Transcript MEASUREMENT OF NATIONAL INCOME

PRESENTATION ON
GROSS DOMESTIC PRODUCT
(GDP)
Department of Economic Planning and Development (JPKE)
Prime Minister’s Office
13 Ogos 2007
GROSS DOMESTIC PRODUCT
 INTRODUCTION
 CONCEPTS AND DEFINITION
 GDP MEASUREMENT
 COMPILATION PRACTICE IN
BRUNEI DARUSSALAM
 USERS AND USES
INTRODUCTION
COMPILATION OF GDP FOR BRUNEI
DARUSSALAM
Compiling Agency :
National Accounts Section (NAS)
Department of Statistics (DOS)
Department of Economic Planning and
Development (JPKE)
Prime Minister’s Office
INTERNATIONAL STANDARDS
A SYSTEM OF NATIONAL ACCOUNTS (SNA)
• a comprehensive guide for the compilation of GDP
• latest : 1993 SNA
• regional and international comparability
- concepts and definitions
- methodology
- classifications
GROSS DOMESTIC PRODUCT
Definition :
• a measurement in monetary terms of all the
achievements of an economy
• within a given period of time, generally a year
• in the forms of production of all kinds of goods
and services
GDP MEASUREMENT
PRODUCTION OR OUTPUT APPROACH
- the sum of the value added of the various
industries in the economy
EXPENDITURE APPROACH
- the sum of consumption expenditure,
investment and net exports
INCOME APPROACH
- the sum of the factor incomes, namely
compensation of employees and gross
operating surplus
GDP MEASUREMENT APPROACHES
Production
GDP – Gross Domestic Product
GVA – Gross value Added
GDP =  GVA
CE – Compensation of Employees
CFC – Consumption of Fixed Capital
OS – Operating Surplus
C – Consumption
I - Investment
X – Exports
M - Imports
Expenditure
GDP = C + I + (X – M)
Income
GDP = CE + CFC +OS
CURRENT AND CONSTANT PRICES
(Nominal and Real Prices)
CURRENT PRICES
• measured at prevailing prices during the year
• the changes over the years would also include the
effect of the changes in prices
• not a proper measure of real change in production
CONSTANT PRICES
• the effect of prices eliminated
• measured at given prices of particular ‘base year’
• use price indices as deflator or volume indicators as
extrapolator
GDP COMPILATION PRACTICE
IN BRUNEI DARUSSALAM
GDP compilation – first started in 1978
Current GDP compilation :
- Consistent with 1993 SNA
- Base year : 2000
- By 2 approaches : Production & Expenditure
- Annual and Quarterly
- At current and constant prices
COMPILATION PROCESS
PRODUCTION APPROACH
GDP
The sum of gross value added
(GVA), which is derived by
deducting the value of goods and
services used in the production
(IC) from the value of goods and
services produced (GO)
GDP =  GVA, where GVA = GO - IC
PRODUCTION APPROACH
INDUSTRY
Group of enterprises/establishments
engaged in the same, or similar economic
activity
CLASSIFICATION
International Standard Industrial
Classification of All Economic Activities
(ISIC, Rev. 3)
CLASSIFICATION OF
ECONOMIC ACTIVITIES
AGRICULTURE, FORESTRY AND FISHING
INDUSTRIAL SECTOR
Mining
Manufacturing
Construction
Electricity and Water
SERVICES SECTOR
Transport & Communication
Trade (Wholesale & Retail Trade, Restaurants & Hotels)
Finance
Real Estate & Ownership of Dwellings
Private & Business Services
Government Services
SOURCES OF DATA
PRIVATE SECTOR BUSINESSES
• Economic Census (EC)
• Quarterly Survey of Businesses (QSB)
• Data on production from relevant government
departments and other agencies
GOVERNMENT SECTOR
• Government accounts data
HOUSEHOLD SECTOR
• Population Census data
• Household Expenditure Survey data
ECONOMIC CENSUS
• Conducted every 5 years
• Covers all registered businesses operating in
Brunei Darussalam
• The last Economic Census in 2002 :
- 2000 & 2001 data
- Publication : (i) Preliminary Report
(ii) 2002 Economic Census Report
• The next census in 2007 : 2005 & 2006 data
ECONOMIC CENSUS
QUESTIONNAIRE
1. Principal business activity & other business activity
2. Location and branches
3. Number of employees and salary
4. Sales/receipts/income
5. Expenditure – Operating & Non-operating
6. Inventory/stock
7. Capital expenditure - Fixed assets
Data analysed & processed to compute GVA for each
business and summed up to get GVA for private sector
QUARTERLY SURVEY OF
BUSINESSES QUESTIONNAIRE
- Conducted on a sample basis
- All medium & large businesses and a selection of
small businesses
- Conducted every quarter
- Uses brief questionnaire :
1. Principal business activity
2. Number of employees and salary
3. Sales/receipts/income
CENSUS vs. SURVEY DATA
CENSUS
SURVEY
Complete coverage
Sample basis
Comprehensive data
Limited data
Time consuming in
processing the data
Quick to process
“Straightforward” GVA
computation
Rely on ratios and
estimation techniques for
GVA computation
GDP BY EXPENDITURE
To validate the estimates by production
GDP BY EXPENDITURE
= Private Consumption Expenditure (PCE)
+ Government Consumption Expenditure (GCE)
+ Gross Domestic Capital Formation (GDCF)
(Construction, Machinery & Equipment & Change in stock)
+ Exports of goods and services (X)
- Imports of goods and services (M)
DATA SOURCES
Exp. item
Source of data
PCE
Household Expenditure Survey
GCE
Government budget and actual expenditure
GDCF
Construction
Government expenditure for gov’t construction
Economic census / Building permits for private
construction
Machinery &
equipment
External trade statistics
 stock
Economic census
X-M (Goods)
External trade statistics
X-M (Services) Balance of payments
USERS AND USES
Economic planners and policy makers
- monitoring the economy; economic planning & development
- forecasting and simulation
Regional & international organisations
- economic structure & performance comparison
Business
- financial markets, market research, contracts
Academicians
- research and analysis
General public
GDP BY PRODUCTION
2005
72 %
27 %
2004
68 %
31 %
2003
64 %
35 %
2002
61 %
38 %
2001
60 %
39 %
0%
20%
40%
Agricult ure, Forest ry & Fishery
60%
Indust ry
80%
Services
100%
GDP BY EXPENDITURE
BND million
12000
10000
8000
Exports
6000
PCE
4000
GCE
2000
Capital Formation
0
Imports
-2000
-4000
-6000
2001
2002
2003
2004
2005
THANK YOU
Q & A