Implementation 1993 SNA in statistical practice of Azerbaijan The State Statistical Committee of the Republic of Azerbaijan Sabina Guliyeva Senior Adviser of National Accounts Statistics Department

Pre-conditions of introduction SNA The socio-economic transformations occurring in the country and transition to market economy Integration of Azerbaijan to the world association Necessity of transition of all statistics to the world standards and provision of comparability indicators of statistics at the international level Necessity of creation of qualitatively new system of the macroeconomic indicators, gives opportunity to make deeper and complex analysis at economic situation

Preparation to introduction SNA Transition from tables and indicators of Balance of National Economy to indicators of System of National Accounts began in first half 90th years in close cooperation and with technical help ОECD.

Actions for provision of introduction SNA Improvement existing and elaboration of new forms of the reporting Improvement of the base of information Creation of the register of the enterprises adequate to the international standards Introduction of the international classifiers Experimental calculations of GDP created conditions for elaboration indicator of GDP which is one of basic units of SNA

Current position National accounts are making up for 5 institutional sectors: Non-financial corporations Financial corporations General government Households Non-commercial (public) organizations served for households (NPISH) Making accounts SNA are conducted in according with concepts and definitions of System of National Accounts of the United Nations 1993 (1993 SNA).

Current position (financial account) Construction of the financial account is general recommendation of 1993 SNA and is necessary in the future. The financial account should provide the account of change of the financial actives belonging to the enterprises, financial corporations, households, non-commercial organizations. For example, it is necessary to have the information on financial actives of the religious organizations. The financial account is experimentally made for 2006.

Works on improvement of information base are conducted for this account. In conditions of wide dissemination of non-observable economic activity and commercial secret make it extremely difficult. At least, it is necessary to have wide access to the bank information, and it will more coordinate with functions of the Central Bank, than with functions of SSC. To solve this problem, probably will be needed more time, than represented at initial stage of work. Financial account (continuation)

At the end of the last year we start experimental work on making of financial account SNA. And later we conducted one time survey by technical support of Eurostat on non-financial enterprises for making of this account as results of The data are collecting at the moment. Financial account (continuation)

Table’s Input-Output Taking into account that system of table’s input-output is the irreplaceable instrument for the analysis of economic processes and management of economy, the problem of making of these tables always remained in our field of vision and in conditions of stable-dynamical development of a national economy begun in second half 90 the decision to make accounting inter-branch balance was accepted according to 2001.

Major importance of making table’s input-output - that they define and create a basis for the deep analysis of structure of a national economy, inter- branch communications, and also structures of production and expenditure of GDP. Table’s Input-Output (continuation)

Regional accounts Since 2001 are conducted calculation of GRP indicator on several large regions of the country By the end of 2008 it is planned to receive estimations of GRP in all regions of the country with accounting of main principles 1993 SNA concerning to the unit of resident

Quarterly national accounts Presence and the publication of quarterly national accounts is one of conditions of connection of the country to the Special standard of distribution of the data of IMF In SSC of Azerbaijan work above quarterly GDP on a discrete basis has been started in 2003 by technical support of IMF

Analytical basis SSC of Azerbaijan makes the annual and quarterly statistical data on national accounts, proceeding from concepts and the definitions recommended 1993 SNA. Definition GDP shows a total cost of the goods and the services made by all residents in territory of the country during the certain period, intending for final consumption, saving and import. Quarterly GDP calculated by methods of production and expenditure in current and constant prices (base year-2001) There are numbers of the data since 1998

Systems of used classifications The national classifier of Kinds of economic activities (İFNT), based on NACE The budgetary Classification based on Classifications of government on functions, Classifications of income and expenditure

Scope of operations GDP includes all kinds of activity within the framework of sphere of production 1993 SNA, except the operations with the military goods. Unaccounted activity GDP includes finish counting on production of the goods and services by households and natural persons engaged in business activity, and also amendments on understating and misses of the data in official statistical accounting Finishes counting on criminal activity (the weapon, drugs, prostitution and etc.) in GDP are not included, because this sphere has insignificant scales from the economic point of view

Time of registration As a whole all operations are reflected on the basis of a principle of adding according with recommendations 1993 SNA. However, the data on sector of the government are taking by a cash method.

Cost estimation Cost of market production is indicated in basis prices Output production for own consumption is estimated in equivalent market prices Transport extra charges, taxes from sales and excise taxes are included in estimation of intermediate consumption The VAT is included in estimation of intermediate consumption except of the part of the VAT which is subject to a deduction Total sums of cost of import and export are estimated on a basis of free on board (fob)

Character of the reference data Method of production The basic sources of the data are the regular quarterly reporting of large, average and small enterprises, the data on execution of the state budget, incomes and expenditure of Fund of Social protection, Oil Fund, Ministry Finance and other administrative data The basic volume of the information on manufacture of agricultural production and services turn out from sample surveys of farmer and peasant economy The share of intermediate consumption in output on corresponding kind of activity is accepted, while, identical for all quarters and average annual significance of share of intermediate consumption calculating for the previous year The reporting allowing shortly obtaining the data on intermediate consumption has already introduced separately for each quarter

Method of expenditure The data on expenditure of GDP in current and constant prices are published in breakdown on the basic categories of expenditure: Final consumption, separately on: Households Government Non-commercial (public) organizations served for households (NPISH) Gross saving of the capital and change of stocks Export and import

Method of expenditure (continuation) Final consumption of households are calculated on the data of households budgets surveys and retail trade (with correction on purchases of non-residents and purchases of the goods by the enterprises in a network of retail trade) Source of the information on consumption of government is the report on execution of the state budget of the Ministry of Finance Indicators of consumption NPISH are formed on the basis of reports of the corresponding organizations Indicators of saving are formed on data of regular quarterly and annual reporting of the enterprises The data on export and import - on indicators of the balance of payments

Calculations in constant prices At calculation of dynamic numbers in average annual prices of base year, making units of GDP are extrapolated independently on each indicator with the help of consecutive multiplication of chain indexes of physical volume The method of unary deflation is used

Method of production Output on agriculture is deflated by means of price index of agricultural production, and output on trade by means of consumer price index Output on industry, construction and transport is estimated in constant prices with using of indexes of physical volume corresponding branches For a deflation of non-market services - index on number of employees Net taxes are transforming in constant prices with using generalized deflator of the gross value added of taxable branches

Method of expenditure Final consumption of households is deflated by means of consumer price index Consumption of the government and non-commercial organizations serving households is deflated by means of index on number of employees Export and import of the goods and services are estimated only in the current prices because of absence corresponding price index. At the moment work on index is conducting and it will be introduced by the end of 2008

The data of quarterly GDP calculated by the methods of production and expenditure started to publish from the beginning of The publication of the data of quarterly GDP

The international cooperation in the field of National Accounts In the field of elaboration and conducting national accounts SSC of the Republic of Azerbaijan actively cooperates with international statistical institutes with such organizations, as ОECD, IMF, UNECE, Eurostat and with statistical services of the countries CIS. These contacts serve as a good basis for accumulation of experience in this area and for the decision of available problems.

The publication of the data on SNA The data on National Accounts are published in a yearbook «National Accounts of Azerbaijan» and in the annual collection «Statistical Yearbook of Azerbaijan» and on website of SSC.

Thank you for attention!