United Nations Statistics Division Scope and Role of Quarterly National Accounts Training Workshop on the Compilation of Quarterly National Accounts for Economic Cooperation Organization Member Countries 8-11 March 2015 Tehran, Islamic Republic of Iran

Outline  What are quarterly national accounts (QNA)?  Key features of QNA  Scope of QNA  Role and uses of QNA  Time series data  Transparency, timeliness and reliability  Setting up QNA  Conclusions  Questions 2

What are QNA?  QNA constitute a system of integrated quarterly time series coordinated through an accounting framework Accounting framework could be based on the 1993 or 2008 SNA  QNA follow the same principles, concepts, definitions and structure as the annual national accounts (ANA) 3

Key features of QNA  Present the short-term movements of the economy, providing a coherent measure of such movements within the methodological framework of national accounts In contrast with ANA, QNA focus on growth rates and their temporal characteristics such as acceleration, deceleration or changes in sign  Have same standard classification as in ANA, albeit at a higher level of aggregation ANA are available at much more disaggregated levels to provide information on structural details about the economy 4

Key features of QNA  Are available in non-seasonally and seasonally- adjusted forms due to variations in the intensity of economic activity within a year  Have to be reconciled to ANA estimates Annual estimates and the sum of the corresponding quarterly estimates should be equal which implies the possible need for benchmarking  Undergo more substantial and frequent revisions than for ANA due to characteristics of data sources and compilation methods 5

Scope of QNA  In principle, QNA cover the entire sequence of accounts and balance sheets in the 2008 SNA, but in practice, lack of data, time and resources mean that QNA are usually less complete than annual national accounts (ANA)  Scope will usually evolve over time  Countries can consider compiling the following QNA to fulfil the minimum requirement for the minimum required dataset for the scope of the implementation of the 2008 SNA Nominal and volume measure of GDP by industry or by expenditure components Accounts for the total economy (until net lending) Rest of the world account (until net lending) 6

Scope of QNA 7 Scope of implementation of 2008 SNA for QNA

 Main purpose: Provide a picture of current economic developments that is More timely than that provided by ANA More comprehensive than that provided by individual short-term indicators through the use of an integrated framework 8 Roles and uses of QNA

 Support policy needs and monitoring by Providing early warning on occurrence and timing of economic upturns and downturns Measuring short-term impact of internal and external shocks on production, income and consumption Supporting formulation of national budgets Ensuring prompt and effective fiscal and monetary policy response 9 Roles and uses of QNA

 Allow analysis of dynamic relationships between macroeconomic aggregates by providing time series of quarterly data in a coherent accounting framework  Provide basic data for business cycle analysis and economic modelling 10 Roles and uses of QNA

 Have a role to play for accounting under high inflation and where annual source data are based on varying fiscal years  Provide a coordinating conceptual framework for design and collection of economic source statistics  Provide a framework to identify major gaps in the range of short-term statistics 11 Roles and uses of QNA

Time series data  A time series is defined as a series of data obtained through measurement of the same concept over time that allows different periods to be compared  For business cycle analysis, identifying turning points, trend-cycle analysis, studying dynamic relationships between macroeconomic variables and for forecasting, it is important to have QNA in a time series format that is Sufficiently long (at least 5 years) Comparable over time Consistent over time with respect to concepts and measurement  Compile discrete rather than cumulative data Seasonally adjusted 12

Transparency, timeliness and reliability  Users want QNA to be published as soon as possible after the end of each quarter  Users also want QNA to as accurate as possible so to minimize subsequent revisions  But, resource constraints, respondent burden and different user needs mean that there is a tension between timeliness of published data and reliability, accuracy and comprehensiveness More timely QNA estimates may require greater subsequent revisions 13

Transparency, timeliness and reliability  Revisions, if not well-managed and communicated, may cause concerns among users  To face any concerns users may have about revisions, it is important to have a well-designed, carefully-managed and transparent revision policy A later session will address this in detail 14

Setting up QNA  Setting up a system to compile QNA is typically not an easy task and some key steps are needed to ensure the project runs smoothly  Consult potential stakeholders concerning Possible uses Required scope, detail, timing of release…  Take inventory of Annual compilation methods Available quarterly and annual source data 15

Setting up QNA  Design compilation methods and procedures Consider relationship to sources and methods used in ANA Decide scope of QNA Determine compilation level Choose integrated or separate ANA-QNA compilation system Make compilation schedule including timeliness of first release and revision policy  Review quality of source data and compilation procedures Study correlation between annual and quarterly source data Study revisions to main aggregates 16

Setting up QNA  Generate time series of QNA for past years Benchmark to ANA  Perform real-time tests and update current year QNA Link monthly and quarterly source data for current quarters with estimates for back series through, say, extrapolation  Release first estimates 17

 The scope of QNA tends to be less complete than that of ANA  Nevertheless, QNA form an integrated accounting framework to track short-term economic performance that is more timely than that provided by ANA  Issues of transparency, timeliness and reliability need to be balanced in the compilation of QNA 18 Conclusions

 Is your country currently compiling QNA? If yes, what is the scope of QNA that is being compiled in your country? If not, do you have any plans to do so?  Do you have plans to expand the current scope? How?  Are the QNA published in a discrete or cumulative format?  Who are the main users of QNA?  How are QNA used in policy formulation and monitoring 19 Questions

20 Thank you