HOPS MEETING Secretariat of the Pacific Community Noumea

HOPS MEETING, Secretariat of the Pacific Community, Noumea, New Caledonia - 12 July - 16 July 2010, NATIONAL ACCOUNTS REBASING VNSO: EXPERIENCE & LESSONS LEARNED Presentation by: Vanuatu National Statistics Office

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 Content I. Background II. The rationale for rebasing GDP III. The major changes undertaken during the rebasing exercise IV. Capacity to compile National Accounts V. Areas identified for future improvements VI. Concluding Summary. Slide # 2

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 Background l l Mid 90’s to mid 00’s, the weakening of the ES was mainly due to staff turnover and delays in recruitment processes; To rebuild its Economic Statistics, VNSO initiated an Institutional Strengthening Program (ISP) to engage ABS’s assistance. Slide # 3

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 Background l The NA rebasing project was part of VNSO’s ISP through which two TA’s were engaged. One was funded by Aus. AID, and the second one by PFTAC Slide # 4

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 II. RATIONAL TO UNDERTAKE A REBASE OF NA l l NA a formal framework for classifying information about economic performance; NA serves as a tool for policy formulation, monitoring and evaluation; Economic structural changes over time may render NA estimations unreliable; To get real performance of the economic, it is essential to revised the accounts regularly, this is done through the Rebasing Exercise Slide # 5

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES l l l Current GDP changes are due to Quantity and prices changes; Real GDP changes are attributed to Quantity changes as price is kept constant (the base year price) During the undertaking the 1983 base was updated to 2006 base. Slide # 6

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES l Rational for the choice of the reference year 2006 as NA new base year: - It was a normal year, - the availability of the 2006 HIES data, - CPI was rebased, and - the 2007 Ag. Survey data; Slide # 7

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES l In a rebasing exercise, the change in the level of the real GDP is effected by two factors: the price effect and the coverage effect; Slide # 8

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES Slide # 9

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES l l Price effect is due to the change from 1983 prices to 2006 prices Coverage effect is due to changes in methodologies, data sources, and classifications Slide # 10

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES Conceptual treatment l l l Production approach (enhanced); Expenditures method of circular flow becomes an independent method; Income method discontinued till data is made available (VNPF), and LMS Slide # 11

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES Methodological Changes l l l Production estimation: Improvements Only improvement for industries using VAT data, where IC and Output are to derive the GVA; Used to move output by output from VAT, with input ratio and GVA ration Slide # 12

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES Methodological Changes l l l Expenditure estimation: Old system PFCE estimated as residual from circular flow method; With the HIES data the PFCE (ind. ) NPISH FCE; Improved deflators for ETA Slide # 13

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 III. REBASING AND MAJOR CHANGES Improved data sources l l For Production: VAT data, GFS, Trade (Goods), (Ag. Census) For Expenditure: GFS, HIES for PFCE and Own production Slide # 14

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 IV. UPDATE OF CLASSIFICATION Agriculture Sector NEW (ISIC REV 4) Slide # 15

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 IV. UPDATE OF CLASSIFICATION Industry Sector (NEW (ISIC REV 4) Slide # 16

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 IV. UPDATE OF CLASSIFICATION Services Sector (NEW ISIC REV 4) Slide # 17

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 V. CAPACITY TO PRODUCE NA l l ES is re-organised to engage all staff in NA data collection and estimation for ANA and even cater for QNA Plans are underway to engage more USP graduates (OS and economic). One has already taken over responsibility over the NA estimation even conducting in-house training; Slide # 18

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 V. AREAS FOR IMPROVEMENT l l l Ensure 2010 HIES data quality warrant the next rebasing, and hopefully a reliable HH income; Use Pop Census HH list and hopefully business activity list as sampling frame for HIES and business activity survey; ES to improve in its planning – realistic plan Slide # 19

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 V. AREAS FOR IMPROVEMENT l l Work with VNPF to develop the data on employment data, and income & wages for the income approach; Work with Customs, VAT, rates & tax sections and VNPF to come up with unique identifier for businesses; Slide # 20

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 VI. CONCLUSION l l l Vanuatu has rebased from 1983 to 2006; Changes were made in methodology; data sources, and classifications ES has a new officer responsible for NA estimation and NA in-house trainings, Preparation to accommodate more graduates in OS, and Economics; Some issues for the ES to work on Slide # 21

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 POINT FOR DISCUSSION l Since surveys and Census undertakings are very expensive exercises, it is therefore critically essential that NSOs consider the need for statistical coordination and integration seriously to ensure the data collected meet not only the NA estimation needs but also the NA rebasing and other requirements. Slide # 22

HOPS 2010, SPC, NOUMEA, 12 – 16 JULY 2010 Slide # 23