Transcript The Jamaican System of National Accounts

Implementation of 2008 SNA
in Jamaica
Outline
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Policy issues - relationship with national
accounts framework
The Jamaican System of National Accounts
Current compilation procedures
New requirements for 2008 SNA
Other improvements to the accounts
Next Steps
Policy Issues
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Vision 2030
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National Development Plan for Jamaica
Outlines national goals, strategies & outcomes
National Outcome #7: A Stable Macro economy
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Fiscal balance of 0% of GDP
Debt to GDP ratio of 75%
Real GDP annual growth rate of 5%
Policy Issues (cont’d)
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As outlined in ‘Fiscal Policy Paper FY 2012/13’ dated
May 24, 2012, GOJ committed to achieving the
following fiscal targets/ceilings by FY 2015/2016
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Fiscal balance of 0% of GDP
Debt to GDP ratio of 100% or less
Wages to GDP ratio of 9%
The Jamaican System of National
Accounts
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Consolidated Accounts of the nation
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GDP by expenditure at current and constant
prices
GDP by income
Generation and use of disposable income
Capital account
Rest of the world account
The Jamaican System of National
Accounts
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Value added by industry
Supply and Use Table
Input Output Table
Tourism Satellite Account
The Jamaican System of National
Accounts
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Currently not included
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Institutional sector accounts
Financial account
Other changes in assets account
Balance Sheet
Current compilation procedures
Jamaican System of National Accounts
 prepared on the 1993 United Nations System of
National accounts (1993 SNA)
 base year for the constant price estimates is 2007
Current compilation procedures
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Annual national accounts estimates prepared using
the production, income and expenditure approaches
Quarterly national accounts estimates prepared
using the production approach
Current compilation procedures
Annual GDP by product
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Estimated at current and constant prices
classification of industries used in the accounts is the
Jamaica Industrial Classification (JIC 2005) -a local
adaptation of the United Nations International
Standard Industrial Classification of all Economic
Activities (ISIC Rev.3)
Current compilation procedures
Annual GDP by product (cont’d)
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a production account is compiled for each product
group in an industry
production accounts by industry are calculated at the
five digit level of the JIC
twelve industry categories - disaggregated into 248
product groups
Current compilation procedures
Annual GDP by expenditure
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Estimated at current and constant prices
Expenditure approach – sum of household spending,
government spending on goods and services,
investment in fixed capital (construction, machinery
and equipment), change in inventory and exports
less imports of goods and services
Current compilation procedures
Annual GDP by expenditure (cont’d)
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Household Final Consumption Expenditure is
classified using Classification of Individual
Consumption According to Purpose (COICOP)
Government Final Consumption Expenditure
currently not classified using COFOG
Gross fixed capital formation is broken down by type
of capital goods
Current compilation procedures
Quarterly GDP by product
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The preparation of quarterly value added estimates
incorporates the use of quarterly indicators to
extrapolate value added by economic activity
Quarterly estimates at constant prices are derived
from quantity indicators or value indicators, which
are deflated by appropriate price indices. Trend
extrapolation is also utilized when there are no
available indicators
Current compilation procedures
Quarterly GDP by product (cont’d)
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The estimates are benchmarked to the annual
estimates using the ‘BENCH’ programme which is a
generalization of the Denton Method. This
programme was developed by Statistics Canada
(STATSCAN)
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The estimates are seasonally adjusted using the
X11ARIMA seasonal adjustment method
New Requirements for 2008 SNA
Ancillary activities
 A producer undertaking purely ancillary activities
should be treated as a separate establishment and
classified according to principal activity
 This methodology is currently being used in the
Jamaican system
New Requirements (cont’d)
Financial Services
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FISIM: Jamaican system
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Currently calculated as property income
receivable less interest payments
Currently allocated between intermediate
consumption (not by industry but rather as a
notional industry) and household consumption
New Requirements (cont’d)
Financial Services
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FISIM should be calculated with respect to a
reference rate
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Output of FISIM = (rL-rr)fL + (rr-rD)fD,
rr=reference rate
rL=interest rate on loans
fL=stock of loans
rD=interest rate on deposits
fD=stock of deposits
New Requirements (cont’d)
Financial Services
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Actions to be taken
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Identify a reference rate that excludes service
charge and reflects the risk and maturity structure
of deposits and loans
Allocate that part of FISM apportioned to
intermediate consumption to user industries
New Requirements (cont’d)
Financial Services
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Output of Central Bank
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Currently being estimated as the sum of costs in
Jamaican system
New recommendation is to separate the services
of the Central Bank into the 3 groups:
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financial intermediation
monetary policy services
supervisory services
New Requirements (cont’d)
Research & Development
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The output of research and development should be
capitalized
Jamaican system
 Research and development activities were not
identified separately on Annual National Income
questionnaire. As a result, these would have been
included in ‘other expenditure’ and treated as
intermediate consumption
New Requirements (cont’d)
Goods for processing
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In the case of goods sent abroad for processing, the
export of the processing country is the processing
fee, which is also the output of the processor as
there is no change in ownership of goods
This methodology is currently being used in the
Jamaican system
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Methodology needs to be harmonized with the
Balance of Payments
New Requirements (cont’d)
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Treatment of employee stock options as
compensation of employees
Valuation of output for own final use by households
and corporations to include return to capital
 These areas require further research to inform
actions to be taken
Other Improvements
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Identify methodology to estimate consumption of
fixed capital of Central Government including public
education and health
Collaborate with the Ministry of Finance to estimate
imputed pension contribution by Government
Revision of Annual National Income questionnaires
Review of administrative data sources
Next Steps
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Classify Government Final Consumption
Expenditure using COFOG
Publish GDP by expenditure at constant prices
Revise JIC based on ISIC Rev 4
Ongoing revisions to the estimation of the nonobserved economy
Introduction of monthly production volume index
and expansion of producer price index
Household Expenditure Survey to be undertaken in
2015
Schedule for Implementation
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The first phase will be completed in 2016
and should cover Milestone 2 of the 2008
implementation, quarterly GDP by
expenditure and improvements to the
national accounts that were not
undertaken in the last major revision to
the system. This should also lead to
improvement in the coverage
Schedule for Implementation
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Institutional sector accounts- gradual
introduction final set of accounts by 2020,
starting with the government sector
STATIN will not be able to implement the
full scope of the SNA
No plans in the medium term to include
the financial accounts and balance sheets
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