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COMMENTS ON CHAPTER 4 OF THE HANDBOOK

COMMENTS ON CHAPTER 4 OF THE HANDBOOK. BY LIZZIE CHIKOTI NATIONAL STATISTICAL OFFICE MALAWI. Introduction to SUT. The chapter is short and well elaborated

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COMMENTS ON CHAPTER 4 OF THE HANDBOOK

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  1. COMMENTS ON CHAPTER 4 OF THE HANDBOOK BY LIZZIE CHIKOTI NATIONAL STATISTICAL OFFICE MALAWI Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24 – 28 October 2011.

  2. Introduction to SUT • The chapter is short and well elaborated • The SUT mainly focuses on the product balances; where products come from and where they are used. These products are both goods and services • For some countries, Supply and Use Tables are fully integrated in the National Accounts system and used for both statistical and analytical purposes Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24 – 28 October, 2011

  3. Advantages of using SUT • Knowledge and judgement have to be used to reach a balance based on the most reliable data • The SUT provides a comprehensive framework for reconciliation of data. • Malawi uses SUT as an integral part of the compilation of final annual National Accounts at current prices as well as previous year’s prices ( double deflation technique) Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24 – 28 October 2011.

  4. Advantages of using SUT • SUT can also be converted into output-input tables (IOT), industry by industry or product by product tables. • The SUT and IOT represent statistical databases that that are used for econometric models and economic planning. • Malawi compiles a 60 by 60 IOT which is used by the Department of Development Planning for its model on forecasting GDP Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24 – 28 October 2011

  5. Treatment of NPISHs • Par 83 – The NPISHs services can also be included on the production side the way we do with government • Expenditure by NPISHs - Malawi compiles this separately with data from NPISH Surveys that are conducted annually • The NPISHs consumption is compiled according to COPNI whereas the private consumption and the public consumption are compiled according to COICOP and COFOG respectively. Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24 – 28 October 2011.

  6. Three approaches to compiling GDP • SUT methodology incorporates components of the three approaches for measuring Gross Domestic Product (GDP); the production approach, the expenditure approach and the income approach. This enables a single estimate to be computed both in current and volume terms. Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24-28 October 2011.

  7. Three approaches to compiling GDP • Most countries find it easier to estimate GDP from the production side since data on production is readily available compared to expenditure or income data. • Derivation of household final consumption as a residual in the estimation of GDP from the expenditure side is common practice in most countries Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24-28 October 2011.

  8. Supply = Use • Annual SUTs are easily compiled when data is readily available • Par 82 – The changes in inventory is just one of the items that can be used to balance the two sides. The other one is the Household final consumption expenditure • Most important – you adjust the less reliable component Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24-28 October 2011.

  9. Practicability • The chapter is practical enough since it is just elaborating on the structure of the SUT • As regards to applicability to African countries, you find that most African countries have now adopted the Supply and Use methodology as a way of compiling their National Accounts and as indicated in the comments above, production data is readily available and therefore compilation can easily be done Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24-28 October 2011.

  10. Practicability • Data unavailability is one of the major problems that most African countries face and the SUT provides a framework in which the available data can be reconciled. • How do we deal with the problem of data unavailablity? • All in all, the SUT methodology is efficient and reliable. Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24-28 October 2011.

  11. THANK YOU FOR YOUR ATTENTION!!!!!!! • ZIKOMO KWAMBIRI!!!!!!!!! Expert Group Meeting on Supply and Use Tables in support of the ICP, Addis Ababa, Ethiopia, 24 – 28 October 2011.

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