Chapter 7. Balancing supply and use
Comments and suggestions.
By Liv Hobbelstad Simpson.
1. Why SNA 1993 and not 2008 SNA
The Global Office has decided to follow
SNA 1993 for conceptual compliance,
since 2008 SNA is yet to be implemented by
the countries (barring few). The NA data to
be supplied for 2011 ICP by the countries
should meet 1993 SNA standards.
COMMENT: National Accounts with SUT
based on final statistics for the year 2011 will
not be compiled before in the year 2013.
Following 1993 SNA in 2013 is a problem for
those countries who are implementing 2008
SNA earlier.
2. The ISWGNA prepared a table on 2008 SNA
implementation milestones to the
42nd session of the UN Statistical
Commission (UNSC), February 2011:
Milestone 1 Basic indicators of GDP
Complementary Data system:
Supply and use table
• The African Development Bank (AfDB), the
African Union (AU) and UNECA has established
an African Group on National Accounts (AGNA)
to foster the implementation of 2008 SNA in
Africa. The AGNA has prepared a ‘Draft
African Strategy for Implementation of 2008
SNA, followed up by training workshops,
seminars, regional meetings.
3. National Accounts with Supply
and Use Tables
• Several countries are using SUT as an integral part of
the compilation of final annual National Accounts at
current prices.
• SUT are used as the framework for balancing National
Accounts and compiling National Accounts aggregates.
• The compiler(s) have to use judgement to reach a
balance by adjusting the components as necessary.
• Some countries also compiling SUT at previous year’s
prices or at a fixed year constant prices.
4. Quality and balancing procedure of SUT
depending of good statistics and other data
• Agriculture statistics and agriculture census. Livestock
censuses, Fisheries statistics
• Annual Economic Survey for large enterprises or for a
sample of enterprises.
• Government Audited Accounts and Budget Documents,
Finance statistics
• External trade statistics, value and quantity data for
imports and exports of goods, custom duty.
• BOP for imports and exports of services
• Integrated Household Survey,
• Consumer price indices
• Population Census, Housing Census
5. Classification important for balancing SUT.
5.1. Output should be classified into the following
main types:
1. Market output - mainly goods sold at “economically
significant” prices.
2. Production for own final use (non-market output)
Important for Africa
3. Other-non-market production, General Government and
NPISHs supplied to other units either free or at prices
that are not economically significant..
5.2. SUT classification for
Industries and Products
If ISIC Revision 4 is introduced for register and
statistics, the industry classification used
should be a NA-ISIC aggregation of ISIC Rev.
4, adapted for the economy of the country.
The product classification for SUT should be a
NA-CPC aggregation of CPC Version 2.0,
Countries establishing SUT for the first time should
start with the new classifications.
5.3. Classification of Final domestic
expenditure
The Use Table should have the following
classification
• COICOP classification for household
consumption expenditure
• COFOG classification for government final
consumption expenditure
• COPNI classification for final consumption
expenditure of the non-profit institutions serving
households (NPISHs)
• Gross fixed capital formation by type and
industry.
6. Balancing SUT at purchasers’ prices or at
basic prices?
6.1. The methodology for balancing SUT is of particular
important for the quality of the National Accounts..
Ref. SNA 1993, chapter C. Supply and use tables,
paragraph 15.57 and 15.58.:
In general, when preparing supply and use tables and
making the balancing between the two sides, there is a
choice between two lines of adjusting statistical data:
Supply of each product at basic prices can be adjusted
to a purchasers’ prices valuation to allow balancing
with uses at purchasers’ prices.
OR
Each of the uses at purchasers’ prices could be
adjusted to a basic prices’ valuation to match with
supply at basic prices.
6.2. Balancing supply and use table at
basic value
SNA 93, paragraph 15.129 The supply and use
table at basic prices are a step forward to the
conversion towards input-output tables at basic
prices.
SNA 93, paragraph 15.161 The supply and use
tables at basic prices are the most complete
consistent framework for constant price
estimation.
6.3. Balancing supply and use table at
purchasers’ value
Adjustment columns required to bring supply at basic
prices up to purchasers’ prices.
To compile the columns of VAT, other taxes and
subsidies and trade margins by products in the Supply
table, the distribution among uses should be known
from the Use table
Only non refundable VAT should be recorded, mainly for
products to Household consumption.
Subsidies as for fertilizer may be paid to all users, while
product taxes may not be paid by some users
as for products to export.
Trade margin can be higher for a product to private
consumption than for intermediate consumption
7. The compilation process for SUT at
current prices
• For estimating the Household consumption figures, the
results from the Household Budget Surveys have to be
evaluated and compared or balanced with other data
sources used for the balancing of supply and use of
goods and services.
• Detailed data for imports and exports of goods and
services are of great importance for the SUT compilation
in developing countries. The detailed specification of
import by products give information about the supply of
many products not produced in the developing country.
Eurostat has developed the EUROTRACE software
package used by many countries in Africa to manage
data for external trade statistics
8. The following example for balancing of
GARMENTS is misleading and has to be
corrected
• Garments can not be supplied direct to Government or
NPISHs final consumption expenditure, but as
intermediate consumption.
• Output for Government and for NPISHs is sum of:
intermediate consumption, consumption of fixed capital
and compensation of employees. Final consumption
expenditures of Government and NPISHs are equal to
output less sale (fees)
• The government accounts do not normally provide a
detailed breakdown of purchases of goods as garments.
• Intermediate consumption specified by products for the
government has to be estimated.
•
8. Example with manual balancing of garments
Supply/Use
Unbalanced
Balanced
Domestic production at basic prices
48,920
83,287
Imports at c.i.f values
145,770
145,770
Transport cost
5,841
5,841
Trade margins
74,345
74,345
Product taxes
21,990
21,990
Total supply
296,776
331,233
Intermediate consumption
0
0
Government final consumption
570
570
NPISHs final consumption
4,230
4,230
Household final consumption
291,175
279,528
Change in inventories
-75
-75
Exports at fob values
46,980
46,980
9. Comments to advertising services.
It states in the Handbook: The only product taxes
for advertising services are value added taxes.
These must have been paid by households because
enterprises do not pay VAT on intermediate
consumption and NPISH do not pay VAT either
Comment: The Government accounts will only give
information about total value added tax received
during a budget year, but not by type of products. In
many countries the budget year is different from the
calender year. The value of VAT, product taxes and
subsidies have to be corrected to an estimated
accrual value for the calender year
10. Comments to automatic balancing RAS
The Supply table is shown as a matrix of domestic
production with 3 products (commodities) and
three industries (kinds of activity).
Comment: RAS should be used at a final stage of
the balancing of SUT when the remaining
differences between supply and use of each
products are small.
The Supply table with figures for production and
imports of products are more reliable than the
Use table with distribution of products by users
RAS should only be used at the final stage of
balancing the SUT by correcting the Use Table.