# Input-Output Tables (IO Tables) for Selected DMCs

ADB assisted participating economies in implementing the recommendations of the System of National Accounts, 1993 by developing a set of supply and use tables (SUT) under RETA 6483. The main aim was to provide countries with a firmer basis to develop more reliable and consistent estimates of gross domestic product. The SUTs are also essential stepping stone in the process of producing input-output tables (IOTs), which are more useful for economic analysis such as developing macroeconomic models and impact analysis.

Building on the results of the SUTs, the ADB developed the input-output tables for selected economies that participated in RETA 6483 to enhance the analytical usefulness of the SUT data.

### Related documents

- Supply and Use Tables for Selected Economies in Asia and the Pacific: A Research Study
- 2009 Purchasing Power Parity Update for Selected Economies in Asia and the Pacific: A Research Study
- Subnational Purchasing Power Parities toward Integration of International Comparison Program and Consumer Price Index: The Case of the Philippines
- Integration of Consumer Price Indices and the International Comparison Program for the Asia and Pacific Region: How can They be Achieved?
- Research Study on Poverty-Specific Purchasing Power Parities for Selected Countries in Asia and the Pacific
- Final Report of the 2005 ICP for Asia and the Pacific: Purchasing Power Parities (PPP) and Real Expenditures released on 10 December 2007. Highlights | Main Report
- 2005 ICP for Asia and the Pacific: Research Study on Poverty-Specific PPP for Selected Countries in Asia and the Pacific on April 2008. Highlights | Main Report

The 1993 System of National Accounts (SNA93) and its successor, the 2008 System of National Accounts (SNA2008), both described the supply and use tables and the symmetric input-output tables (IOTs) as integral components of the international national accounting framework. The main use of SUTs and IOTs being an extension of the supply and use framework, are to assist national accountants to compile more reliable, consistent, and internationally comparable estimates of gross domestic product (GDP). The main difference between the two sets of tables is that SUTs show the relationship between products and industries while input-output tables are estimated either for industries or products separately and are symmetrical. Input-output tables provide better basis for measuring economic output and growth; informed policy making; and monitoring progress toward the United Nations Millennium Development Goals (MDGs), relating especially to poverty alleviation.

Cognizant of the importance of compiling SUTs, the Asian Development Bank initiated the compilation of SUTs for selected economies under its technical assistance project entitled "Adopting the Supply and Use Framework Towards 1993 System of National Accounts Compliance in Selected Developing Member Countries" (RETA 6483). The project was designed to assist participating economies in implementing the SNA93 through the compilation of SUTs. In December 2012, the ADB published the "Supply and Use Tables for Selected Economies in Asia and the Pacific: A Research Study" which include among others the methodological framework; the phased-approach strategies; and the SUTs for 18 selected economies in Asia and the Pacific.

In its continuing efforts and commitments to respond to demand-driven initiatives, ADB has taken an extra step and mathematically transformed SUTs into symmetric IOTs. The IOT compilation optimized the output from the SUT project with the end goal of improving an economy’s national accounting system and its usefulness for economic and structural analysis. IOTs were computed for the following seventeen economies: Bangladesh; Bhutan; Brunei Darussalam; Cambodia; the People’s Republic of China; Fiji; India; Indonesia; Malaysia; the Maldives; Mongolia; Nepal; Singapore; Sri Lanka; Taipei,China; Thailand; and Viet Nam.

Transforming the SUTs into symmetric IOTs and deriving the input-output analytical tables and matrices was purely a mathematical exercise and implemented using established formulae. Given time and resource constraints, no additional data collection was conducted and hence, the resulting IOTs are strictly based on information/data derived from the SUTs, without any adjustments.

### Outputs and descriptions

For each of the 17 economies, IOTs for domestic output and imports were prepared separately for product-by-product and industry-by-industry. Each completed IOT is the summation of domestic output and imports. The symmetric product-by-product and industry-by-industry IOTs for each economy include the following tables:

