Methodology of National Accounts
Methodology of National Accounts
National Account series covering the years 1993 to 2002. It is an update of national accounts estimates prepared by the National Institute of Statistics (NIS), Ministry of Planning (MOP), with the assistance of the Asian Development Bank (ADB) under the statistical system Development project (TA 3293-CAM) phase 3 and the International Monetary Fund (IMF) under the technical Assistance Cooperation Plan. It includes revised estimates for 1993 to 2001, and the preliminary estimate for 2002.
The updating of the national accounts series is done side by side with improvement of the estimation techniques and source data, while maintaining the consistency of the whole series. Updates of the data series used in previous estimation rounds, as well as, new data series were used in this estimation round.
2- Concepts and Definitions
National Account statistics are compiled broadly in accordance with SNA93 standards. SNA93 concepts and definitions are used consistently, wherever source data permits, for determining residence, valuation, time of recording, unit of account and conversion. While the implementation of SNA93 standards is progressing, it is expected to take several years to fully implement.
The Annual National Account (ANA) statistics consist of a progressively expanded set of tables that cover the period 1993 onwards. Gross Domestic Product (GDP) is estimated on both production and expenditure approaches and at current as well as constant 2000 prices. In additional, experimental GDP estimates based on the income approach are compiled.
2.1 Production Approach
GDP by the production approach are published for the three broad economic sectors:
Agriculture sector, comprising Crops ( paddy rice, maize, other cereals, cash crops, rubber, fruit and vegetables ) , Livestock (buffalo, cows and pigs) and poultry (ducks and chicken), Fisheries (inland and marine fish catch), and Forestry and Logging;
Industry sector, comprising Mining, Manufacturing ( which is subdivided by food beverages and tobacco; textile wearing apparel and footwear; wood, paper and publishing, rubber manufacturing and other manufacturing), Electricity, gas and water; and construction, and
Services Sector, comprising Trade (wholesale and retail), Hotels and restaurants transport and communications; Finance; Public administration; Real estate and other business services; and other services.
The GDP adjustments-net taxes (taxes on products less subsidies) and financial intermediation services indirectly measured ( the FISIM or financial service charges) - are also monitored. No sector accounts ( NA by institutional sector ) are compiled at this stage.
2.2 Expenditure Approach
GDP by expenditure share are published for the main components:
Household final consumption expenditure;
Private non profit organizations serving households;
Government consumption expenditure (collective consumption);
Gross Fixed Capital Formation, subdivided by working livestock, durable equipment and construction;
Increase in stocks in livestock and poultry, and in industry;
Exports of goods and services, subdivided into merchandise, measured free on board ( f.o.b), and services; less
Imports of goods and services, subdivided into merchandise, measured f.o.b., and services
A statistical discrepancy is also monitored and provided on the GDP by expenditure share of the accounts
2.3 Income Approach
GDP by factor income is also published on an experimental basis by industry group. The main components are
compensation of employees, mixed income, gross operating surplus, taxes on products less subsidies, and
financial service charges.
3- General Methodology
The updating of the national accounts series is done side by side with improvement of the estimation techniques and source data, while maintaining the consistency of the whole series. Updates of the data series used in previous estimation rounds, as well as new data series, are used in each estimation round.
The estimates are expressed in current and constant prices for all years. Estimates at constant prices refer to the values for the current year valued at base year prices. Currently the base year for prices is 2000. The general methodology adopted for the estimation of GDP at constant 2000 prices is the deflation technique. Current price estimates are deflated using price indices.
GDP is estimated using two approaches. One is GDP by economic activity (production measure) and the other is GDP by expenditure share. GDP levels estimated using the expenditure approach are used to crosscheck the GDP levels estimated using the production approach (GDP economic activity). A statistical discrepancy is included in the computation of GDP by expenditure share. In the course of the estimation, one of the main concerns of national account Compiler is to reduce the statistical discrepancy to a minimum. GDP based on the income approach is also produced, on an experimental basis, as good quality source data are not available. Experimental income account aggregates are estimated once production account of Gross Value Added (GVA ) estimates have been finalized.
