Bulletin No 3 2014 World Championship Qualification Womens Group E - KINGSTON,JAMAICA
EXPENDITURE APPROACH January 30-February 1, 2013 Kingston, Jamaica.
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Transcript of EXPENDITURE APPROACH January 30-February 1, 2013 Kingston, Jamaica.
EXPENDITURE APPROACH
January 30-February 1, 2013Kingston, Jamaica
Background The expenditure approach to calculating GDP
is the sum of household and government
spending on goods and services, investment
in fixed capital (construction, machinery and
equipment), changes in inventories and
exports less imports of goods and services.
Background GDP by Expenditure Approach =
final consumption (C + G)
+ gross capital formation (I)
+ exports (X)
– imports (M)
Expenditure ComponentsY = C + G + I + (X – M)C Consumption expenditure by householdG Consumption expenditure by
governmentI Gross Fixed Capital Formation plus Change in InventoriesX Value of ExportsM Value of Imports
Household Final Consumption Expenditure (HFCE)This consists of expenditure of
resident households on the consumption of goods and services.
For households, all consumed goods, whether durable (cars, refrigerators, air-conditionersetc.) or non-durable (food, clothes), are part of final consumption.
Household Final Consumption Expenditure (HFCE)Includes:goods and services bought for final
consumption by householdsEstimated value of barter transactionsgoods produced for own final consumption by
householdsImputed value of housing services produced
by owner occupiers
Household Final Consumption Expenditure (HFCE)Services produced by employing paid
domestic staffExclusion: expenditure on fixed assets in
the form of dwellings or on valuables.
Estimated using a commodity flow method
Government Consumption Expenditure (GCE)Final consumption expenditure of
government is the value of goods and services produced by the industry for its own use.
The estimates are computed as gross output less sales of goods and services by government entities.
Government Consumption Expenditure (GCE) Output is valued as the sum of the cost of
production: - Compensation of employees - Intermediate consumption - Consumption of fixed capital - Other taxes(less subsidies) on
production
Government Consumption Expenditure (GCE)The main data sources are:
- Estimates of revenue and expenditure of central government
- government educational institutions- parish councils - public health authorities- statutory bodies.
Gross Capital Formation
Gross Fixed Capital Formation
Gross fixed capital formation is defined as
that part of the current output of goods and
services, which adds to the stock of capital,
and therefore increases the future potential
income flows of the economy.
Gross Capital Formation cont’dIt includes produced capital goods
(machinery, buildings, roads, artistic originals
etc.) and improvements to non-produced
assets.
Gross fixed capital formation is estimated
using a commodity flow approach
Gross Capital Formation cont’dChanges in InventoriesInventories consist of:raw materials - goods owned by producers
that have been purchased for intermediate consumption but not yet used
finished goods - goods produced for sale but not yet sold
work in progress – output that is not yet sufficiently processed for delivery to users
Gross Capital Formation cont’d
Changes in Inventories
Goods entering into inventories are recorded
when products are acquired or produced, and
valued at the prices prevailing at the time
Goods withdrawn from inventories are
recorded when products are sold or used, and
valued at the prices prevailing at that time
Gross Capital Formation cont’dChanges in Inventories
The Jamaican system accepts the valuation placed
on inventories by the reporting establishments.
Information is obtained from the
- Annual National Income Survey
- Financial statements
Net Exports
International Merchandise Trade Statistics
(STATIN) is the data source for imports and
exports of goods.
Trade statistics
Imports of goods are valued c.i.f
exports of goods are valued f.o.b
In the national accounts ,imports of goods are
adjusted to f.o.b
Net Exports cont’d
Data for trade in services are obtained from
the Balance of Payments statistics.
Expenditure on GDPCurrently GDP by Expenditure is estimated
annually at current prices.
GDP by Expenditure at constant prices is
compiled but not yet published
Expenditure on GDP (cont’d)Expenditure Components 2011
J$M
2011J$M
Final Consumption Expenditure 1,261,961
Household HFCE 1,063,536
Government GCE 198,425
Gross Capital Formation GCF 264,044
Gross Fixed Capital Formation
GFCF 258,015
Inventories Inv 6,029
Gross Domestic Expenditure 1,526,004
Export of Goods and Services Exports 383,866
Less Import of Goods and Services Imports 668,087
Expenditure on GDP 1,241,783
Expenditure on GDP (cont’d)
85.6%
16.0%
20.8%
0.5%
22.9%
GDP by Expenditure 2011
HFCE
Government
GFCF
Inventories
X-M
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