Workshop on National Accounts New Delhi, India, 6-9 July 2009 Annual National Accounts of the MALDIVES

Introduction  Annual GDP estimates are prepared in constant prices by industry, using the production approach.  The base year for the existing constant price GDP series is This base year GDP estimates have been derived from a supply and use table (Pilot-SUT) prepared for the Maldivian economy for  At present, the compilation of the annual accounts (by industry and final expenditure components) in constant prices is done in the framework of a “Macro-Economic Budget” (MEB).

Introduction (2)  Annual GDP estimates prepared in constant prices are used to derive the current price GDP by incorporating the inflation rates from the Consumer Price Index, and observations in some of the production cost and import and export unit value indices  GDP at current prices by industry is not yet available

Data Sources  Financial Reports of Public and Private Companies (Annually)  Government Budget (Annually)  BOP (Annual)  Large and Small Establishment Surveys (specific years)  Household Income and Expenditure Surveys/ Population and Housing Census (every 5 years)  Economic Survey (2007 initial, planned for every 5 years)  Foreign Trade Data (monthly)  Volume indicators from other government offices (monthly)

Classifications Used  ISIC 3.0 (for surveys/census data for industry classification)  CPC 1.0 (for survey and census data/ products classification)  COICOP (for HIES survey to code products and services)  HS (for foreign trade statistics)

SPECIFIC METHODS USED IN GDP ESTIMATES AND FORECASTS

Agriculture and Forestry The baseline survey of agricultural crop production during 1995 carried out by the Ministry of Fisheries and Agriculture.  The production of forestry (i.e. timber) has been estimated through the product balance.  Production of agricultural crops on these islands was enumerated both in agricultural plots as well as in home gardens. The estimates of the various crops, in terms of area cultivated, crop yields and harvest periods were raised to the total for agricultural islands  Data sources  The data source used for the estimation of agriculture are forestry and livestock is SES 2002/2003.  SES 1998/1999 was used to compare the input structure.

Fisheries  The two industry branches, fisheries and fish processing have been analysed jointly in order to establish the link between production and use, both in terms of volume and values  Data sources  Fish catch estimates and input structure breakdown from Ministry of Fisheries, Agriculture and Marine Resources.  Commercial and consumer price of fish; Quantity, value and price of fuel sold for fishermen, Employment from Census 2000 and 2006

Mining  Coral and sand mining is done in the Maldives on a limited scale. Mining is allowed only in specific well- demarcated zones.  Data sources:  The data source used for the estimation of mining and quarrying is SES 2002/2003.

Manufacturing  Fish Preparation; Food Products; Beverages; Tobacco; Apparel; Wood Planning and Furniture; Paper, printing and publishing; Soaps and detergents; Cement products; Electrical equipment; Shipbuilding and repair; Other manufacturing  Data sources:  The data source used for the estimation of Manufacturing are Large Establishment Survey (LES) 2004, Financial Statement of companies (FS), Small Establishment Survey (SES) 2002/2003.  Fish production data used from fish processing establishments on a monthly basis

Electricity generation and distribution:  Electricity generation and distribution consists of electricity production in Male' and outer atolls. State Electric Company (STELCO), is the main body engaged in the distribution of electricity to the public. The estimates of electricity for 1995 have been obtained directly from the analysis of annual accounts of the STELCO.  Data Sources: The monthly electricity production by the public sector is used as the indicator for this industry. Monthly data from the STELCO and Maldives Airports Authority (generates electricity for airports, which was previously done by MEB) is used.

Collection, purification and distribution of water:  The direct estimates of water distribution has been obtained from the annul report of the Male' Water and Sewerage Company (MWSC).   Data Sources: The annual reports for 1996 and 1997 were used to estimate value added for those years. From 1998 onwards volume data on water distribution by month have been used as an indicator for the industry.

Construction  The construction sector consists of constructions of infrastructure like public roads, public harbours, ports, airports, and residential and non-residential buildings like government offices, schools, hospitals, other public building (including mosque and military premises), resorts, offices, shops and houses.  Data sources  The data sources used for the estimates of this sector are Large Establishment Survey (LES) 2004, Financial Statement of companies (FS), Small Establishment Survey (SES) 2002/2003 and administrative data from Maldives Customs, building permits and expatriate workers in the construction sector

Trade  The Trade industry consists of wholesale and retail trade and sales, maintenance and repair of vehicles services.  Data sources  Distribution sector is linked to household consumption. This is made up of two parts, namely local products and imported goods. Local products are updated with the population growth and the imported goods are updated with the value of imports deflated with the Consumer Price Index (CPI) to obtain the real values.  The data sources used for the estimates of this sector are Large Establishment Survey 2004, Small Establishment Survey 2002/2003 and Financial statements of Companies.

Hotels and restaurants – Resorts  The tourism industry consists of resorts, hotels and restaurants, vessels for inter-atoll cruises and guesthouses.  Extrapolation the indicator of the volume of output of resorts is the number of bed-nights.  Data sources  The data sources used for the estimates of this sector are Large Establishment Survey (LES) 2004, Financial Statement of companies (FS), Small Establishment Survey (SES) 2002/2003 and administrative data from Ministry of Tourism and Civil Aviation, Department of Inland Revenue and Ministry of Finance and Treasury

Transport  Transport industry comprises of land transport, water transport, air transport and auxiliary transport.  Data sources  land transport: the number of registered taxis has been selected as the volume indicator.  Water transport: the number of registered vessels has been selected as the volume indicator.  Air transport: The air transport branch consists of Air Maldives, Air Taxi and Humming Bird Helicopters. For future years, these annual report information have been projected based on the past trends.  Auxiliary Transport: the activities of the Maldives Airport Authority and the Maldives Port Authority are included

Post and Telecommunications  Post and telecommunication branch consists of Maldives Posts Limited and Dhiraagu telecommunication company. These two companies are public enterprises.  This activity is broken down into two sub-groups, namely the telecommunications company (Dhiraagu) and the Maldives Post.  For Dhiraagu, monthly information on the number of international and national call minutes have been used. The change in the volume of international calls and national calls have been linked to the shares of international and national business reflected in the 1995 company accounts. Now the wataniya (new entrance in 2004) has been included  Maldives Post has been linked to the mail handled at Male' international airport. Monthly data have been used.

 This industry comprises of Maldives Monetary Authority (MMA), Bank of Maldives (BOM), State Bank of India, Bank of Ceylon and Habib Bank and the Insurance companies, Allied Insurance and SriLankan Insurance.  Their output growth has been linked to the change in business GDP. Maldives Monetary Authority, Deposit and other Banks and Insurance

Real estate, Machinery & equipment rental, Business services:  Real estate consists of two components, that is, renting of building and land and an imputed service for owner-occupied dwellings. Business services mainly consist of services provided for auditing and accounting, legal, advertising and engineering.  their volume growth has been linked to the change in "Total business" value added.  Data sources  The data sources used for the estimates of this sector are HIES 2002/2003, VPA II and SUT 1997 and financial reports

Imputed rent of owner-occupied dwellings:  The estimate for the imputed service for owner-occupied dwellings was derived from the Population and Housing Census.

Public administration and defense  The branch estimate for public administration and defense has been based on the consolidated annual budget of the central government.  Data Sources: Value added in this activity is (by definition) mostly wages and salaries. From the annual government budgets, the information on compensation of employees is taken.

Education, Health and Other community, social, personal services  This branch consists of activities taking place in the private sector. For eg: clinics, tuition classes etc. The estimates are obtained from employment data and imputed wage rates.  Extrapolation At present no information on these sectors is available and their performance has been linked to population growth.  Data sources  Actual budget figures from Government Budget, SES 2002/2003 and administrative data from Ministry of Education were used for education estimates  Actual budget figures from Government Budget, SES 2002/2003 and financial statement of ADK Enterprises Private Limited.

FISIM  For the treatment of FISIM, a nominal industry was created in the SUT 1995 of which he output the output was set to zero through the introduction of a negative operating surplus of the same total amount. This treatment is still inline with the SNA 93 recommendations. Although SNA has a preference of FISIM being allocated to the industries on the basis of outstanding loans and deposits.  Extrapolation  The change in FISIM has been linked to the change in average amount of loans outstanding at the end of the period to the private sector. And since these values are “current” prices, the percentage growth in current prices has been reduced with the change in CPI to estimate the change in constant prices.

Price and other indicators  CPI prepared on a monthly basis is used to deflate all sectors which doesn’t have a specific index.  PPI and PI a very preliminary index prepared on a quarterly basis. Some sectors are deflated using this index  Import and Export Indices prepared on a monthly basis, also very preliminary index used. Building material index used to deflate construction sector.

Challenges and Difficulties faced in GDP computation  Discontinued current price GDP due to high discrepancies  Availability of financial statements  Availability of reliable time series data sets  Staff capacity

SNA Implementation  SNA 93 is being followed in preparing SUT  Currently, only production account is being produced. However, it is planned in the country’s NSDS  Rebase GDP to 2003, by end of 2010  Continue doing a SUT every 5 years, 2007 now on the way, next to be done in 2012  Rebase every 5 years  To prepare GDP in current price by production approach by 2010  Prepare quarterly GDP by production approach by 2014  Prepare GNDI by 2015

Adequate data availability  SNA requires very detailed information, which we lack at present. However, with the future plans of access to financial statements and survey schedule hopefully this problem will be solved

Challenges faced  Adequate data availability  Staff with adequate knowledge  Staff turnover

Type of technical assistance  To initiate quarterly national accounts  Training in the field of national accounts

GDP Estimates – the current economic situation in the Maldives

GDP Growth,

GDP outcome for 2008 and projections for  Economic growth of the country was estimated at around 5.7 for 2008  However, estimate for 2009 released in June shows a -1.3% for 2009  The sectors Tourism,

Current endeavors  In the process of compiling a SUT for 2007, under ADB Reta 6483  Compiled SUT for 2003 and publishing by end of July  Rebasing GDP to 2003 using the SUT 2003, currently ongoing.

Thank you