1 selected issues with implementation of 2008 sna (continued) training workshop on system of...

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Selected Issues with Implementation of 2008 SNA (continued)

Training Workshop on System of National Accounts for ECO Member Countries

14-17 October 2012, Tehran, Islamic Republic of Iran

United Nations Statistics Division

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Mineral exploration and evaluation Measurement of FISIM Exhaustiveness of national accounts (non-observed

economy and informal sector)

Outline of Presentation

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Mineral exploration and evaluation

Value of expenditures on exploration for petroleum and natural gas and for non-petroleum deposits and subsequent evaluation of the discoveries made

Includes• Prelicence costs • Licence and acquisition costs• Appraisal costs• Costs of actual test drilling and boring• Costs of aerial and other surveys, transportation

costs, etc to carry out such tests• Re-evaluation costs

Gross fixed capital formation whether successful or not

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Mineral exploration and evaluation

Valuation Own account

• Sum of costs including return to fixed capital (for market producers)

Contracted out• Explicit fee

Data sources Survey of mining enterprises

• Census is preferable due to volatility

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FISIM - Concept

Indirect measure of the value of financial intermediation services provided but for which financial institutions do not charge explicitly

Needs to be imputed because no explicit fees are charged Split actual interest transactions into

• SNA interest• FISIM

Applies to loans and deposits• Financial institutions

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FISIM - Concept

FISIML = FISIM on loans FISIMD = FISIM on deposits rL = lending rate rD = deposit rate rr = reference rate YL = stock of loans YD = stock of deposits rL YL = actual bank interest receivable on loans rD YD = actual bank interest payable on deposits rrYL (rrYD) = SNA interest on loans (deposits)

• Record in allocation of primary income account

L D L L D DFISIM FISIM FISIM r rr Y rr r Y

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FISIM - Concept

Reference rate

Between interest rates on loans and deposits No service element Reflects risk and maturity structure of deposits and loans One reference rate per currency One method

• Simple or weighted average of the ratio of interest payable on deposits to the stock of deposits and ratio of interest receivable on loans to the stock of loans

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FISIM – Estimation and Allocation

Bottom-up method If complete data on average stocks of loans and deposits

and interest by sector from monetary authorities are available

Calculate FISIM on loans to each sector Calculate FISIM on deposits to each sector Sum up to get total FISIM

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FISIM – Estimation and Allocation

Top-down method If complete data on average stocks of loans and deposits

and interest by sector from monetary authorities are not available

Calculate total FISIM on loans Calculate total FISIM on deposits Distribute total FISIM on loans (deposits) to each sector

in proportion to average stocks of loans and deposits (from other sources)

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FISIM – Estimation and Allocation

Households FISIM on loans to households sector

• Owners of dwellings (dwelling loans) • Owners of unincorporated enterprises • Other loans (final consumption expenditure)

FISIM on deposits to households sector • Owners of unincorporated enterprises (intermediate

consumption) • Deposits as final consumers (final consumption expenditure)

Intermediate consumption

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FISIM – Estimation and Allocation

Households Complete breakdown of data not always available Allocate FISIM on loans to

• Owners of dwellings (dwelling loans) • Owners of unincorporated enterprises • Other loans (final consumption expenditure) Using indicators such as breakdown of data on loans

from other sources

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FISIM - Estimation

Households Allocate FISIM on deposits to

• Owners of unincorporated enterprises (intermediate consumption)

• Households as final consumers (final consumption expenditure)

Using indicators from other sources such as• Ratio of stocks of deposits to VA for smallest size

corporations • Ratio of stocks of deposits to turnover for smallest size

corporations Other solutions?

• Equal split?• Professional judgement

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Need to ensure whole of economic activity within the SNA production boundary is measured comprehensively

Exhaustiveness of coverage of national accounts Ensures availability of good quality national accounts for

economic policy making and research

Exhaustiveness of National Accounts

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Non-observed economy (NOE) Extent of economic activity missing from statistical data

collections and from administrative sources 5 problem areas that are most likely to be non-

observed are:• Underground• Illegal• Informal sector• Household production for own final use• Deficiencies of basic data collection programme

(statistical underground)

Exhaustiveness of National Accounts

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Methods to measure NOE Direct surveys

• Expenditure and income surveys Indirect statistical methods

• Supply based approaches, including labour input method

• Demand based approaches• Income based approaches• Commodity flow approach

Exhaustiveness of National Accounts

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Informal sector (ILO concept) Consists of units engaged in production with the purpose of

generating income and employment for the person concerned

Characterised by a low level of organisation, informal employment relations (e.g. oral agreements), with little or no division between labour and capital as factors of production, on a small scale

Production units have features of household enterprises At least some of production should be sold or bartered Coverage restricted to employment size below certain level

or units which are not registered Confined to non-agricultural activities

Exhaustiveness of National Accounts

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Informal sector (2008 SNA operational guidelines) ILO concept always regards informal sector as a subset of household

unincorporated enterprises operating within the production boundary of the SNA

Excludes the following from SNA households sector• Institutional households such as prisons, and retirement homes• Households with no production activity• Produce exclusively for own final use• Households whose only activity is the production of services from

owner-occupied dwellings or the production of services by employing domestic staff or both

• Agricultural production Consider national practices in establishing the households sector to

see if any adjustment to the first step is necessary• Exclude NPISHs if included in households sector

Provides breakdown by type of activity so that common exclusions according to type of activity can be made

Exhaustiveness of National Accounts

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Approaches to measuring activities of informal sector Household surveys Establishment surveys Mixed household-enterprise surveys

Exhaustiveness of National Accounts

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Questions?

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Thank You