M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Working Group for Chapter 18 – Statistics Bilateral screening: Chapter 18 PRESENTATION OF MONTENEGRO Luxembourg, June 2013

ECONOMY AND FINANCE European System of Account-ESA(95) Gross National Income(GNI) Bilateral screening: Chapter 18 Presentation of Montenegro Luxembourg, June2013 STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ECONOMY AND FINANCE European System of Account-ESA (95) Bilateral screening: Chapter 18 Presentation of Montenegro Luxembourg, June2013 STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data: Current situation  MONSTAT compile GDP on annual and quarterly basis.  Annual GDP is compiled by using two of the three possible methods of calculation, the production and the expenditure approach. The income approach is not yet implemented.  The basic framework for compilation is ESA 95 methodology – (Reg. 2223/96). STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Production approach: Current situation:  Data are available from 2000 year at current prices and from 2001 at constant (previous year prices);  Timeliness t+9 month;  Output, IC and GVA at current prices are compiled level at 2-digit NACE level and disseminate at NACE sector level;  GDP by NACE Rev.2 is available for 2010 (only current price data) and 2011 at current and constant prices (Reg. 715/2010);  Eurostat's Handbook on the price and volume measurement is used for compilation of constant prices and the recommendations from Decision 98/715 is adopted in accordance with the available price and volume indices from basic statistics. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Production approach:  GDP at constant prices has been produced using single extrapolation method at 2-digit NACE level (except agricultural activity where is applied double deflation method);  Sectors accounts: Output, IC and GVA are allocated on instituctional sectors for 2010 and Taxes and subsidies on products are not allocated, they are available at the level of the total economy;  FISIM is allocated by users sectors (Reg. 1889/2002). Main data source are monetary statistics data from Central Bank (data on interest rates, stocks of loans and deposits);  Owner occupied dwelling services is compiled following user-cost approach (Reg. 1722/2005). In accordance with the regulation less than 10% of households are tenants, and there is a difference between private and other paid rent; STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Production approach:  The non-observed economy is partially measured – legal part (Decision 94/168). Data are presented by OECD Tabular approach. The part of economy relating to the tourism services and construction activity by households are estimated. Exhaustiveness estimates is done also for entrepreneurs units which have annual income above defined threshold;  Data is transmitted to Eurostat via eDAMIS in the ESA 95 transmission programme in accordance with the Reg. 1392/2007;  The data were first submitted in September  Tables 0101, 0301, 0800, and 1200 including a complete series of data available are regularly submitted to Eurostat; STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Production approach:  With adoption of ESA 2010 MONSTAT is going to work on the associated transmission programmes.  In the future we will try to use the opportunity for alignement of international standards for data dissemination and exchange by introducing SDMX reference infrastructure that would enable the automatization of data processing from the local database and convert them into a form suitable for sending via eDAMIS.  From this point of view introducing the SDMX in National accounts requires trained IT staff and hardware support.  It is also consider the possibility of implementation and hub approach using web service that would allow automatic withdrawal data by Eurostat.  IT and National accounts representatives participated on workshop on ESA 2010-SDMX on 10 June STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Production approach:  Description on sources and methods used for compilation non-financial national accounts – available and regularly updated within IPA regional projects. Last updated with 2010 data as a referent year;  Description is prepared following the structure of GNI Inventory. In total 76 pages: Part A Annual National Accounts at current prices (58 pages) Part BPrice and Volume Measures (8 pages) Part CQuarterly National Accounts (1 page) STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Production approach: Future compliances - Plan for alignment with acquis:  Work on replacement of C method to at least B method in compiling GDP at previous year prices following the recommendations from Handbook on price and volume measures in national accounts (Decision 990/2002);  Developing of first (experimental) SUT are planed within IPA 2010 national programme which has started in May 2013 (2 years duration);  Ongoing IPA 2011 regional project covers work on improvements on exhaustiveness estimates and implementation of selected items by ESA 2010 (capitalization of R&D and military equipment). Preparation of Road Map for ESA The results of IPA 2011 regional project will be available by July 2014;  Introduction of GDP income approach – by the end of 2015;  Compilation of GNI – by the end of 2015;  Estimation of import and export FISIM for the GNI purpose – by end of 2015; STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data - Expenditure approach: Current situation:  GDP at current prices is available from 2000, at constant price from 2008;  Classification: HFCE by COICOP, GGFCE by COFOG-Reg.113/2002; GFCF by technical structure; Ex/Im of goods by SITC and Ex/Im of services in line with BPM5;  ΔInv is residual balancing item between production and expenditure approaches – no independent estimates of ΔInv;  Deflation method is applied for constant price compilation, except GGFCE where extrapolation is applied; STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Expenditure approach: Current situation:  From September 2011 onwards, national accounts data are regularly transmitted to Eurostat through ESA 95 Data Transmission programme by eDAMIS (Reg. 1392/2007).  