Transcript 2.6 - United Nations Statistics Division

Seminar on Developing a Programme
for the Implementation of the 2008
SNA and Supporting Statistics
Expenditure Approach
Elriëtte Botes
17-19 October 2012
Pretoria, South Africa
Outline

Expenditure Approach

Final Consumption Expenditure by Households

Final Consumption Expenditure by General Government

Gross Capital Formation
 Gross Fixed Capital Formation
 Change in inventories

Net Exports

Challenge
2
Expenditure Approach
KEYNESIAN EQUATION
Y = C + I + G + (X – M)
GDP = C + I + G + (X –M) ± Res.
Background
GDP from the expenditure approach is compiled
according to the UN System of National Accounts’
definitions, methods and classifications.
It is based on the following accounting identity
KEYNESIAN EQUATION
 Y = C + I + G + (X – M)
 GDP = C + I + G + (X –M) ± Res.
EXPENDITURE
COMPONENTS
Expenditure
Approach
Y=C+G+I+(X-M)
C→ Consumption expenditure by households (61%)
G→ Government consumption expenditure (21%)
I → Gross fixed capital formation (22%)
+ change in inventories (-2.5%)
Res. → Residual
=
(-0.5% of GDP)
Gross domestic expenditure
X→ Value of exports
M→ Less Value of imports
=
X – M (-1%)
Expenditure on Gross domestic product (GDP)
Overall estimation
Yearly
Consolidation of :
 Annual Financial Statistics (Stats SA)
 Quarterly Financial Statistics (Stats SA)
 Annual Reports
 Government publications (Stats SA)
 N01’s
Expenditure Approach
R
millions
Final consumption expenditure
Households
200
General government
100
Gross capital formation
Gross fixed capital formation
310
Inventories
-10
Export of goods and services
less imports of goods and services
Equals Gross domestic product from expenditure side
7
300
300
120
110
610
Expenditure Approach
Y=C+G+I+(X-M)
610 =200+100+(310-10)+(120-110)
Where:
C = Final consumption expenditure by households
G = Final consumption expenditure by general government
I = Gross capital formation (GFCF+ change in inventories)
Where : C + G + I = Gross domestic expenditure 600
X – M = 120-110 = 10
=
Expenditure on Gross domestic product (GDP) 610
Private consumption expenditure
Sum of final consumption expenditure on goods and
services by resident household
Durable goods – 7%
Semi-durable goods - 9%
Non-durable goods - 41%
Services - 43%
Final consumption expenditure by
households
R millions
Durable goods
15
Semi-durable goods
16
Non-durable goods
80
Services
89
Total PCE
200
10
Government consumption expenditure
Reflects current and capital spending in general
government
Central government
Provincial government
Local government
Current expenditure on salaries and wages - 58%
The rest is expenditure on goods and services by e.g
Defence
Health
Education
Housing
Social welfare
Final consumption expenditure by
general government
R millions
Current expenditure on salaries and wages
80
Plus Expenditure on other goods and services
25
Plus Consumption of fixed capital
10
Less fees and charges
15
Equals Final consumption expenditure general government 100
12
Government consumption expenditure
Reflects current and capital spending in general
government
Central government
Provincial government
Local government
Central government – Defence, National government,
Extra-budgetary institutions, Social Security
Provincial government – 9 provincial government
authorities
Local government - municipalities, metro councils
Collection of data
Compensation of employees – 58%
Other goods and services – 44%
Defence
Health
Education
Housing
Social welfare
Consumption of fixed capital – 10%
Less: Fees and charges – 12%
–
–
Licence fees
Entrance fees
Collection of data - sources
Quarterly
Information from Public finance division
–
Treasury, SARS, F04, Stats SA
Department of Defence
Annually
Statistics Releases from Stats SA such as:
Consolidated Expenditure by the General Government
Sector: P9119.4
National Government Expenditure: P9119.3
Financial Statistics of extra-budgetary accounts: P9102
Provincial Government Expenditure: P9121
Financial Statistics of local authorities: P9114
Process of estimation - continued
NA adjusts GFS data to accrual basis
– Where it can identify specific large transactions, such
as the delay of certain payments from the end of one
month to the beginning of the next
– COE - adjustment are made only in extra ordinary
cases such as strike, backpayments
– Goods and services – bulk payments can cause
quarterly fluctuations and distort the expenditure pattern
(payments are spread throughout expenditure period
but not recorded when actual payments are made)
– Although there are accrual adjustments, NA , GFS and
Statssa fiscal year totals are always the same
■ Depreciation is calculated on the capital stock of GG
- per asset type according to the economic life
time of the asset
- per level of government
Deflation
Compensation of employees
A constant level for COE is determined in the
benchmark year.
By extrapolating this level with the QES number of
employees growth rate, the constant value is
calculated.
Goods & services
Use PPI to deflate G & S
Consumption of fixed capital
Use PPI to deflate current values
Fees & charges
Deflate the current figure using a derived deflator
(Current COE+G & S/Constant COE+G & S)
Gross Capital Formation
Gross Capital Formation
=
I
Gross Fixed Capital
Formation
Inventories
Gross Fixed Capital Formation
Gross Capital Formation
Domestic fixed investment on new assets
Private sector
Public corporation
General government
Country’s capital stock on
Residential buildings
Non-residential buildings
Construction works
Transport equipment
Computer equipment
Machinery and equipment
Gross Fixed Capital Formation
•
According to institution
Private sector
44
General government
69
310
According to asset type
Residential buildings
24
Non-residential buildings
35
Construction works
99
Transport equipment
36
Machinery and equipment
92
Computers and other equipment
18
Transfer costs
Total GFCF
•
197
Public corporation
Total GFCF
•
R millions
According to economic activity
6
310
Inventories
Reflect goods that has been produced during a
certain period but has not been sold
Production – sales = stocks
Raw materials
Work-in-progress
Stockpiling of strategic goods
Inventories
Reflect goods that has been produced during a
certain period but has not been sold
Production – sales = stocks
Raw materials
Work-in-progress
Stockpiling of strategic goods
Change in inventories
•
Reflect goods that has been produced during a
certain period but has not been sold
•
Production – sales = stocks
•
Raw materials
•
Work-in-progress
•
Stockpiling of strategic goods
R millions
-10
Collection of data
Agriculture
 Info from Department of Agriculture
Mining
 N01’s
 Gold: Chamber of mines, Dept of Minerals and Energy - Q,
BOP - Price
Manufacturing
 N01’s
Electricity, gas and water
 N01’s
Construction
 N01’s
Collection of data - continued
Trade
 N01’s
 Agric stock-in-trade - SAGIS
Transport and communication
 N01’s
Finance
 N01’s
Services
 N01’s
Net exports
Exports – Imports = Net exports
Main components of the external account
C + G + I = GDE
C + I + G + (X – M) = GDP
Process of estimation - continued
Gross National Income
GNI =
GDP + primary income from the rest of the
world – primary income to the rest of the world
GDP → level of economic activity in the
country
GNI → indication of income in the country
Gross Saving
Saving
Household saving
Corporate saving
Government saving
Saving
Household saving = PDI - PCE
Government saving = Current income of
government - Current expenditure
Corporate saving = Current income of
business enterprises - Current expenditure
S = I
S>I (BOP SURPLUS)
S<I (BOP DEFICIT)
Challenge
Quarterly national accounts constitute a system of
integrated quarterly time series coordinated
through an accounting framework. However the
constraints of data availability, time, and
resources mean that QNA are usually less
complete and reliable than annual national
accounts (OECD)
Thank
you for
your
attention!