African Centre for Statistics United Nations Economic Commission for Africa Expert Group Meeting to review the “Handbook on SUT: Compilation, Application and Good Practices” Economic Statistics and National Accounts Section African Centre for Statistics (ACS) United Nations Economic Commission for Africa (UNECA) Addis Ababa, Ethiopia October 2011 Chapter 5: Supply Table

African Centre for Statistics Outline of the presentation Gross output Price formation Transport costs and trade margins (TTM) adjustments C.I.F./F.O.B. Adjustment Resident and non-resident purchases Taxes and subsidies on products Household final consumption expenditures (HFCE) Comments Questions for discussions

African Centre for Statistics Gross output (1/2) Supply = Domestic Production + Imports Elements included in gross output: –production of goods and services –agricultural output –own occupied dwellings –households domestic services Government and NPISH gross output –Valued as the cost of production –Is equal = Compensation of employees + Intermediate consumption + Consumption of fixed capital + Taxes - Subsidies

African Centre for Statistics Gross output (2/2) Output of retailers and wholesalers = difference between value of goods sold and the cost of purchasing of the same goods Bank output = value of services sold + FISIM –FISIM is the difference between interest paid to depositors and the property income earned by banks Insurance output = difference between premiums and claims + premium supplements –Premium supplements = interest earned on the contingency funds held by insurance company and used to pay claims

African Centre for Statistics Price formation (1/2) Basic price + Transport costs + Wholesale and retail trade margins + Taxes on products (sales taxes, custom duties, value added taxes) – Subsidies on products = Purchasers’ price

African Centre for Statistics Price formation (2/2)

African Centre for Statistics TTM Adjustment (1/2) Transport and trade margins should be included in the outputs in order to have purchasers’ prices for each product. Therefore, we need to transfer the transport costs and the trade margins appropriately by product.

African Centre for Statistics TTM Adjustments (2/2)

African Centre for Statistics CIF/FOB Adjustment (1/2) Transport and insurance services will also be included either: –in domestic production if the transport and insurance services are provided by residents; or –in imports (of services) if the transport and insurance services are provided by non-residents.

African Centre for Statistics CIF/FOB Adjustment (2/2)

African Centre for Statistics Residents and non-residents purchases adjustments Household final consumption expenditure (HFCE) refers to the resident population. Thus: –HFCE must include purchases abroad by residents and exclude purchases in the domestic market by non- residents –Exports must include purchases in the domestic market by non-residents (uses table) –Imports must include purchases abroad by residents (supply table)

African Centre for Statistics HFCE HFCE estimation is consistent with SNA Requirement: questions on expenditures abroad in the questionnaire HH Expenditure Surveys HFCE estimation is not consistent with SNA Requirement: adjustment at detailed level or at a global level Retail sales or production statistics

African Centre for Statistics Taxes and subsidies Taxes on products include: –Customs duties –Excise duties –Sales taxes –Value added taxes Subsidies are transfers from the government and are proportional to the values or quantities: treated as negative taxes in the SNA

African Centre for Statistics Comments This chapter presents many concepts of the supply table Examples are given on special treatment Way of improvement: insertion of difficulties and challenges faced by Asian countries in the document (General comments for all the chapters)

African Centre for Statistics Questions for discussions How can we improve this chapter to make it more practical? What are the other alternatives which can be used to estimate: –Purchases abroad by residents? –Purchases on the domestic market by non-residents?

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