General overview of the ICP 2011: National Accounts Activities, Reporting

Requirements and Timetable

Expert Group Meeting on National Accounts in the Caribbean26-28 September 2011

Port of Spain

Outline

1. Overview

2. National Accounts Activities

3. Reporting Requirements

4. Timetable

2

3

Overview

4

What is the ICP?

Using PPPs instead of market exchange rates makes it possible to compare the output of economies and the welfare of their inhabitants in real terms.

ICP is a worldwide statistical initiative to collect comparative price data and estimate purchasing power parities (PPPs) of the world’s economies.

PPP Vs. Exchange

Rate

Main Objectives

Provide international price and volume comparisons of Gross Domestic Product (GDP) and its component expenditures

Measure the differences in price and volume levels of GDP and GDP per capita of various expenditure aggregates and sub-aggregates

between countries within a region

between countries in different regions

Overview

By Households

By NPISHsIndividual

Consumption Expenditure

110

Price

By Government

By GovernmentCollective Consumption

Gross Fixed Capital

Formation

Machinery & Equipment

Construction & Civil Eng.

Others

Other Components

Changes in inventories

Net Exports

Value

From ICP Objective to N.A. in ICPQuantity

Volume Ratio Value ratio PPP

GDP Expenditure Values for 155 Basic Headings, for the reference year 2011

Prices for over 2000 representative products collected over one year in 2011

5

Pressures caused by the need to develop new procedures to collect and validate data led to insufficient attention to the national accounts until late in the process

6

Identified issue

Goals for 2011 ICP

Improving the quality of real expenditures by collecting national accounts data earlier in the process

Identifying the basic headings that are most likely to have a significant impact on the consistency between economies

Lessons from the 2005 ICP

7

1993 SNAThe ICP requires national accounts estimates based on the 1993 SNA

Exhaustiveness of GDP

Various terms are used to describe parts of GDP that fall outside the scope of admin records and statistical surveys on which the national accounts are based

― underground economy, black economy, non-observed economy, informal economy

All economic activities have to be included, whether legal and illegal

Comparability Problems

8

Observed

Non-Observed

Legal

Illegal

FormalInformal

Terms do not always refer to the same thing across economies

Informal economy and the non-observed economy may largely overlap

It is likely that GDP in most economies includes some of the informal economy

Subsistence production/consumption is a potential area of understatement

The scope of economic surveys may exclude some businesses

Comparability Problems [Cont’d]

9

Major Aggregate Data

• Validated major aggregate data

• Metadata

Basic Heading Data• Validated basic heading data

• Metadata

• Population and exchange rate data

Latest Data Available between 2006-2010

Final Data and Metadata

2011 Data

Preliminary Data and Metadata

Final Data and Metadata

Data & Metadata

10

National Accounts Activities

11

National accounts statistics

Basic Heading level data

Prices

Accuracy

Reliability of PPP-deflated GDP

Comparability

ExpendituresConsistency

Role of NA in the ICP

National Accounts Activities Carry out N.A. work

for comp. resistant areas

Use N.A. data to help edit survey prices

Price Surveys

Develop vector of 2011 GDP expenditures

Use Survey Prices in GDP

Implement Price Tracking

12

Prices Final Output

Categories of activities

Implement Commodity Flow

Select Major Products

Identify Data Sources for Major

Products

Prepare Matrix of Data Availability for

Major Products

Compile GDP & Main uses for 2011

Major Products

Review GDP Classification

Early data need to identify & resolve data

problems

Create Metadata Flow Chart for 2005

GDP expenditure

Update Metadata Flow Chart for latest

year possible

Early Metadata Flow Chart for 2011

Structure

Work Flow

1 2 13

3 6

4 78

59

1410

11 12 15

13

Initial Values for L.Y.*

Data Sources

Adjustments to L.Y.*

BH Values for L.Y.*

Price Review for L.Y.*

Commodity Flow

Final Values for 2011

Adjustments to 2011

BH Values for 2011

Price Review for 2011

Variations over time

* L.Y. : Latest year available

Activity Flow Chart

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Reporting Requirements

How We Came Up with the MORES

5 Forms were initially developed

Extensive review

INAG recommendation

MORES

Extensive consultation

2

3

4

5

1

16

Reporting Requirements

National Accounts Quality Assurance Questionnaire

Eurostat “Tabular Approach to Exhaustiveness”

MORES

I

II

III

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Quality Assurance Framework Questionnaires

SNA 93 Compliance

5 groups - 30 questions

Price –National Accounts Consistency

Valuation Rules

ICP Requirements

Recording Rules

Q01; Q02; Q03; Q05

Q04; Q18

Q06; Q08;Q09; Q10; Q11; Q12; Q13; Q14; Q15; Q16; Q17; Q19; Q23; Q24; Q25

Q07; Q26

Q20; Q21; Q22; Q27; Q28; Q29; Q30

1.

4.

3.

2.

5.

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Eurostat tabular approach to exhaustiveness

Systematic method to identify potential sources of understatement in the NA due to omissions from the statistical source data that classify adjustments into seven types of “non-exhaustiveness”

GDP Exhaustiveness Questionnaire

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Seven types of “non-exhaustiveness“

Other statistical deficiencies

Misreporting by producers

Registered entrepreneurs not surveyed

Legal producers not surveyed

Producer not required to register

Producer deliberately does not register (illegal

activities)

Producer deliberately does not register (underground

activities)

Typically includes small producers with income above the threshold set for registration

…because he is involved in illegal activities

…because they do not have any market output or it is below a set threshold

…because the register updating procedures may be slow or inadequate.

…either deliberately or because the register updating sources do not include details of such person

…involves under-reporting gross output and/or over-reporting intermediate consumption

Data that are incomplete or cannot be directly collected from surveys, or data that are incorrectly compiled during survey processing.N7

N6

N5

N4

N3

N2

N1

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Exhaustiveness checks & adjust-ments Initial

national accounts estimates

N1

Adjustments Finalnational

accounts estimates

N2 N3 N4 N6N5 N7Total

Production approach

Expenditure approach

Income approach

Output of goods and services (basic prices)

Intermediate consumption (purchasers’ prices)

...

...

…

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Detailed expenditure values for each basic heading of the ICP classification.

The Model Report on Expenditure Statistics (MORES)

Information on the indicators that were used/or are going to be used to estimate the expenditure values

Information on the splitting approach

The MORES aims to assist countries to compile

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Timetable

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Late

st Y

ear

2011 2012 2013Q4Q3 Q4Q3 Q4Q3Q2Q1 Q2Q1 Q2Q1

P

Major Aggregate Data & Metadata

Basic Heading Data & Metadata

Major Aggregate Data & Metadata

Basic Heading Data & Metadata

NCs to RCs

RCs to GO

P

P

P

F

F

F

F

F

F

F

F

P-Preliminary resultF-Final result

Schedule of SubmissionsYe

ar 2

011

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THANK YOU