Transcript Systems of National Accounts

System of National
Accounts
Clementina Ivan-Ungureanu
Training: Essential SNA: Building the basics
Addis Ababa, 12-16 February 2012
Content of the training
1.
2.
3.
-
SNA
What is SNA
Towards the 2008 SNA
Basic concepts
Fundamentals
Main aggregates
Building the SNA
NSDS
SNA implementation strategy
Content of the training
4. Infrastructure for NA
- Business register
- Classifications
- Statistical data sources
- Administrative sources
5. Transition from administrative data to
national accounts concepts
6. NOE: concept, content, estimation practices
7. Informal sector: concept, content, estimation
practices
WHAT IS SNA
Content of the
presentation
• What is SNA
• Need for SNA
• The 2008 SNA
Definition
SNA is the internationally agreed standard set of
recommendations on how to compile measures
of economic activity in accordance with
established accounting conventions based on
economic principles.
Definition
• The recommendations are expressed in
terms of a set of concepts, definitions,
classifications and accounting rules that
comprise the internationally agreed standard
for measuring such items as gross domestic
product (GDP), the most frequently quoted
indicator of economic performance.
• The accounting framework of the SNA
allows economic data to be compiled and
presented in a format that is designed for
purposes of economic analysis, decision
taking and policymaking
Characteristics
They are:
Internationally compatible
Harmonized with those in other social and
economic statistics
Well-established and fixed for a long period
Focused on describing the economic process
in monetary and readily observable terms
Flexible and multi-purpose
The
economic
circuit
National economy circuit
Rest of the world
National economy
Imports
Intermediate
consumption
Financial institutions
Borrowing
Interests
Goods and services
purchased
Producers,
Enterprises
Salaries,
dividends
Production
taxes
Exports
Investme
nt
Interests
Subsidies
Deposits
Social
benefits
Government
Source: ESTP Course: Advanced national accounts, 2007
Consumers,
Households
Social contributions
Income taxes
SNA –Main uses
• Measure the structure and the evolution of
the economy
• Establish a country’s economic and social
policy: they are used by policy makers to
analyse the current situation, identify the
major problems and find a common solution
for development
• Is the framework used for economic
forecasting.
• International comparisons
SNA –Main uses
( cont)
• The SNA is the central statistical
framework that must be used as the
coordinating framework for all other
statistics so as to obtain consistent
definitions, and hence data.
NA for decision-making
1. Target of public policy:
- Supply of money should grow in line with the
nominal growth of GDP corrected for changes in
the velocity of circulation (monetary policy target in
order to avoid excessive inflation)
- Government expenditure on education as %of
GDP
- Expenditure on R&D as %of GDP
- Government expenditure < 60% of domestic
product
- Contribution to military expenditure,
- The burden of taxes and social security
contributions as a % of national income
NA for decision-making
(cont)
2. Tax or aid measure for nations and
regions.
- The contributions to the international
organisations like UN, OECD and IMF and
to supra-national economic and political
unions, like the EU.
- Regions with a relatively low gross
domestic product per region per capita
receive funds
NA for decision-making
(cont)
3. Automatic adjustment for price changes.
- Government expenditures adjusted with the pricechange in GDP
- Multi-annual contracts by local authorities and nonprofit institutions are adjusted with the price change in
net material consumption
- The budget by local authorities and non-profit
institutions can be determined by using for the various
types of expenditure and for some sales and tariffs
indices from the national accounts.
