Chile’s National Accounts Development and Current Situation

1. Chile’s National AccountsDevelopment and Current Situation Carmen Gloria Escobar National Accounts Department Central Bank of Chile OCDE Working Party on National Accounts Tour Europe, Paris La Défense 3-5 October, 2007 CENTRAL BANK OF CHILE OCTOBER 2007

2. Subjects • Institutional framework and organization • Conceptual framework and main products • Publication and revision policy • International assessment • Future agenda

3. Institutional framework & organization CENTRAL BANK OF CHILE OCTOBER 2007

4. Institutional framework • In Chile, the institutional framework for producing economic statistics is a shared responsibility between the Central Bank of Chile and the National Statistics Bureau (INE). • In the particular case of National Accounts, statistics are compiled and disseminated by the Central Bank, in the Statistical Information and Research office (GIIE). • Within the GIIE, the compiling unit is the National Accounts Department (DCN).

5. Compilation process Consistency process Organization • The DCN is a team of 35 professionals, mostly economists. • The DCN is organized into 7 working groups.

6. Conceptual framework & main products CENTRAL BANK OF CHILE OCTOBER 2007

7. Conceptual framework • The DCN follows the recommendations of the 1993 National Accounts System (1993 SNA) as the general framework for compiling the national accounts. • Implementing such framework has been a gradual process since the last exercises that changed the base year. • Chile’s national accounts are compiled on a fixed base (2003 base). • Regarding classifiers, the ISIC Rev.3 and the CPC are used. Implementation of COFOG and COICOP is under way.

8. Products • Complying with international standards, the DCN makes follow-up compilations in various frequencies: • Benchmark compilations • Annual • Quarterly • Monthly Index of Economic Activity (IMACEC) • In addition, regional accounts are prepared, for each of the regions the country is politically divided into.

9. Benchmark compilation • The 2003 benchmark compilation is the fifth one to have been developed in Chile. Previous base years were 1962, 1977, 1986 and 1996. • The compilation period has been reduced from ten (1986-1996) to seven years (1996-2003). Next measurement is scheduled for 2008. • In benchmark compilations, special data collection is carried out to cover economic areas that do not have permanent information.

10. Benchmark compilation • Aggregate information on products and activities was structured into the Supply and Use Tables. • The system contains 73 economic activities and products. • In turn, information on institutional units is organized into the integrated economic accounts.

11. Annual national accounts • The full National Accounts scheme is developed, with the exception of balance sheets. • The sources of information are administrative records, economic surveys, financial statements, yearbooks and diverse statistical reports and figures. • Compilation methods depend on the sector’s characteristics and available sources of information. • Publication is done for 26 activities and products.

12. Annual national accounts • Regarding integrated economic accounts, they are published for the following sectors: financial and non-financial institutions, general government, households and private non-profit institutions serving households and the rest of the world. • These are broken down by institutional unit or group, itemized by production, income and expenditure, capital, and financial transactions statements in an integrated manner.

13. Quarterly national accounts • These are based on production indicators that extrapolate the various components of the 2003 benchmark compilation, which are adjusted to annual accounts through the method of temporal disaggregation proposed by Denton. • Supply-Use Tables are balanced at a level of 33 products and activities, and the publication is made at a level of 22 economic activities. • Sources of information • Origin: Basic sources of information are production indicators by sector, as well as foreign trade data. • Expenditure: Basic sources of information are indicators for consumption and sales, imported machinery, engineering works survey, inventory survey and Customs data for foreign trade.

14. IMACEC • The Imacec is a synthetic indicator of monthly production by all economic sectors combined, at constant prices. • It is a proxy for GDP variations. • The Imacec is compiled from 73 productive sectors. However, only the aggregate is published. • The Imacec is estimated through an accounting approach, using a Laspeyres volume index obtained by taking integrals of monthly production indexes from relevant industries, according to the structure of base year 2003. • Both the original series and the seasonally-adjusted series are published.

15. Regional accounts • Regional accounts are prepared only for the production side. Gross Regional Production Value (VBPR) and Regional Intermediate Consumption (CIR) are estimated, which yield the Regional Value Added (VAR) by difference and only for the benchmark year. • Accounting and fiscal information is used together with direct surveys to producers and general statistical sources. • For follow-up, the base year’s VAR is extrapolated by regional quantum indexes, keeping the base year’s CIR/VBPR ratio.

16. Publication and revision policy CENTRAL BANK OF CHILE OCTOBER 2007

17. Every 5 years Publication: 2 years and 10 months lag Publication and revision policy • A revision policy exists that is public and with pre-determined dates, which are consistent with quarterly and annual publications.

18. -Publication: March of each year. -Series available from 1960 onwards -Three versions: preliminar, provisional and revised Preliminary version 2007 Provisional version 2006 Revised version 2005 Publication and revision policy • A revision policy exists that is public and with pre-determined dates, which are consistent with quarterly and annual publications.

19. Series available: From 1986 onwards (at constant prices). From 1990 onwards (at current prices) Publication: 53 days after closure of benchmark quarter Publication and revision policy • A revision policy exists that is public and with pre-determined dates, which are consistent with quarterly and annual publications.

20. 35 days after closure of benchmark month Series available from 1986 onwards Publication and revision policy • A revision policy exists that is public and with pre-determined dates, which are consistent with quarterly and annual publications.

21. International assessment CENTRAL BANK OF CHILE OCTOBER 2007

22. International assessment: 2003 Benchmark compilation • 4 - 17 January 2006: An IMF mission aimed at analyzing and evaluating works associated with the 2003 benchmark compilation and the implementation strategy used. • The mission used the guidelines of the Data Quality Assessment Framework (DQAF), which is based on the methodology used to assess the Reports on the Observance of Standards and Codes (ROSC). • Positive general assessment, with minor observations to specific treatments: dwelling, repairs, natural growth in agricultural crops, fixed capital consumption.

23. International assessment: National Accounts • 18 April to 2 May 2007: IMF mission aimed at preparing a Report on the Observance of Standards and Codes in the area of macroeconomic statistics (ROSC-Data Module). Said report considers the IMF’s assessment framework DQAF. • Favorable IMF assessment.

24. International assessment:National Accounts

25. International assessment:National Accounts • “The degree of advancement of Chilean national accounts is higher than that of emerging economies, and lower than that of advanced economies.” • Main recommendations: • Establish user consultation mechanisms • Complete 1993 SNA implementation • Improve source data quality • Improve retropolation techniques

26. Future agenda CENTRAL BANK OF CHILE OCTOBER 2007

27. Future agenda • Actions in progress, 2007: • Preparation of new 2008 benchmark compilation • Implementation of Quarterly financial accounts • Assessment of statistical methods for the retropolation of series • Revision and extension of inventory survey • Creation of user contact points to answer questions

28. Future agenda • Actions contemplated in the 2008 benchmark compilation: • Deepening the application of 1993 SNA • Assessment of the reclassification of some mining products • Greater itemization in processing and publication of products and activities • Evaluation of the adoption of national accounts measurement at constant prices using chain indices • Enhance joint works with the INE

29. Chile’s National AccountsDevelopment and Current Situation Carmen Gloria Escobar National Accounts Department Central Bank of Chile OCDE Working Party on National Accounts Tour Europe, Paris La Défense 3-5 October, 2007 CENTRAL BANK OF CHILE OCTOBER 2007