African Centre for Statistics United Nations Economic Commission for Africa Expert Group Meeting to review the Handbook on SUT: Compilation, Application and Good Practices Economic Statistics and National Accounts Section African Centre for Statistics (ACS) United Nations Economic Commission for Africa (UNECA) Addis Ababa, Ethiopia October 2011 Chapter 7: Balancing supply and uses African Centre for Statistics Outline of the presentation Example 1 (Manual balancing) Example 2 (Manual balancing) Driving factors (of the manual balancing) Automatic balancing: RAS Method Comments Questions for discussions African Centre for Statistics Example 1: garments African Centre for Statistics Example 1: Firm figures The compiler decides on firm figures: Imports and exports Taxes and subsidies Government and NPISH consumption expenditure Gross fixed capital formation Changes in inventories African Centre for Statistics Example 1: Data sources The compiler analyses data sources to identify weaknesses : For households expenditures, the coverage of the survey can be criticized: Decision to reduce it of 4% For domestic production, the survey was made three years ago and the coverage can be criticized (because of the type of enterprises producing this type of products): Domestic production becomes a balancing item African Centre for Statistics Example 1: Balanced table African Centre for Statistics Example 2: Advertising services African Centre for Statistics Example 2: Analysis VAT are paid by HH: Estimation of HH expenditures is possible HH expenditure = (Tax amount / % VAT) + Tax amount Government does not usually purchase this type of products: Enterprises must have purchased these products as intermediate consumption African Centre for Statistics Example 2: Balanced table African Centre for Statistics Driving factors Identification of consistent figures to define pivots Identification of the weaknesses of the data sources: adjustments needed Experts opinion and good knowledge of the economy are important Type of products under analysis will help also African Centre for Statistics Chapter 7: Automatic balancing Example of balancing through the usage of the RAS method African Centre for Statistics RAS Method: assumptions There exist an input-output table estimated from full-data for a past year. Row and column sums for the input-output table of the present year are available. The content of the matrix is empty. African Centre for Statistics RAS method: objectives Objective: finding a set of multipliers to adjust the columns and the rows so that the sum of the cells of the adjusted matrix will be equal to the required rows and columns. African Centre for Statistics RAS Method: mathematical background A(1) = Coefficient matrix of the benchmark year Matrix of multipliers: substitution effects Matrix of multipliers: fabrication effects African Centre for Statistics RAS method: example (1/5) Benchmark year matrix African Centre for Statistics RAS method: example (2/5) Year 1 Coefficient matrix of the benchmark year African Centre for Statistics RAS method: example (3/5) First iteration African Centre for Statistics RAS method: example (4/5) Adjustment resulting from the 1 st iteration African Centre for Statistics RAS method: example (5/5) African Centre for Statistics Comments Presentation of the RAS method is not easily accessible For the manual balancing, it would be good to list the key factors which do give orientations to the SUT compilers African Centre for Statistics Questions for discussions What are the missing elements in the list of key factors used for manual balancing? What are the advantages, the disadvantages resulting from the usage of the RAS method? What is the bias resulting from the usage of the RAS method? African Centre for Statistics United Nations Economic Commission for Africa Thank you Please visit us at Website: