Short Term Statistics in National Accounts Michael Stanger National Accounts Department Central Bank of Chile CENTRAL BANK OF CHILE DECEMBER 2009

Subjects Quarterly National Accounts Monthly Economic Activity Indicator (IMACEC) Sources of information Methods applied Assessment of current economic situation

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 with a lag of 48 days. 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.

Monthly Economic Activity Indicator (IMACEC) The Imacec is a composite indicator of monthly production by all economic sectors combined, at constant prices. It is a proxy for quarterly and annual GDP variations, then it becomes the first estimate of the evolution of the real economy. The Imacec is compiled from 73 productive sectors. However, only the aggregate is published 35 days after the reference month. 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.

Sources of information National Statistical Bureau Revenue Office Other Government Offices (Ministries) Private Industrial Associations Own and Private surveys Customs

Methods applied Some of the main statistical method used in the compilation process: Benchmarking => Denton (proportional variant) Final Adjustment Procedures: Raking => Dagum - Cholette One way raking => Simple prorating Wedging => Simple interpolation Linking => Historical rate of change Seasonal Adjustment => X12 ARIMA

Assessment of current economic situation Weekly and monthly inspections are made on original and seasonally adjusted current series. There are basically three issues we focus on: Original same month annual rate of change; Seasonally adjusted previous month rate of change; Special events (shocks). Analysis on these three issues help us in detecting promptly eventual changes in GPD’s expansion path. However, more detailed analysis on certain industries and on other macroeconomic aggregates (consumption, inventories, investment) can eventually strengthen the first conclusions. (Currently, work in progress)

Assessment of current economic situation First signal: At least 4 months in advance

Assessment of current economic situation First signal: At least 1 quarter in advance

Assessment of current economic situation: Specific Activities. Effects on manufacturing started before

Assessment of current economic situation: Specific Activities. Different problems (supply) affected the mining sector before the crisis started, so the impact (demand) is not too clear.

Final remarks IMACEC is not a leading indicator of he economic evolution but a precise proxy of the evolution of quarterly GDP. Then, the use of seasonal adjusted series to asses current economic situation reflects recent status’ evolution instead of warning future changes. However, these types of analysis are fairly timely and useful in periods when QNA are not yet available. Despite of the usefulness of the analysis of SA series, detailed analysis on industries (subject matter expertise) is an unavoidable complement when compiling and reporting official statistics. A mid term goal is to develop complementary analysis of monthly series related to expenditure such as final consumption and changes in inventories.

Short Term Statistics in National Accounts Michael Stanger National Accounts Department Central Bank of Chile CENTRAL BANK OF CHILE DECEMBER 2009