Following table is sent: STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Annual GDP data-Expenditure approach: Future compliances - Plan for alignment with acquis:  Independent estimates of expenditure categories Changes in inventories. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Current situation:  QGDP is compiled by production approach at current and constant prices.  Experimental calculation of quarterly GDP at current and constant prices by the expenditure approach is ongoing within IPA 2011 regional project. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Current situation - Production approach:  Quarterly data are available from 2010 year at current prices and from 2011 at constant (compared with the same quarter of previous year);  Timeliness t+90 days;  QGDP is compiled using combination of direct and indirect approach.  Compilation is done at NACE sector level and for G, H, I and J on 2-digit NACE level. Dissemination is done at NACE sector level;  QGDP by NACE Rev 2 is available for 2010 (only current price data) and at current and constant prices (Reg. 715/2010); STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Production approach:  QGDP 2012 is disseminated at the level of total economy but it is going to be revised and disseminated at NACE level as soon as annual GDP 2012 will be produced (end of September 2013).  GDP at constant prices has been produced using sources and methods that align as closely as possible to those used for the annual national account. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Production approach:  QGDP 2010 is derived from annual GDP data for 2010 at current prices by using pro rata technique and available indicators.  QGDP 2011 and 2012 at constant price for each quarter are estimated by extrapolation of previous year current price data with a volume index Qt/Qt- 4;  Quarterly data at current price are made by inflating the constant price data of current year with a price index Qt/Qt-4. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Production approach:  Explained approach is applied for all activities except for general government services, taxes and subsidies on products and financial services of commercial banks.  For the general government services, taxes and subsidies on products, and financial services of commercial banks current price value added is compiled from direct data source (consolidated budget and financial statements of commercial banks). STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Production approach:  QGDP data are compiled and disseminated as nominal values as well as growth rates to the corresponding quarter of the previous year.  FISIM is not calculated and allocated separately (Reg. 1889/2002) due to pro rata technique for deriving QGDP 2010 from annual GDP data which already include FISIM.  Owner occupied dwelling services is not compiled following user-cost approach (Reg. 1722/2005) because some of the data sources used for the annual national accounts are not available on quarterly level. Applying the same indicators as for annual dwelling services will be introduced in QGDP.  Table 0101 with quarterly data are sent to Eurostat through ESA 95 Data Transmission programme by eDAMIS (Reg. 1392/2007). STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Expenditure approach:  Experimental calculation of quarterly GDP at current and constant prices by the expenditure approach is ongoing within IPA 2011 regional project.  Using sources and methods that align as closely as possible to those used for the annual national accounts makes QGDP estimation possible for all components of the expenditure approach.  With estimation of Δinv using direct source of data from established quarterly survey for non-financial corporations based on the difference between opening and closing levels of stocks will try to improve the estimation other than making changes in inventories as the residual balancing item. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Quarterly GDP data: Future compliances - Plan for alignment with acquis:  Start compiling QGDP by production approach using direct source of data from established quarterly survey for non-financial corporations.  Start compiling QGDP by expenditure approach based on direct source of data and following the same statistical techniques as for the annual GDP.  Allocation of FISIM by users sectors (Reg. 1889/2002) will be implemented by using monetary statistics data from Central Bank (data on interest rates, stocks of loans and deposits) on quarterly level.  Using the Denton method for benchmark all QGDP estimates (current and constant prices) to the annual ones.  Chain link the quarterly volume measures using the annual overlap technique.  QNA Inventory will be prepared by July STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ESA-95 Problems we are facing with:  Additional staff members is necessary to be assigned to the national accounts department to address the work on development national accounts production.  The quality of the annual and quarterly national accounts estimates and the sustainable progress in work remain at risk because of the lack of additional staff and financial resources (for developing new and/or ad-hoc statistical surveys). STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

