Historical Perspective
• First attempt in 1961/62 by then
Ministry of Economic Planning
• Gap of two years
• Responsibility shifted to CBS
• Continuation after 1964/65
NA compilation practices
• GDP predominantly based on Value
added approach
• Separate estimates of expenditure
components except change in stocks
• Change in stock: residually estimated
• No explicit statistical discrepancy
• Attempt to produce GDP by income
approach
Rebasing and linking practices
Analytical and Mechanical re-referencing
Base year
• 1964/65 – Analytical and First NA series
• 1974/75 – Analytical
• 1984/85 – Analytical
• 1994/95 – Mechanical linking
• 2000/01 - Analytical
Demand Components
• Final Consumption Expenditure
– Government
– Households
– Nonprofit institution serving households
• Capital Formation
– Gross fixed capital formation
– Change in stocks
• Net exports
– Exports
– Imports
Measuring Household
Consumption
• HIES Resolution
– Households Consumption Expenditure
• Value of consumer goods and services acquired,
used or paid for by a household through direct
monetary purchases, own account production,
barter or as income in kind for the satisfaction of
the needs and wants of its members
– Actual final consumption of Households
• Sum of its household consumption expenditure
and the value of consumer goods and services
acquired or used by the household through
transfers from government, non-profit institutions
or other households
Household Consumption
• Major Data Source
–
–
–
–
Household Survey
Retail Survey
Balance of payments
Value added tax
• Income and consumption link
– functional relationship between
disposable income and consumption
• Commodity flow
Compilation practice in Nepal
• Independent estimates for
–
–
–
–
–
–
Households final consumption expenditure
Government final consumption expenditure
NPISH final consumption expenditure
Gross fixed capital formation
Exports
Imports
• Residual
– Change in stocks
• Statistical Discrepancy
– No explicit discrepancy
– Change in stocks contains discrepancy also
Compilation practice in Nepal
• Household consumption largest single component
– Accounting for around 80% of GDP
• Benchmark data
– Nepal Living Standards Survey (NLSS)
– Balance of Payment
• Extrapolation
– Population growth rate
– CPI for food, non food and service separately
• Price system applied
– Acquisition price
– Includes non-deductable VAT and other taxes on products
– Includes all types of margins
• Income Consumption Link
– Some exercise had also been carried out.
Coverage and sources
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2
3
4
5
6
7
8
9
Coverage
Source
Goods and services bought for final consumption
by households
NLSS*
Goods produced for own final consumption by
households
NLSS
Services of owner-occupied dwellings
NLSS
Goods and services acquired by households in
barter transactions for final consumption
NLSS
Goods and services received by households as
payment in kind from producers
NLSS
Expenditures incurred in “do- it-yourself”
decoration, maintenance and routine repairs of
own dwellings and personal goods
NLSS
Payment to government units to obtain various
kinds of licenses, permits, certificates, passports NLSS*
Explicit and imputed service charges on household
uses of financial intermediation services provided
by banks, insurance companies, pension funds
NLSS*
Purchases made outside the residence territory
BOP
Nepal Living Standards Survey
Consumption related questions at a glance
Classification adopted
• COIPCOP
– Not adopted yet
• Disaggregation is based on
– CPI components
• Correspondence
– NLSS consumption headings and CPI
components
Major CPI Components
FOOD & BEVERAGES
Grains and Cereal Products
Pulses
Vegetables and Fruits
Spices
Meat, Fish and Eggs
Milk and Milk Products
Oil and Ghee
Sugar and Related Products
Beverages
Restaurant Meals
NON-FOOD & SERVICES
Cloth, Clothing & Sewing Services
Footwear
Housing Goods and Services
Transport and Communication
Medical and Personal Care
Education, Reading and Recreation
Tobacco and Related Products
Actual Final Consumption
• Sum of household consumption
expenditure, individual consumption
expenditure of Government and
consumption expenditure of NPISH
Consumption in Figure
2007/08
2008/09
2009/10
895,042 1,085,292
Final Consumption Expenditure
735,470
Government consumption
80,663
106,527
124,268
Collective Consumption
54,996
69,838
82,366
Individual Consumption
25,667
36,689
41,902
641,085
772,762
942,979
Food
385,037
484,552
598,818
Non-food
179,999
203,232
243,262
Services
76,049
84,978
100,899
13,721
15,753
18,045
Household consumption
Nonprofit institutions serving households
Actual final consumption expenditure of households
in millions Rs.
680,474
825,204 1,002,926
Typical Issues
• Credit issues
– may involve three distinct components
• price of the goods itself- It is Consumption
• expenses of the financial company
making loan: It is Consumption
• interest payments: Not consumption
• No such distinctions are made
• Unincorporated Household Sector
– Spending is intermediate consumption
• No such analysis has been done
General Issues/Limitations
• Systematic Errors
– Sampling error of the survey itself
• Coverage Errors/Uncertinities
– goods and services purchased infrequently
• Economy of Scale
• Supply and Use tables
What's new in Supply and Use
Table
• Independent estimates for change in
stocks for 2004/05
• New level for household consumption
– Estimates for around 52 different good
and services
– Commodity flow approach
– around 5% higher than published one.
– Adjustment for FISIM allocation
Scheduled program
• Follow up consumption survey
• Exploring the VAT and government
account detail
• Separate treatment for
• Infrequent Goods and services bought for final
consumption by households
• Payment to government units to obtain various
kinds of licenses, permits, certificates,
passports
• Explicit and imputed service charges on
household uses of financial intermediation
services provided by banks, insurance
companies, pension funds
• Change in Stocks
Thanks