Examples of uses of national accounts for economic policy
NATIONAL ACCOUNTS INDICATORS
Agricultural accounts with data on farmer
income
Growth of particular types of manufacturing or
service industries using the input-output tables
or data on value added by type of activity
Government deficit and debt as a percentage of
GDP
Economic growth, expenditure on Research
and Development as percentage of GDP
Expenditure on defense as a percentage of GDP
Social protection statistics closely linked to
national accounts concepts
Regional gross value added (GVA ) per capita;
regional households consumption per capita
GDP per capita
Satellite accounts: health, tourism,
environments
POLICY USES
Agriculture policy
Industrial policies
Monetary policy and public finance
Productivity and growth policy
Defense policy
Social policy
Regional policy for granting regional
funds
Used to identify countries that need
development funds and to establish
measurements for poverty reduction
Economic policy in the specific domain
Main users
•
•
•
•
•
•
Administrative users
Economic policymakers
Economic modelers
Masse media , public
Other users (financial markets etc)
International organizations
Promoting NA
• NA and statistics are commonly not well
marketed ( monopolistic product)
• NA is like a good and should be promoted
• Marketing efforts:
- stress the main purposes of NA
- make the NA an attractive statistics
• Point to the value added of NA to efficient and
democratic-decision-making.
Education
The general knowledge of data users and compilers
should be raised
• Providing guidance to users: presentation of the
concepts, methods, clear tables with data
• Courses for various groups of data users and at various
levels.
• More prominent place in the research
Investments in education will reduce misinterpretation, will
increase interaction between data compilers and data
users .
In the long run, this will also improve the national accounts
as a description and tool for analysis and policy
TOWARD THE 2008
SNA
Evolution
The roles and uses of the national
accounts have developed over time and
have been stimulated by major events,
like the economic crisis in the thirties,
the Second World War and European
unification.
Historical questions
•
•
•
•
Production and/or distribution matters?
Does government produce?
Are services relevant?
What production and income arises from
financial activities?
• How to show changes over time? How to
compare over nations?
• Can national accounts say something about
wellbeing (environment, natural resources,
sustainability…)?
Early estimates
Year
1660-1710
1707
1760
1770
1790-1800
1798-1804
1805
1823
1843
1886
Event
First national income estimates; in England by Petty, King and
Davenant
in France by Boisguillebert and Vauban
First index-numbers by Fleetwood
Tableau économique by Quesnay: economic accounts used as a
primitive growth and general equilibrium model; precursor of
input-output tables
The concept of value added invented by Young
First national income estimates in Russia
First national income estimates in the Netherland
First national income estimate in Germany
First national income estimates in constant prices by Lowe
First national income estimates in the USA
First official national income estimates by the government
(Australia0
Early estimates
1860-1900
1915
1920
1920-1930
1925-1940
First national income estimates in Austria, Australia, India and
Greece
W.I. King (USA): one of the last national income estimates
combined with clear policy conclusions
The economic consequences of the peace by Keynes: using
national accounts statistics to assess the dramatic economic
consequences of a major political agreement
Private institutions start publishing national income studies, e.g.
university institutes in Sweden and
Norway, USA: Brookings Institutions, NBER, National
Industrial Conference Board;
More official national income estimates (e.g. Greece, Canada,
Soviet Russia, Germany,
Netherlands, New Zealand, USA and Turkey)
Revolutionary decades
(1930-1950)
• In the period 1930-1950, national
accounting was drastically transformed.
It was a revolution in terms of the use of
the national accounts
Period 1930-1950
Uses:
• PPP: international comparison of real income
• Systematic analysis of long term growth
• Input-output analysis
• Econometric modelling of national economies
• Macro-economics development
• Public finance in a macro-economic framework
• Monetary policy linked to national income instead of
gold
• Balance of payments in a macro-economic
framework
Year
1947
The era of the
international guidelines
(1950- ...)
Event
1951-1953
1968-1970
1993-1995
2008-2010
Technical report by the UN containing recommendations; including
the famous annex by Stone: the first detailed and fully worked national
accounting system
First generation of international guidelines: OEEC guidelines of 1951
and 1952; UN guideline of 1953 (SNA53); very simple tables and
accounts
Second generation of international guidelines: UN guideline of 1968
(SNA68), the European guideline of 1970 (ESA70) and the Material
Product System of 1969 (MPS69) for communist countries
Third generation of international guidelines: joint guideline of 1993 by
the international organizations (SNA93 by UN, IMF, World Bank,
OECD and EC) and the European guideline of 1995 (ESA95)
Fourth generation of international guidelines: updates of the joint and
European guidelines (SNA08 and ESA10)
The era of the international
guidelines (1950- ...)
