1 Item 4: Long time series when major changes occur Recalculation of the Russian GDP Series due to Introduction of New Classifications Irina Masakova Rosstat Joint UNECE / Eurostat / OECD Meeting on National Accounts (Geneva, April 2006)

2 Main issues FEDERAL STATE STATISTICS SERVICE (ROSSTAT)  OKONKh: previously used classification (institutional industries)  OKVED: new classification (kinds of economic activity)  Changes in the accounting standards and regulations  Matrix approach to recalculation of the GDP series  Main results of the GDP series revision

3 Classification OKONKh FEDERAL STATE STATISTICS SERVICE (ROSSTAT) Russian classification of the industries of the economy - OKONKH:  grouping by kinds of activities of different character  accounting unit – establishment of the enterprise realizing an homogenous activity  800 kinds of activity

4 Classification OKVED FEDERAL STATE STATISTICS SERVICE (ROSSTAT) Russian Classification of Kinds of Economic Activity– OKVED:  Similar to NACE  category – kind of economic activity  1800 kinds of activity  in force since January 1, 2003; – the transition period; data collected by two classifications (OKONKh and OKVED)

5 An enterprise in the framework of OKONKh FEDERAL STATE STATISTICS SERVICE (ROSSTAT) Metallurgy plant Green- houses Mining of ferrous metal ores Rolled metal production Metal blocks product- ion Metal ware product- ion BakeryConstruct- ion unit Agri- culture Industry Construc- tion

6 Comparison of OKONKh and OKVED FEDERAL STATE STATISTICS SERVICE (ROSSTAT) OKONKh Stand alone boilers Production of ferrous metals Steel pipes Underground mining of ferrous metal ores Coking industry Metal blocks production Electric power Ferrous metallurgy Production of light metal ware Machine-building and metal processing OKVED Industry Е - Electricity, gas, water: production and distribution Non-metallic construction materials Construction materials CB Mining exclusive of fuels С - Mining DJ Metal production and finished metal goods DF Production of coke, oil products and nuclear materials D – Manufacturing

7 Changes in the accounting standards and regulations FEDERAL STATE STATISTICS SERVICE (ROSSTAT) 1. Resolution on the composition of production costs 2. Tax Code 3. New definition of the main kind of activity

8 Matrix approach (1) FEDERAL STATE STATISTICS SERVICE (ROSSTAT) А – volume of shipments B – changes in inventories of finished goods C – changes in unfinished production D – raw materials for tolling E – subsidies on production F – taxes on production X – output of the industry For each А, …, Х a matrix is constructed Institutional industry Pure industry X = A + B + C + D – E + F

9 Matrix approach (2) FEDERAL STATE STATISTICS SERVICE (ROSSTAT) А B C D X Output by institutional industries Output by pure industries Enterprise statistics Correction matrix Alternative data sources X’ Output matrix

10 Matrix approach (3) FEDERAL STATE STATISTICS SERVICE (ROSSTAT) Gross Value Added Calculation GVA – gross value added IC – intermediate consumption IC_ratio – ratio of intermediate consumption to gross output IC = X’ * IC_ratio GVA = X’ - IC

11 Matrix approach (4) FEDERAL STATE STATISTICS SERVICE (ROSSTAT) += Calculation of output in constant prices Matrix obtained by extrapolation Matrix obtained by deflation Output in constant prices

12 Main results of the GDP recalculation FEDERAL STATE STATISTICS SERVICE (ROSSTAT) Real GDP to Q OKONKh OKVED Change 2003 I II III IV I II III IV