**Input-output table for domestic output at basic prices.**The IOT for domestic output is of particular importance for impact analysis of economic policies on the domestic economy. The first quadrant (intermediate uses) and the second quadrant (final uses) cover only domestic products. The total level of imported products is just added to the table from the last row of the IOT for imports. In this case, the use of imported products reflects the input requirements of the production processes of imported products.**Matrix showing the use of imports.**The imports matrix shows, in the rows, the intermediate use of each product group by industry and final demand (final consumption or capital formation) for each product group. The columns show the industries to which each product group would have been classified as a principal activity if it had been produced in that country. If an economy is relatively narrowly-based then some products that are imported will have no domestically-produced equivalent. These are termed “non-competing imports” and they are not allocated to any industry.**Input technical coefficients and Output technical coefficients matrices.**An input coefficients matrix and an output coefficients matrix are produced to assist in these analyses. Either of these can relate to product-by-product or industry-by-industry IOTs. They provide a measure of what is referred to as the “direct requirements” of one industry (or product) for inputs from other industries (or products). In practice, however, an increase in demand for the output of an industry will lead to secondary effects as the increased demand for output from that industry flows to other industries which then require subsequent rounds (each with reducing impacts) to meet the increased output from the initial increase in demand. These subsequent rounds are referred to as “indirect effects” and the consequential changes in the IOTs are called "indirect requirements". The sum of all these effects is measured in the IOTs and is termed as the "total requirements".**Inverse matrix.**The inverse matrix is calculated as the inverse of the difference between the matrix of input technical coefficients and the identity matrix (I). It provides the link between production and the final demand. The matrix shows the direct and indirect requirements needed to generate a unit of industry’s output. The product of the inverse matrix and the vector of final demand will result in total output by product.

### Data: Country Input-Output Tables and Analytical IO Matrices

The excel versions of the same set of tables can be accessed in ADB’s Statistical Database System (SDBS). The SDBS also provides access to the Excel versions of the SUTs contained in our publication entitled, "Supply and Use tables for Selected Economies in Asia and the Pacific: A Research Study" published in December 2012.

The complete report on the IOTs will be published in the first half of 2014 and will include the IOTs for selected economies, the conceptual framework and methods, some numerical examples of SUT to IOT transformation, IOT applications and uses, and some recommendations on updating the IOTs for future work.

## Transforming Supply and Use Tables to Symmetric Input-Output tables

### Basic assumptions

Two basic assumptions were used in transforming the SUTs into symmetric IOTs. The first is the "technology assumptions" and the second is the "assumption of fixed sales structure".

**Technology assumptions** generate product-by-product IOTs that are produced either under Model A (product technology assumption) or Model B (industry technology assumption). Model A assumes that each product is produced in its own specific way, irrespective of the industry where it is produced. Model B assumes that each industry has its own specific way of production, irrespective of its product mix.

**Assumptions of fixed sales structure yield industry-by-industry IOTs under Models C and D.** Model C assumes that each industry has its own specific sales structure, irrespective of its product mix while Model D assumes that each product has its own specific sales structure, irrespective of the industry where it is produced.

The mathematical transformation of SUTs to IOTs is based on the models described in the Eurostat (European Union’s statistical office) Manual of Supply, Use and Input-Output Tables, 2008 edition. In particular, the ADB used Model B to produce the product-by-product IOTs and Model D to produce the industry-by-industry IOTs. The primary reason for choosing these two models is that it is not necessary to deal with negative values. In Model B, the values in the columns of the use matrix are multiplied by a transformation matrix containing the contribution of each industry to the output of a product. In Model D, the values in the columns of the use matrix are multiplied by a transformation matrix that reflects the fixed product sales structure of each industry. The steps involved in the mathematical transformation from SUTs to IOTs are as follow:

Step 1.Review and finalization of the supply and use matrix

Step 2.Transforming rectangular SUT to a square SUT;

Step 3.Converting the square SUT at purchaser’s prices to SUT at basic prices;

Step 4.Transforming the square SUT at basic prices to symmetric IOTs and deriving analytical matrices.

Steps 1 to 3 are fundamentals and are thus, the same for any chosen input-output transformation model. Step 4 involves the actual mathematical transformation formula which differs for each Model.

The diagram below provides the schematic presentation of SUT to IOT Transformation.

**Figure1. Schematic Presentation of the Supply and Use Table to Input-Output Table**

For more information on the Input-Output Tables and the Supply and Use Tables for Asia and the Pacific, please contact:

- Chellam Palanyandy (Ms.),

Lead Statistician and Project Officer

[email protected]

Tel: +632-6326374 - Eileen P. Capilit (Ms.)

Economics and Statistics Officer and Project Specialist

[email protected]

Tel: +632-6326686

ADB Consultants:

- Rhea-Ann Bautista (Ms.)

[email protected] - Julieta Magallanes (Ms.)

[email protected] - Dennis Sorino(Mr.)

[email protected]