SNA53
SNA68
SNA93
SNA08
Simple set of tables and accounts in current prices
Extended accounting system, including input-output
tables, general principles on prices and volumes
and financial accounts
Inclusion of balance sheets, employment and purchasing
power parities
More detailed accounting structure (more accounts, more
sub-sectors and detailed supply and use tables)
Separate chapters on satellite accounts and flexible
adjustments for national circumstances
Detailed discussion of general principles on prices and
volumes (e.g. chaining and index formulae
More detailed discussions of many topics, e.g.
government accounts, the informal sector and capital
services (important for productivity measurement)
But no detailed discussion of price and volumes by
industry/product and no separate chapters on quarterly
national accounts and regional accounts (unlike ESA95
and its forthcoming update
Update - The process
• 2003-2004: Statistical Commission called for
update
• 44 issues for review
• ISWGNA to coordinate and manage with the
assistance of an AEG (5 meetings)
• TFs and WGs, broad consultation
• March 2007:SC adopted recommendations
• 2008 UNSC Bureau approved Vol. 1
• 2009 UNSC Bureau approved Vol. 2
Theme based
recommendations
1.Globalisation
2. Financial instruments and institutions
3. Government and the public sector
4. New economy and non-financial assets
5. Informal sector
6. Environment
Changes
1. Statistical units and issues of classification
and sectoring
2. Production boundaries for output and
intermediate consumption
3. Assets
4.Other changes
The issues reviewed
•
•
•
•
•
•
•
•
Non-financial assets (22 issues)
Financial services (8)
Financial instruments (6)
Government and public sector (7)
The rest of the world (10)
Units (2)
Informal and illegal activities (2)
Other issues (1)
Main recommendations
with impact on GDP
- Research and development is not an
ancillary activity
- Compilation of own account production by
including return in capital
- FISIM estimation refined
- Extension of the assets boundary and
government GFCF to include expenditure
on weapons systems
- The asset category “computer software”
modified to include databases
Changes related to statistical units and institutional sectoring.
Differences SNA2008 compared to SNA 93 (changes
discussed in the text highlighted)
A. Further specifications of statistical units and
revisions in institutional sectoring
1. Producer unit undertaking ancillary activities to be
recognized as a separate establishment in certain cases
2. Artificial subsidiaries not regarded as institutional
units unless resident in an economy different from that of
their parents
3. Branch of a non-resident unit recognized as an
institutional unit
4. Residence of multi-territory enterprises clarified
5. Special purpose entities recognized
Where in SNA2008
chapter 5, paragraphs
5.41to 5.42
chapter 4, paragraphs
4.62 to 4.64
chapter 4, paragraph
4.47
chapter 4, paragraph
4.13
chapter 4, paragraphs
4.55 to 4.58; chapter
22, paragraphs 22.51
to 22.54
Impact
on GDP
Not
directly
Changes related to statistical units and institutional sectoring –cont
6. Holding company allocated to the financial
corporations sector
7. Head office to be allocated to the institutional sector of
the majority of its subsidiaries
8. Subsector for non-profit institutions introduced
chapter 4, paragraph
4.54
chapter 4, paragraph
4.53
chapter 4, paragraphs
4.35, 4.94, 4.103 and
4.128
9. Definition of financial services enlarged
chapter 4, paragraph
4.98 and chapter 6,
paragraph 6.158
10. Sub sectoring of the financial corporation sector
chapter 4, paragraphs
revised to reflect new developments in financial services, 4.98 to 4.116.