Revisions to NA estimates are frequent and generally significant, as access to new source data improves over time and revised data from NIS, ministries and other agencies become available. With the accumulation of several years worth of data from various source the opportunity is also taken to look at trends in the time series and to make adjustments for earlier years when the data was less reliable. These revisions have improved consistency between the production and expenditure series and improved the year on year movements for some items earlier in the series. They have also helped to reduce the statistical discrepancy to three percent or less of GDP in constant prices.
As in previous estimation rounds, each important sector of the economy is estimated using a worksheet specifically designed to allow for the utilization of whatever information is available for the sector . The worksheet consists of three parts, the estimation of gross value added (GVA) in current prices using the production approach, the use and supply analysis and the estimation of GVA at constant prices.
As with the first estimation round in 1996, the techniques adopted in the 2002 and 2003 estimation rounds have been to establish benchmark levels and to establish the methodology for updating the accounts between benchmarks. When previously used data series were not available, alternative techniques, have been adopted. To capture the changes in the economy through the years, various indicators have been developed. Employment, sale and average compensation indices are compiled from the results of small surveys conducted by NIS. These are used to interpolate and extrapolate results of one-shot or or irregular surveys and studies. These indicators are used together with the various administrative data that are provided by the ministries and government agencies. In each estimation round an effort is made to improve the consistency of the estimation techniques over time for each series.
On the production side, GDP reflects gross value added (GVA) estimates, derived by applying the GVA relatives (GVAR) to the gross output of different industries, based mainly on the 1993 and 2000 SIE (Survey of Industrial Establishments). The gross output and the GVA for each economic sector are estimated on the basis of worksheets providing the available relevant information.
On the expenditure side, GDP estimates indicate final consumption expenditures of households, private non-profit organizations serving households and of general government; expenditures on working livestock, durable equipment and construction; changes in inventories of livestock and poultry, and changes inventories in industry; net exports; and the statistical discrepancy.
Household final consumption expenditure (HFCE), which is the major component, was initially estimated on the basis of Socio-Economic Survey of Cambodia (SESC) 93-94 and SESC99. Population growth and price movements were subsequently used to adjust the estimates. The results of succeeding household budget surveys (SESC96 and SESC97 ware used to validate the HFCE estimates). The estimates were subsequently reconciled in 2003 between the SESC93-94 and SESC99 benchmarks.
Private non-profit organizations serving households expenditure is estimated on the basis of annual non-government organizations' expenditure data collected by the Council for the Development of Cambodia (CDC).
Government final consumption expenditure is estimated on the basis of monthly government accounts maintained by the Ministry of Economy and Finance (MEF).
The expenditure on durable equipment is estimated on the basis of commodity flow data that reflects the supply and use of capital goods. The expenditure approach is applied to estimate construction activity. Changes in inventories are estimated on the basis of data provided by the Ministry of Agriculture, Forestry and Fisheries (MAFF). Exports and imports of commodities are based on NBC BOP data crosschecked using CED (Customs and Excise Department) foreign trade and the MoC GSP (Ministry of Commerce, Generalized System of Preferences Department) exports data. The quarterly and annual balance of payments data compiled by the National Bank of Cambodia (NBC) are used for estimating external trade in services.
The estimates of forestry production are crosschecked with the Customs Department data on exports and by the information on supplies of construction materials. Prices provided by the MAFF are adjusted with reference to those collected in Phnom Penh and five other urban centers for Consumer Price Index (CPI) compilation. The production approach is balanced by the expenditure approach to GDP estimation in order to minimize the statistical discrepancy.
No seasonal adjustments are made at this stage due to the lack of reliable time series data. At the same time, no double deflation method is applied to GDP, since only gross output is estimated; intermediate consumption is not estimated, except for the 1993 and 2000 benchmark years. The published GDP growth rates are based on final administrative data and available survey data for the reference year and are estimates at 2000 constant prices.