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PRESENTATION ON GROSS DOMESTIC PRODUCT (GDP). Department of Economic Planning and Development (JPKE) Prime Minister’s Office 13 Ogos 2007. GROSS DOMESTIC PRODUCT. INTRODUCTION CONCEPTS AND DEFINITION GDP MEASUREMENT COMPILATION PRACTICE IN BRUNEI DARUSSALAM
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PRESENTATION ON GROSS DOMESTIC PRODUCT (GDP) Department of Economic Planning and Development (JPKE) Prime Minister’s Office 13 Ogos 2007
GROSS DOMESTIC PRODUCT • INTRODUCTION • CONCEPTS AND DEFINITION • GDP MEASUREMENT • COMPILATION PRACTICE IN BRUNEI DARUSSALAM • USERS AND USES
INTRODUCTION COMPILATION OF GDP FOR BRUNEI DARUSSALAM Compiling Agency : National Accounts Section (NAS) Department of Statistics (DOS) Department of Economic Planning and Development (JPKE) Prime Minister’s Office
INTERNATIONAL STANDARDS • A SYSTEM OF NATIONAL ACCOUNTS (SNA) • a comprehensive guide for the compilation of GDP • latest : 1993 SNA • regional and international comparability • - concepts and definitions • - methodology • - classifications
GROSS DOMESTIC PRODUCT • Definition : • a measurement in monetary terms of all the achievements of an economy • within a given period of time, generally a year • in the forms of production of all kinds of goods and services
GDP MEASUREMENT PRODUCTION OR OUTPUT APPROACH - the sum of the value added of the various industries in the economy EXPENDITURE APPROACH - the sum of consumption expenditure, investment and net exports • INCOME APPROACH • the sum of the factor incomes, namely compensation of employees and gross operating surplus
GDP MEASUREMENT APPROACHES Production GDP = GVA GDP – Gross Domestic Product GVA – Gross value Added CE – Compensation of Employees CFC – Consumption of Fixed Capital OS – Operating Surplus C – Consumption I - Investment X – Exports M - Imports Expenditure GDP = C + I + (X – M) Income GDP = CE + CFC +OS
CURRENT AND CONSTANT PRICES(Nominal and Real Prices) • CURRENT PRICES • measured at prevailing prices during the year • the changes over the years would also include the effect of the changes in prices • not a proper measure of real change in production • CONSTANT PRICES • the effect of prices eliminated • measured at given prices of particular ‘base year’ • use price indices as deflator or volume indicators as extrapolator
GDP COMPILATION PRACTICE IN BRUNEI DARUSSALAM GDP compilation – first started in 1978 Current GDP compilation : • Consistent with 1993 SNA • Base year : 2000 • By 2 approaches : Production & Expenditure • Annual and Quarterly • At current and constant prices
COMPILATION PROCESS PRODUCTION APPROACH The sum of gross value added (GVA), which is derived by deducting the value of goods and services used in the production (IC) from the value of goods and services produced (GO) GDP GDP = GVA, where GVA = GO - IC
PRODUCTION APPROACH INDUSTRY Group of enterprises/establishments engaged in the same, or similar economic activity CLASSIFICATION International Standard Industrial Classification of All Economic Activities (ISIC, Rev. 3)
Mining Manufacturing Construction Electricity and Water Transport & Communication Trade (Wholesale & Retail Trade, Restaurants & Hotels) Finance Real Estate & Ownership of Dwellings Private & Business Services Government Services CLASSIFICATION OF ECONOMIC ACTIVITIES AGRICULTURE, FORESTRY AND FISHING INDUSTRIAL SECTOR SERVICES SECTOR
PRIVATE SECTOR BUSINESSES • Economic Census (EC) • Quarterly Survey of Businesses (QSB) • Data on production from relevant government departments and other agencies SOURCES OF DATA GOVERNMENT SECTOR • Government accounts data HOUSEHOLD SECTOR • Population Census data • Household Expenditure Survey data
ECONOMIC CENSUS • Conducted every 5 years • Covers all registered businesses operating in Brunei Darussalam • The last Economic Census in 2002 : - 2000 & 2001 data - Publication : (i) Preliminary Report (ii) 2002 Economic Census Report • The next census in 2007 : 2005 & 2006 data
ECONOMIC CENSUS QUESTIONNAIRE 1. Principal business activity & other business activity 2. Location and branches 3. Number of employees and salary 4. Sales/receipts/income 5. Expenditure – Operating & Non-operating 6. Inventory/stock 7. Capital expenditure - Fixed assets Data analysed & processed to compute GVA for each business and summed up to get GVA for private sector
QUARTERLY SURVEY OF BUSINESSES QUESTIONNAIRE • Conducted on a sample basis • All medium & large businesses and a selection of small businesses • Conducted every quarter - Uses brief questionnaire : 1. Principal business activity 2. Number of employees and salary 3. Sales/receipts/income
Rely on ratios and estimation techniques for GVA computation “Straightforward” GVA computation CENSUS vs. SURVEY DATA CENSUS SURVEY Complete coverage Sample basis Comprehensive data Limited data Time consuming in processing the data Quick to process
GDP BY EXPENDITURE To validate the estimates by production GDP BY EXPENDITURE = Private Consumption Expenditure (PCE) + Government Consumption Expenditure (GCE) + Gross Domestic Capital Formation (GDCF) (Construction, Machinery & Equipment & Change in stock) + Exports of goods and services (X) - Imports of goods and services (M)
DATA SOURCES Exp. item Source of data Household Expenditure Survey PCE Government budget and actual expenditure GCE GDCF Construction Government expenditure for gov’t construction Economic census / Building permits for private construction Machinery & equipment External trade statistics stock Economic census X-M (Goods) External trade statistics X-M (Services) Balance of payments
USERS AND USES Economic planners and policy makers - monitoring the economy; economic planning & development - forecasting and simulation Regional & international organisations - economic structure & performance comparison Business - financial markets, market research, contracts Academicians - research and analysis General public
GDP BY PRODUCTION 72 % 27 % 68 % 31 % 64 % 35 % 61 % 38 % 60 % 39 %
GDP BY EXPENDITURE BND million 2001 2002 2003 2004 2005
THANK YOU Q & A