Database and Development Indicators

Rebasing and Linking National Accounts Series

National Accounts Statistics provide information about the economic performance of a country. Compiled and presented in different approaches, formats and details, national accounts give aggregate and sectoral insights into the economy and allow derivation of macro-economic indicators useful to researchers, planners and decision- makers. To be able to do substantive modeling and analysis, users of the national accounts require longer and comparable time series data.

The general statistical framework known as the System of National Accounts (SNA) consists of a coherent, consistent and integrated set of macroeconomic accounts, balance sheets and tables based on a set of internationally agreed concepts, definitions and accounting rules. The constant price estimates in terms of the values of a particular reference or base year of the national accounts are important indicators of growth or movements of real output over a time period.

Sixteen developing member countries (DMCs) of the Bank had breaks in their publicly released national accounts series because of changes in base year. The reasons for not linking their series include the lack of technical expertise and suitable methodology, non-adoption of the proposed link series by the government, and the heavy data processing and computation involved. The breaks in the series result in incomparability of the series across different base years thereby rendering it difficult to do meaningful analysis.

In view of the need to produce a linked series based on a single base year, the ADB launched the regional assistance (RETA) project for Rebasing and Linking of National Accounts Series (5874-REG).

• Objectives
• Scope
• Workshop proceedings and technical papers

Objectives

The objective of the regional assistance project RETA 5874 is to strengthen the capability of participating countries that have breaks (more than one base year) in their constant price National Accounts Series to generate a continuous and comparable constant price linked series by an appropriate and commonly agreed methodology. It provides assistance to enable participating countries to actually construct the linked series. The RETA also provides a forum for the developing member countries (DMCs) to discuss ways and means to rebase their national accounts estimates more frequently.

The benefit to ADB and users worldwide includes the availability of a continuous linked national account series for the participating DMCs which are essential to analyze trends and patterns of economic development.

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Scope

DMCs that regularly update their national accounts series fall into three groups. The first, comprising Bangladesh, Cambodia, India, Indonesia, Rep. of Korea, Malaysia, Nepal, Sri Lanka, Thailand and Viet Nam, have rebased their series once or twice since the 1980s but have not linked the different series, or if they had, these were not being officially released. The second group consists of DMCs that have linked their constant price GDP series, e.g., Hong Kong,China, Philippines, Singapore, and Taipei,China. The third is composed of DMCs with a long overdue need to rebase their series, e.g., Bhutan (base year =1980) and Pakistan (1981). A very old base year diminishes the relevance and accuracy of the estimates because weights used in the price index for the old base year will not reflect emerging weights due to the change in importance of commodities. Heavy economies have undergone structural changes, such as declining share of agriculture and increasing shares of the manufacturing and service sectors.

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Workshop Proceedings and Technical Papers

An inception workshop was organized to get the commitment of countries to participate and perform actual linking and rebasing of their national accounts series. A concluding workshop was held where participants presented their outputs, namely the linked series together with related problems and issues.

Inception workshop

The inception workshop was jointly organized by ADB and the Economic and Social Commission for Asia and the Pacific (ESCAP) on 21-24 March 2000 in Bangkok, Thailand. It was attended by 46 participants from 17 countries, namely: Bangladesh; Bhutan; Cambodia; China (PRC); Hong Kong, China; India; Indonesia; Macao, China; Malaysia; Nepal; Pakistan; Philippines; Republic of Korea; Singapore; Sri Lanka; Thailand; and Viet Nam. There were also representatives and resource persons from the Organization for Economic Cooperation and Development (OECD), ESCAP, Australian Bureau of Statistics (ABS) and ADB.

The objectives of the inception workshop, organized jointly by the ADB and ESCAP, include the following: (a) apprise the participants of the current status of national accounts series in selected ADB/ESCAP countries; (b) familiarize participants with basic principles in compiling national accounts at constant prices and various methodologies used in linking constant prices series; (c) discuss problems of compilers on producing a continuous and comparable national accounts series; and in the more frequent rebasing of series; (d) explore the possibilities of proposing common method for linking national accounts estimates based on good practices of participating countries; (e) for countries with breaks in their national accounts, formulate a work program of linking the series; and (f) discuss the advantages and approaches towards more frequent rebasing of the national accounts.

The workshop proper started with presentation of Country Papers on the current status of national accounts statistics (compilation of current price estimates and in particular their practices for compiling constant price estimates of value added and other national accounts aggregates).

Other technical papers were presented by resource persons (available in PDF format):

• Introduction of Chain Volume and Price Measures: The Australian Approach, Charles Aspden, Australian Bureau of Statistics
• Maintaining Consistent Time Series of National Accounts, Derek Blades, OECD
• Measuring Real Value Added in Service Activities: Experience in OECD Countries, Derek Blades, OECD
• Consumer Price Indices, International Trade Indices and Producer Price Indices, Joel Jere, Statistics Division, ESCAP
• Basic Principles and Practices in Rebasing and Linking National Accounts Series, A.C. Kulshreshtha, Asian Development Bank
• A review on the use of price index in national accounts, Vu Quang Viet, United Nations Statistics Division

The Summary of Proceedings presents detailed information on the conduct of the inception workshop, recommendations, follow-up activities, as well as a summary of country practices and the list of participants.

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Concluding workshop

The concluding workshop was held February 13-16, 2001 in Bangkok, Thailand. Jointly organized by ADB and ESCAP, the workshop was attended by 34 participants from 15 countries, namely: Bangladesh; Bhutan; China (PRC); Hong Kong,China; India; Indonesia; Macao,China; Nepal; Pakistan; Philippines; Republic of Korea; Singapore; Sri Lanka; Thailand; and Viet Nam. There were also representatives and resource persons from the OECD, ESCAP and ADB.

1. present the linked series compiled under the regional assistance project;
2. discuss comparative growth analysis based on the linked and original series as well as discuss related problems and issues;
3. apprise participants on plans and status of 1993 SNA implementation in the region;
4. familiarize participants with various approaches to volume estimation with emphasis on chain volume measures and its use in developed countries;
5. discuss the feasibility of implementing chain index measures in developing countries;
6. discuss strengthening and harmonization of rebased and linked NAS in Asia;
7. provide recommendations and share the countries' future plans on rebasing, linking and 1993 SNA implementation.

In addition to country papers presented by participants, the following technical papers were presented by resource persons:

• Price Collection and Estimates at Constant Price, Organization for Economic Cooperation and Development (OECD)
• Strengthening and Harmonization of Rebased and Linked National Accounts Series, Biswanath Bhattacharyay, Asian Development Bank
• Review of Country Practices on Rebasing and Linking National Accounts Series, Asian Development Bank.