ECONOMY AND FINANCE Gross National Income (GNI) own resources Bilateral screening: Chapter 18 Presentation of Montenegro Luxembourg, June2013 STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

GNI own resources Current situation – General overview:  GDP data produced and published but GNI not yet published.  The basis for compilation of GNI is GDP data.  Annual GDP data by ESA 95 are compiled by production and expenditure approaches. Timeliness: t+9 month.  Annual GDP data by production side at current prices are available from 2000 and at constant prices from  Annual GDP data by expenditure side at current prices are available from 2000 and at constant prices from  Income approach is not implement. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

GNI own resources Current situation – FISIM:  FISIM was expressed as intermediate consumption and in totally subtracted from total GVA for period  Compilation of FISIM was improved in 2009 and FISIM is breakdown by 2- digit NACE level user’s industries on production side and allocated in HFCE by expenditure side (Reg. 1889/2002) for period 2007-onwards.  Export and import FISIM is not yet compiled. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

GNI own resources Current situation – Owner occupied dwelling services :  Owner occupied dwelling services is estimated by applying user-cost approach (Reg. 1722/2005).  For the census years (2003 and 2011) user-cost method is applied in detail, and for others inter-census years it is estimated using appropriate indicators. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

GNI own resources Current situation – GDP exhaustiveness:  GDP exhaustiveness estimation: the non-observed economy is partially measured – legal part (Decision 94/168).  Ongoing IPA 2011 regional project cover activity on improvement of exhaustiveness estimates in annual national accounts. MONSTAT is carrying out work on improvements on compilation of household tourism service activities, own-account construction activities and coverage adjustment on non-financial units.  The exercise on labor comparison is experimentally done within previous IPA 2007 national programme. The expert recommendation is to continue with reconciliation of different data sources for employees.  Compilation of theoretical and VAT fraud (Decision 98/527) is not done. Supply and use tables needs to be developed in order to have detail information for appropriate estimation of VAT fraud. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

GNI own resources Current situation - GNI own resources  Document „Description on sources and methods used for compilation non-financial national accounts" – available and regularly updated within IPA regional projects. Last updated with 2010 data as a referent year.  GNI is experimentally compiled for period Compilation is done by transferring GDP to GNI data using in total Balance of Payments data.  MONSTAT do not participate in the work of the GNI Committee as well as in verification exercise monitored by the Commission. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

GNI own resources Future compliances  Responsible institution for compilation of GDP/GNI data is MONSTAT. Stakeholders in the work on compiling and providing GNI data for the own resources purposes will be Central bank and Ministry of finance.  IPA 2010 national programme includes activity on compilation of GNI. Programme is started in May 2013 and will be close in 2015 when first official results of GNI data can be available.  Improve exhaustiveness compilation of GDP by production and expenditure side. The priority are employment comparison and VAT fraud estimates. Expert support is required by IPA 2010 national programme.  Estimation of import and export FISIM – by end of  Introduction of GDP income approach – by end of  Enlarge Description to start with preparing GNI Inventory which is required for checking of comparability and reliability of GDP/GNI data. STATISTICS Chapter 18: M O N T E N E G R O Negotiating Team for Accession of Montenegro to the European Union Chapter 18: Statistics

Thank you for your attention! QUESTIONS