Why Economic Census is Important?
- The case of National Income in Korea
July 6, 2009
Kang, Changku
Economic Statistics Department
The Bank of Korea
Outlines
Ⅰ
National Accounts in Korea
Ⅱ
Estimation of National Income
Ⅲ
Rebasing National Income Statistics
Ⅳ
Conclusion
2
Ⅰ
National Accounts in Korea
3
I. National Accounts in Korea
Circular Flow of Income
4
I. National Accounts in Korea
Relationships among Five sets
of National Accounts Statistics
5
I. National Accounts in Korea
Equivalence of the three approaches
 Production-side National Income
= Distribution-side National Income
= Expenditure-side National Income
Estimation Methodology
 In Korea, national income has for many years been
essentially estimated using production approach method
6
I. National Accounts in Korea
Periodicity and Announced Contents
7
I. National Accounts in Korea
8
I. National Accounts in Korea
Estimation procedure
 Collection of basic materials
 Estimation of national income from output approach (By
commodity)
 Estimation of production-side national income (By industry)
9
I. National Accounts in Korea
Brief History of GDP statistics
 In August 1957
- the BOK was designated as Korea's official institution to
compile GDP statistics.
 In 1958
- published the GDP statistics by kind of economic activity and
expenditure on GDP during the period of 1953-57, according
the 1953 SNA
 In 1968
- starts to publish quarterly GDP to meet the increasing demand
for short-term economic indicators
10
I. National Accounts in Korea
Brief History of GDP statistics (continued)
 In 1989
- consolidates GDP statistics and Input-Output tables, according
to the 1968 SNA
 In 2004
- The BOK had revises GDP statistics on the basis of the 1993
SNA recommendations
 In 2009
- rebasing from 2000 to 2005
- adoption of the annual chain-linking method
- expenditure component measured directly
- updated classification of GDP by industry
11
Ⅱ
Estimation of National Income
12
II. Estimation of National Income
Quarterly and Annual GDP
 In general, VA is made by the method to deduce the value of
intermediate input from the value of output
 In some cases, VA is made by the method to extend the VA of the
same period of the previous year with rates of change in real
output during the relevant period
 In public administration and national defense, widely different
from other economic activities, VA is estimated first by applying
the quarterly performance ratio to relevant item on the
government’s budget document.
- And the value of output is found later by adding up intermediate
input and VA
13
II. Estimation of National Income
Quarterly GDP (Data Sources)
Name of Material
Institution in Collectio
Charge
n Period
Major Contents
Industrial Production
Index
KNSO
Monthly
Production, shipment,
inventory index by item
Service Industry Activity
Index
KNSO
Monthly
Information at each
service industry
Producer Price Index
BOK
Monthly
Output deflator,
Intermediate input
deflator
Consumer Price Index
KNSO
Monthly
Index by each item
Crops Statistics
Ministry of Quarterly
A. & F.
Cultivation area
Livestock Statistics
Ministry of Quarterly
A. & F.
Net increase
…
…
14
…
…
II. Estimation of National Income
Annual GDP (Data Sources)
Name of Material
Institution
in Charge
Collection
Period
Mining and
Manufacturing Survey
Report
KNSO
The following Production amount by
year
item; Major production
cost
External Trade Estimate
of National Tax Service
NTS
The following Sales amount, cost of
year
sales, VA items, etc
Report on the survey of
wholesale and retail trade
KNSO
The following Sales amount, cost of
year
sales, VA items, etc
Service Industry Survey
KNSO
The following
year
Information at each
service industry
…
…
…
…
15
Major Contents
Ⅲ
Rebasing National Income Statistics
16
Ⅲ. Rebasing National Income Statistics
 Changing Reference year
- reflect recent economic conditions
- improve the quality of statistics
 Main Changes
- More relevant data (census data) are used
- VA ratio, intermediate input ratio
- time series are changed
17
Ⅲ. Rebasing National Income Statistics
 Changes reference year from 2000 to 2005
- done for 1st step on May in 2009
* will finish until 2009
- Manufacturing
* reflect 2005 I/O table result
- Wholesale and retail trade
* the nominal margin, VA ratio
- Housing Services
* reflect 2005 Housing Census
* change the level of stratification( 2 step  4 step)
18
Ⅲ. Rebasing National Income Statistics
 Revision result of Nominal GDP (Old vs. New)
- mainly reflect the census result
- changed estimation method, reflect new products
Result of Nominal GDP (Old vs. New)
(trillion won, %)
Year
New (A)
Old (B)
(A – B)
(A-B)/B
2000
603.2
578.7
24.5
4.2
2003
767.1
724.7
42.4
5.9
2005
865.2
810.5
54.7
6.7
2007
975.0
901.2
73.8
8.2
19
Ⅳ
Conclusion
20
Ⅳ. Conclusion
 The census data are important in National Accounts
- estimation of GDP is based on the survey data
- rebasing work is based on the census result
- build the foundation of GDP every 5 years
 Consistency issues
- regular frequency (5 year?)
- consistent with census and yearly survey
* conduct yearly survey continuously?
21
THANK YOU
Q&A