NATIONAL ACCOUNTS: A PRACTICAL INTRODUCTION

1 ST/ESA/ Department of Economic and Social Affairs Statistics Division Studies in Methods Series F, of NATIONAL AccountingNATIONAL ACCOUNTS: A PRACTICAL INTRODUCTIONU nited NationsNew York, 2003iiNOTE Symbols of United Nations documents are composed of capital letters combined with figures. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

2 Where the designation country or area appears, it covers countries, territories or areas. LIST OF ABBREVIATIONS Cost, insurance and freight CPC Central Product Classification (United Nations) CPI Consumer price index FISIM Financial intermediation services indirectly measured Free on board GCF Gross capital formation GDP Gross domestic products GFCF Gross fixed capital formation GNDI Gross NATIONAL disposable income GNI Gross NATIONAL income IC Intermediate consumption ISIC International Standard Industrial Classification of All Economic Activities NCS Net capital stock NFC Non-financial corporation

3 NPISHs Non-profit institutions serving households PIM Perpetual inventory method PPI Producer price index ST/ESA/ Nations publication Sales No. ISBNC opyright United Nations 2004 All rights reserved Printed in United Nations, New YorkiiiPrefaceNational Accounts: A PRACTICAL INTRODUCTION has been prepared as part of a series being developed by the member organizations of the Intersecretariat Working Group on NATIONAL Accounts (ISWGNA) to assist countries in the implementation of the System of NATIONAL Accounts, 1993(UnitedNations publication, Sales ).

4 Its general objective is to provide an INTRODUCTION to some basic concepts and structures of the System of NATIONAL Accounts (SNA) to economists and policy makers who are not familiar with NATIONAL accounts, as well as other newcomers to the field of NATIONAL accounting. The text may serve as a guide to reading the SNA itself. In that sense, the text is written in as simple a style as possible, and therefore the detailed elaboration of concepts in both theory and practice is avoided.

5 Simple exercises are included, whenever possible, to make concepts and structures clearer to readers. The handbook also provides an example of the complete system in Excel so that readers can trace the linkages in the system by looking at the formulas there. A compilation spreadsheet that can be used for compiling NATIONAL accounts is also developed as part of the development of the handbook. It has been tested and used in many developing countries. Those supplements are posted on the web page of the United Nations Statistics Division as part of the series Handbook of NATIONAL Accounting.

6 The text is not intended to replace either SNA or other handbooks. Compilers are expected to read the details in SNA as well as PRACTICAL applications and methods presented in the handbooks prepared either by the United Nations Statistics Division, the Organisation for Economic Cooperation and Development (OECD), The International Monetary Fund (IMF) or the Food and Agriculture Organization of the United Nations (FAO). Many of those handbooks are posted on the web pages of the organizations that published them and can be obtained free of charge.

7 The following handbooks have already been prepared or published: xHandbook on Non-profit Institutions in the System of NATIONAL Accounts (United Nations publication, Sales No. E. ) xUse of the System of NATIONAL Accounts in Economies in Transition (United Nations publication, Sales No. E. ) xHandbook of Input-Output Table Compilation and Analysis (United Nations publication, Sales No. ) xHousehold Accounting: Experience in Concepts and Compilation (United Nations publication, Sales No.)

8 , and 2) xLinks between Business Accounting and NATIONAL Accounting (United Nations publication, Sales )xA System Approach to NATIONAL Accounts Compilation (United Nations publication, Sales )xUse of Macro Accounts in Policy Analysis (United Nations publication, Sales, No. ) xTourism Satellite account : Recommended Methodological Framework (United Nations publication, Sales No. ) xBalance of Payments Manual (IMF, 1993) xBalance of Payments Compilation Guide (IMF, 1994) xGovernment Finance Statistics Manual (IMF, 2001) xA System of Economic Accounts for Food and Agriculture (FAO, 1996) xIntegrated Environmental and Economic Accounting (United Nations publication, Sales No.

9 XHandbook on Quarterly NATIONAL Accounts, (Statistical Office of the European Communities (Eurostat) 1999) ivxQuarterly NATIONAL Accounts Statistics: Concepts, Data Sources and Compilation (IMF, 2001) xHandbook on Measurement of the Non-Observed Economy (OECD, 2002) xMeasuring Capital: A Manual on the Measurement of Capital Stocks, Consumption of Fixed Capital and Capital Services (OECD, 2001) xHandbook on Price and Volume Measures in NATIONAL Accounts (Eurostat, 2001) The present handbook was prepared by Vu Quang Viet of the United Nations Statistics Division.

10 Throughout the drafting of the handbook, valuable comments were provided by many experts in the field, particularly Cristina Hannig, Ivo Havinga, Karoly Kovacs, Mathias Reister and Mary Chamie of the United Nations Statistics Division, Brian Newson of Eurostat, Heidi Arboleda of the Economic and Social Commission for Asia and the Pacific, Estrella V. Dommingo of the NATIONAL Statistical Coordinating Board of the Philippines and Yatimah bt. Sarjiman of the Department of Statistics of Malaysia.