markets and
Instruments
Changes related to the boundaries of output and intermediate consumption:
Differences SNA2008 compared to SNA 93
B. Further specifications of the scope of transactions
including the production boundary
1. Research and development is not an ancillary activity
2. Method for calculating financial intermediation
services indirectly measured (FISIM) refined
3. Output of central bank clarified
4. Recording of the output of non-life insurance services
improved
5. Reinsurance similarly treated as direct insurance
6. Valuation of output for own final use by households
and corporations to include a return to capital
Where in SNA2008
Impact
on GDP
chapter 6, paragraph
6.207
chapter 6, paragraphs
6.163 to 6.165
Yes
chapter 6, paragraphs
6.151 to 6.156;
chapter
7, paragraphs 7.122
to 7.126
chapter 6, paragraphs
6.184 to 6.190 and
6.199; chapter 17,
paragraphs 17.13 to
17.42
chapter 6, paragraph
6.200; chapter 17,
paragraphs 17.56 to
17.65
chapter 6, paragraph
6.125
No
Not
directly
Not
directly
Not
directly
Yes
Changes related to assets and their boundaries
Differences SNA2008 compared to SNA 93
C. Extension and further specification of the concepts
of assets, capital formation and consumption of fixed
capital
1. Change of economic ownership introduced
2. Asset boundary extended to include research and
development
3. Revised classification of assets introduced
4. Extension of the assets boundary and government
gross capital formation to include expenditure on
weapons systems
5. The asset category “computer software” modified to
include databases
Where in SNA2008
Impact
on GDP
chapter 3, paragraphs 3.21,
3.26, 3.169;
chapter 10, paragraph 10.5
chapter 10, paragraphs
10.103 to 10.105
chapter 3, paragraphs 3.5,
3.30 to 3.31, 3.37 to 3.39;
chapter 10, paragraph 10.8
chapter 10, paragraphs
10.87 and 10.144
Not
directly
chapter 10, paragraphs
10.110 to 10.114
Yes
Yes
Yes,
linked to
extension
Yes
Changes related to assets and their boundaries - cont
Differences SNA2008 compared to SNA 93
Where in SNA2008
6. Originals and copies recognized as distinct products
chapter 10, paragraphs
10.100 to 10.101
chapter 20
7. The concept of capital services introduced
8. Treatment of costs of ownership transfer elaborated
9. Mineral exploration and evaluation
10. Land improvements
11. Goodwill and marketing assets
12. Water resources treated as an asset in some cases
chapter 10, paragraphs
10.48 to 10.52, paragraph
10.97 and paragraphs
10.158 to 10.162
chapter 10, paragraphs
10.106 to 10.108
chapter 10, paragraphs
10.79 to 10.81
chapter 10, paragraphs
10.196 to 10.199
chapter 10, paragraph
10.184
Impact
on GDP
No
Not
directly
No
No
No
No
Yes
Changes related to assets and their boundaries – cont2
13. Consumption of fixed capital to be measured at the
average prices of the period with respect to a constantquality price index of the asset concerned
14. Definition of cultivated biological resources made
symmetric to uncultivated resources
15. Intellectual property products introduced
16. Concept of resource lease for natural resources
introduced
17. Changes in the items appearing in the other
changes in the volume of assets account introduced
chapter 10,
paragraph 10.156
Not directly
chapter 10,
paragraph 10.88
chapter 10,
paragraph 10.98
chapter 7, paragraph
7.109
chapter 12
No
No
No
No
D. Further refinement of the treatment and definition of
financial instruments and assets
1. Treatment of securities repurchase agreement clarified
chapter 11, paragraphs
11.74 to 11.77
2. Treatment of employee stock options described
chapter 11, paragraph
11.124; chapter 17,
paragraphs 17.384 to
17.398
3. Treatment of non-performing loans elaborated
chapter 11, paragraph
11.129; chapter 13,
paragraphs 13.66 to
13.68
4. Treatment of guarantees elaborated
chapter 17, paragraphs
17.207 to 17.224
5. Treatment of index-linked debt securities elaborated
chapter 17, paragraph
17.274 to 17.282
6. Treatment of debt instruments indexed to a foreign currency chapter 17, paragraph
revised
17.281
7. Flexibility on valuation of unlisted equity
chapter 13, paragraphs
13.69 to 13.70
No
D. Further refinement of the treatment and definition of financial instruments and assets-cont
