STAKEHOLDERS
21 October 2016
OUTLINE
• Recommendations:
– GDP Importance
– Current Practice
– Ministry of Economy
– Fiji Bureau of Statistics
– Fiji Revenue & Customs Authority
IMPORTANCE OF GDP
Why is GDP so Important?
The GDP statistics is one the main indicators used to gauge the health of a country’s economy. More importantly,
GDP statistics assist to evaluate the following:
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It highlights the current and historical economic trends. These trends assist businesses with planning
investments, setting up strategic actions and targets, especially for the long-run.
Most Governments and economic planners use GDP as an indicator for planning and policy formulation.
Because government policies directly influence the financial markets, investors keep a close tab on the GDP
growth and estimates.
GDP helps the investors to manage their portfolios by providing them a snap shot on a country’s economic
state. Investors normally study GDP trends to recognise the signs of a growing economy, and invest
accordingly. Moreover, the various components of GDP give insights of the performance of major economic
sectors, which may assist an investor to manage and invest in the most lucrative sectors of the economy.
GDP growth is an indicator used by economic organisations to compare an economy’s performances across
regions. For instance, the IMF and the World Bank assess the performance of an economy and provide policy
advice and financing to member countries.
For the citizens overall, a healthy economy usually demonstrates low unemployment and wage increases as
businesses demand labour to service a growing economy
CURRENT PRACTICES FOR GDP ESTIMATES:
•
•
FBOS carries out annual surveys to compile current years GDP estimates, utilises Government expenditures,
liaises with industry stakeholders and uses some of the partial indicators to get latest estimates
However, current GDP estimates may be understated as it does not measure: non-market, illegal and black
economy activities
Fiji’s GDP Performance in the Last 15 years
%
6
4.7
5.6
3.6
4
1.4
2
0
-2
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014r
2015p
CREDIT CONDITIONS SURVEY
The survey will determine the underlying causes of credit growth by commercial banks, as well as
gauge expectations on bank lending conditions for the forthcoming quarter. Such a survey will
provide support for our current analysis on monetary conditions and financial stability.
Suggestions
The Reserve Bank’s as part of its macro-prudential surveillance work should conduct a credit
conditions survey initially on the banking industry, to enhance understanding and monitoring of
trends and developments in credit conditions within Fiji’s financial sector.
The survey questionnaire can be comprised of four sections:
i)
credit standards and pricing,
ii)
demand for loans,
iii)
non-performing loans and
iv)
additional questions.
REAL ESTATE MARKET SURVEY
Studies have shown that real estate prices and macroeconomic variables are closely linked. Real
estate or housing makes up a large share of the overall macro economy.
At the household level, housing constitutes a significant share of household expenditure as well as
total wealth. This means that substantial fluctuations in housing price would have significant
implications on household wealth effects and ultimately influence economic activity via private
consumption and investment decisions.
Suggestions
•
The survey to look into the developments in the real estate market in Fiji to examine the
changes in the volume and average price of real estate properties traded in the country during
the year., etc.
• Real estate constitutes all property type sales including Residential A, B, C, D, Industrial,
Commercial
• Conduct survey in selected areas in Fiji’s Central/Eastern and Western Division.
• Property prices are obtained from the Valuations Office of the Lands Department, which is
originally sourced from the Fiji Revenue and Customs Authority (Stamp Duties)
Combined Recommendations for all
Institutions (MOE, FBOS & FRCA)
•
Sharing of data:
– Statistics, reports, etc
– Dynamic Business registry
•
Reducing compliance burden:
– Streamlining of surveys
– Access to company level tax data
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Communicating MOUs throughout respective organisations – ensure this is carried
out during handover process for change in leadership
Ensure that staff possess relevant qualifications
Upskilling of staff – training
Improve inter-organisation rapport
MINISTRY OF ECONOMY
• Please fund your statistics offices! FBOS needs
sufficient resources for improved data collection (eg:
expand survey line) and reporting (eg: compiling new
useful statistics such as environmental statistics)
• Autonomy of FBOS
• More active participation by FBOS during the
Macroeconomic Sub-Technical Committee forecasting
process.
FIJI BUREAU OF STATISTICS
• Increase awareness on importance/end usage
of data provided through newspaper articles,
television and radio segments (in iTaukei and
Hindi), advertise for all surveys throughout the
year
FIJI REVENUE & CUSTOMS
AUTHORITY
• Sharing company level data with other
institutions
Vinaka vakalevu