United Nations Statistics Division

Scope and Role of Quarterly National Accounts

Training Workshop on the Compilation of Quarterly National Accounts for Economic Cooperation Organization Member Countries

8-11 March 2015Tehran, Islamic Republic of Iran

Outline

What are quarterly national accounts (QNA)?Key features of QNA Scope of QNA Role and uses of QNA Time series data Transparency, timeliness and reliability Setting up QNA Conclusions Questions

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What are QNA?

QNA constitute a system of integrated quarterly time series coordinated through an accounting framework• Accounting framework could be based on the 1993

or 2008 SNA QNA follow the same principles, concepts,

definitions and structure as the annual national accounts (ANA)

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Key features of QNA

Present the short-term movements of the economy, providing a coherent measure of such movements within the methodological framework of national accounts • In contrast with ANA, QNA focus on growth rates and

their temporal characteristics such as acceleration, deceleration or changes in sign

Have same standard classification as in ANA, albeit at a higher level of aggregation• ANA are available at much more disaggregated levels

to provide information on structural details about the economy

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Key features of QNA

Are available in non-seasonally and seasonally-adjusted forms due to variations in the intensity of economic activity within a year

Have to be reconciled to ANA estimates• Annual estimates and the sum of the corresponding

quarterly estimates should be equal which implies the possible need for benchmarking

Undergo more substantial and frequent revisions than for ANA due to characteristics of data sources and compilation methods

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Scope of QNA

In principle, QNA cover the entire sequence of accounts and balance sheets in the 2008 SNA, but in practice, lack of data, time and resources mean that QNA are usually less complete than annual national accounts (ANA)

Scope will usually evolve over time Countries can consider compiling the following

QNA to fulfil the minimum requirement for the minimum required dataset for the scope of the implementation of the 2008 SNA• Nominal and volume measure of GDP by industry or by

expenditure components• Accounts for the total economy (until net lending)• Rest of the world account (until net lending)

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Scope of QNA

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Scope of implementation of 2008 SNA for QNA

Main purpose: Provide a picture of current economic developments that is • More timely than that provided by ANA• More comprehensive than that provided by individual

short-term indicators through the use of an integrated framework

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Roles and uses of QNA

Support policy needs and monitoring by • Providing early warning on occurrence and timing of

economic upturns and downturns• Measuring short-term impact of internal and external

shocks on production, income and consumption• Supporting formulation of national budgets• Ensuring prompt and effective fiscal and monetary

policy response

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Roles and uses of QNA

Allow analysis of dynamic relationships between macroeconomic aggregates by providing time series of quarterly data in a coherent accounting framework

Provide basic data for business cycle analysis and economic modelling

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Roles and uses of QNA

Have a role to play for accounting under high inflation and where annual source data are based on varying fiscal years

Provide a coordinating conceptual framework for design and collection of economic source statistics

Provide a framework to identify major gaps in the range of short-term statistics

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Roles and uses of QNA

Time series data

A time series is defined as a series of data obtained through measurement of the same concept over time that allows different periods to be compared

For business cycle analysis, identifying turning points, trend-cycle analysis, studying dynamic relationships between macroeconomic variables and for forecasting, it is important to have QNA in a time series format that is• Sufficiently long (at least 5 years)• Comparable over time• Consistent over time with respect to concepts and

measurement Compile discrete rather than cumulative data

• Seasonally adjusted

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Transparency, timeliness and reliability

Users want QNA to be published as soon as possible after the end of each quarter

Users also want QNA to as accurate as possible so to minimize subsequent revisions

But, resource constraints, respondent burden and different user needs mean that there is a tension between timeliness of published data and reliability, accuracy and comprehensiveness• More timely QNA estimates may require greater

subsequent revisions

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Transparency, timeliness and reliability

Revisions, if not well-managed and communicated, may cause concerns among users

To face any concerns users may have about revisions, it is important to have a well-designed, carefully-managed and transparent revision policy • A later session will address this in detail

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Setting up QNA Setting up a system to compile QNA is typically not

an easy task and some key steps are needed to ensure the project runs smoothly

Consult potential stakeholders concerning• Possible uses• Required scope, detail, timing of release…

Take inventory of• Annual compilation methods• Available quarterly and annual source data

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Setting up QNA Design compilation methods and procedures

• Consider relationship to sources and methods used in ANA• Decide scope of QNA• Determine compilation level• Choose integrated or separate ANA-QNA compilation system• Make compilation schedule including timeliness of first

release and revision policy Review quality of source data and compilation

procedures• Study correlation between annual and quarterly source data• Study revisions to main aggregates

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Setting up QNA Generate time series of QNA for past years

• Benchmark to ANA Perform real-time tests and update current year QNA

• Link monthly and quarterly source data for current quarters with estimates for back series through, say, extrapolation

Release first estimates

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The scope of QNA tends to be less complete than that of ANA

Nevertheless, QNA form an integrated accounting framework to track short-term economic performance that is more timely than that provided by ANA

Issues of transparency, timeliness and reliability need to be balanced in the compilation of QNA

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Conclusions

Is your country currently compiling QNA?• If yes, what is the scope of QNA that is being

compiled in your country?• If not, do you have any plans to do so?

Do you have plans to expand the current scope? How?

Are the QNA published in a discrete or cumulative format?

Who are the main users of QNA? How are QNA used in policy formulation and

monitoring

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Questions

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Thank you