8. Unallocated gold accounts treated as financial assets and
liabilities
9. Definition of monetary gold and gold bullion revised
13. Financial asset classification
14. Distinction between financial leasing and operating
leasing based on economic ownership
chapter 11, paragraph
11.45
chapter 11, paragraph
11.45 and 11.46
chapter 11, paragraphs
11.47 to 11.49
chapter 11, paragraph
11.56
chapter 17, paragraph
17.254
chapter 11
chapter 17, paragraphs
17. 301 to 17.309
15. Changes in recommendations for recording pension
entitlements
chapter 17, paragraphs
17. 116 to 17.206
10. Liability in special drawing rights recognized
11. Distinction made between deposits and loans
12. Fees payable on securities lending and gold loans
Example – military
expenditures
Treatment of GFCF
The SNA/ESA draws a distinction between two types
of durable goods used by the military:
-those “that are used in much the same way as in any
other type of production,” are treated as GFCF;
- “destructive military weapons designed for combat”
as rockets, missiles and their warheads and, by
extension, warships, submarines, fighter aircraft
and bombers, and tanks are considered destructive
and are not treated as fixed assets, but IC of
government
Problematic issues
This treatment is problematic for several reasons :
- It fails to recognize that weapon systems provide a
nation with economic benefits by protecting the
liberty and property of its citizens
- It fails to recognize the role of capital in the
production of defence services.
- It fails to recognize that existing military
equipment have value and can be sold.
Problematic issues
- The distinction between destructive equipment
and non-destructive equipment that can be used
for peaceful purposes is difficult to make in
practice.
- The treatment of military equipment used by the
military is inconsistent with the treatment of the
same equipment (for example, armoured
vehicles) used by internal police.
- The treatment is inconsistent with the latest
international public sector financial accounting
standards.
Main reasons to change
a. The distinction between military equipment
that can be used for civilian purposes and
the equipment that cannot is difficult to
make in practice and may lead to
inconsistencies between countries
Main reasons to change cont
b. The weapons have value in global resale
markets; consequently, their exclusion from
the asset boundary implies that the balance
sheets understate the market value of the
assets held by governments.
c. Destructive military equipment provides a
nation with real economic benefits by
protecting its citizens and their property –
provide a defensive service .
Main reasons to change cont
d. Adoption of new standards of accounting
The specialist military equipment is classified as
property, plant, and equipment and require to be
depreciated over their useful lives.
International Federation of Accountants recommends
that NA recognise that military equipment can
provide economic benefits to the economy in the
form of defence services, in more than one period
Recommended changes of
the 2008 SNA
• Classification of the military weapon system as
fixed assets based on the same criteria than the
other assets
• GFCF includes the military weapon system,
including vehicles, other equipment (warships,
submarines, military aircraft, tanks, missile
carriers and launchers, etc ) used continuously in
the production of defence services.
Single-use items, such as ammunition, missiles,
rockets, bombs, etc., delivered by weapons or
weapons systems are treated as military
inventories
Recommended changes of
the 2008 SNA
The destruction of the weapon systems classified as
fixed assets should be recorded in the “other
changes in volume of assets account,” the same
treatment as for other fixed assets that are
destroyed in war.
If the single-use items, which are classified as
inventories, are expended, whether in combat or in
training exercises, their use should be classified as
intermediate consumption by general government,
with an reduction in inventories.
Treatment in national
accounts - weapon system
Weapon system- in the 93SNA/ESA95
Weapon systems are treated as
intermediate consumption by general
government.
Example
RoW
Total
econo
my
Gen
Gover
nment
1
NFC
Transactions
NFC
Gen
Govern
ment
Total
econo
my
RoW
P6 export of goods
and services
P7 Imports of
Goods and ser
11
11
P1 Output
11
11
P2 Intermediate
consumption
11
11
P3.Final
consumption
expenditures
3
9
11
20
Treatment in national
accounts - weapon system
• Weapon system- in the 2008SNA
weapon systems are treated as GFCF
Ro
W
Total
econ
Gen
gov
1
NFC
Transactions
NFC
Gen
gov
Total
econ
RoW
P6 export of goods and
services
P7 Imports of Goods and
services
Production accounts
P1 Output
P2 Intermediate
consumption
8
8
K1 CFC
8
8
Use of disposable income
account
P3Final consumption
expenditure
11
11
Capital account
P51 GFCF
-8
-8
K1 CFC
3
9
8
17
Major implications
• General government value added and GDP
would be higher by an amount equal to the
consumption of fixed capital on weapon
systems (8 in this example)
• General government net saving would be
higher (lower) by the difference between
gross fixed capital formation and
consumption of fixed capital (11 – 8 = 3 in the
example)
Issues of implementation
• Affect other international tranzactions
Transfers of military equipment from one
country to another would need to be
reclassified as capital transfers rather than
current transfers, a change presented in the
Balance of Payments Manual. The
Government Finance Statistics manual would
also clearly need to be changed to reflect this
set of recommendations.
Issues of implementation
• Some obstacle for implementation
- Secret of the data
- Luck of data concerning munitions to
include in the inventory
The 2008 SNA
implementation
strategy
Background of the 2008
SNA implementation
 The 39th session of UNSC in 2008 requested the ISWGNA
to come up with an implementation strategy
 Long term development of SNA and the its implementation
strategy
 International Conference on International Outreach and
Coordination in National Accounts for Sustainable Growth and
Development, 6-8 May 2008, Luxembourg
 High Level Forum for the Long-Term Development of the SNA, 1718 Nov 2008, Washington DC
 Inputs from these events considered by ISWGNA for
formulating the 2008 SNA implementation strategy
Luxembourg
recommendations
 Luxembourg conference was attended by developing
countries, development partners
 It is recognized that availability of the good quality basic
economic statistics in a sustainable manner is key for
implementation of international standards on NAs and
economic statistics
 Direction guiding the LRs can be characterized as
 global coordination
 regional implementation
 to strengthen the national statistical capacity for the
compilation and reporting of national accounts and
related basic statistics.
Luxembourg
recommendations
1. Strategic Planning Frameworks (SPF)
2. Coordination, monitoring and reporting
3. Global Governance
4. National Statistical Capacity Building
5. SNA Knowledge Platform: statistics,
information technology and
management
SNA implementationproblem
 Insufficient staff and training.
 Coverage of economic activities – data collection
mechanism and supporting infrastructure need to
be improved
 Quality and policy relevance of basic economic
and macroeconomic statistics are not well
promoted
 Lack of modern management, ICT infrastructure
 Lack of coordination between TAs providing
country, regional and international agencies
 Reference manuals and compilation guidance not
easily accessible
Implementation strategy
Objectives
 Promoting international coordination among
development partners;
 Implementing regional programmes, guidelines and
procedures for coordination, monitoring and
reporting on performance;
 Strengthening national statistical capacity for
national accounts and related basic statistics;
 Advocating the use of NA and statistics in general
for policy purposes
Implementation
programme
 The Implementation
Programme for the
2008 SNA and supporting statistics
represents a global statistical initiative
 Objectives:
- Make the conceptual change over from the
1993 SNA to the 2008 SNA
- Improve the scope, detail and quality of
the national accounts and supporting
economic statistics
Principles of the global
statistical initiative
strategic planning
coordination, monitoring and reporting
improving statistical systems
Actions to put in practice the
global statistical initiative
1. Use of National Strategies for the Development of
Statistics (NSDS) as the strategic planning
framework
2. The programme information structure built around
the statistical production process, scope and
compliance for the national accounts and
supporting economic statistics
3. The modalities of statistical capacity building
through training and technical cooperation,
publication of manuals and handbooks, research
and advocacy
4. The stages of implementation leading to the
change over to the 2008 SNA
Implementation stages
1. Review:
Review of strategic framework and detailing of
national and regional implementation
programmes
2. Adaptation
Adaptation of classification frameworks,
business registers and frames, surveys,
administrative data sources and information
technology infrastructure
3. Application
Application of adapted frameworks and source
data, backcasting and change over to 2008
SNA.