Overview of the system of national accounts
(chapter 1 of the esa 2010 gni inventory)

estonia

reference year 2010

following the agreed recommendations as laid down
in document GNIC/280 rev. 2 EN - "ESA2010 GNI Inventory Guide".

VERSION May 2016

Gross National Income Inventory

ESA 2010

2. version

Estonia

2016

1

GNI Inventory (ESA 2010). Estonia

Copyright:

Statistics Estonia, 2016

1

GNI Inventory (ESA 2010). Estonia

Table of Contents

Chapter 1.Overview of the system of accounts

1.1.Introduction

1.1.1.Main approaches used

1.1.2.Organisation and responsibilities within the NSI

1.1.3.Quality management

1.2.The revisions policy and the timetable for revising and finalising the estimates; major revisions since the last version of the GNI Inventory

1.3.Outline of the production approach

1.3.1.Reference framework

1.3.1.1.Register data

1.3.1.2.Delimitation of institutional sectors

1.3.2.Valuation

1.3.3.Main data sources

1.3.4.Transition from private accounting and administrative concepts to ESA 2010 national accounts concepts

1.3.5.The roles of direct and indirect estimation methods and of benchmarks and extrapolations

1.3.6.The main approaches taken with respect to exhaustiveness

1.4.Outline of the income approach

1.4.1.Main data sources

1.4.1.1.Compensation of employees

1.4.1.2.Other taxes and subsidies on production

1.4.1.3.Consumption of fixed capital

1.4.1.4.Transition from private accounting and administrative concepts to ESA 2010 national accounts concepts

1.4.2.The roles of direct and indirect estimation methods

1.4.3.The main approaches taken with respect to exhaustiveness

1.5.Outline of the expenditure approach

1.5.1.Main data sources

1.5.1.1.Household final consumption expenditure

1.5.1.2.NPISH final consumption expenditure

1.5.1.3.Government final consumption expenditure

1.5.1.4.Gross fixed capital formation

1.5.1.5.Changes in inventories

1.5.1.6.Acquisitions less disposals of valuables

1.5.1.7.Exports and imports of goods and services

1.5.2.The roles of direct and indirect estimation methods

1.5.3.The roles of benchmarks and extrapolations

1.5.4.The main approaches taken with respect to exhaustiveness

1.6.The balancing or integration procedure, and main approaches to validation

1.7.Overview of the allowances for exhaustiveness

1.8.The transition from GDP to GNI

1.9.Main classifications used

1.10.Main data sources used

Chapter 1.Overview of the system of accounts

1.1.Introduction

1.1.1.Main approaches used

Statistics Estonia (SE) compiles national accounts according to the concepts, definitions, classifications and accounting rules of the European System of Accounts (ESA 2010). Gross domestic product (GDP) is compiled by three different approaches:

  • Production approach;
  • Expenditure approach;
  • Income approach.

In GDP compilation the production approach is considered to be the most reliable method, because of more detailed information is available for this approach, and there are more possibilities to verify the estimates against alternative data sources. The expenditure approach is an independent approach as the various expenditure components are completely estimated.

The reconciliation between production, expenditure and income based estimates of GDP is performed in the supply and use tables at the detail product level. Both the supply and use sides’ aggregates are revised in the balancing process, but the demand side is mostly affected when balancing. Changes in inventories are sometimes adjusted in the balancing process, but stocks are not treated as a residual item. The GDP by income approach is not an independent approach as operating surplus and mixed income are derived residually when balancing the supply and use tables.

The final estimates of GDP by production, expenditure and income approaches are based on the supply and use tables, which were integrated into the annual national accounts compilation process in 2006. Starting from the accounting year 2000, the Statistics Estonia produces the supply and use tables at current and constant prices regularly on an annual basis, which provide an important check on the quality of the national accounts estimates. The supply and use tables provide a framework for compiling consistent and reliable GDP data by production, expenditure and income approaches.

1.1.2.Organisation and responsibilities within the NSI

Statistics Estonia (abbreviation SE) is a government agency in the area of administration of the Ministry of Finance. The main task of Statistics Estonia is to provide public institutions, business and research circles, international organisations and individuals with reliable and objective information on the economic, demographic, social and environmental situation and trends in Estonia. Official statistics is in compliance with international classifications and methods and in accordance with the principles of impartiality, reliability, relevancy, profitability, confidentiality and transparency.

In producing statistics, Statistics Estonia is guided by the Official Statistics Act that came into force in July 1997. The Act was amended in June 2000 and in August 2010[1]. It defines the contents of official statistics, principles and quality criteria of producing official statistics, the role of the Statistics Estonia in preparation of the official statistical programme and implementation of the statistical methods used in conducting surveys and the respondents and their obligations and liabilities. It also includes regulations on the data collection, statistical processing, storage and dissemination of data. The values that the work of the institution is based on are reliability, co-operation and innovation.

For providing information, SE performs statistical actions, the results of which are published in the Statistical Database. The volume of statistics that is published electronically has increased year by year. Statistical data which are of interest to the public are outlined in news releases. Information on the published statistics is available in the release calendar.

Statistics Estonia can trace its origins back to the establishment of the State Statistical Central Bureau of the Republic of Estonia in 1921. However, SE can be considered to be a relatively “young” national statistical institute in that most of its modern development only dates from the foundation of the new state in the early 1990’s. The workforce is highly skilled with over 55% holding a Master’s degree or higher and an additional 20% holding a Bachelor’s degree. SE makes effective use of modern IT tools, promotes electronic data collection and, in accordance with the statistical legislation, makes maximum use of administrative data for statistical purposes.

There are eight Departments reporting to the Director General (DG) and to the two Deputy Directors General (please see Chart 1.1 for organigram of SE). One Deputy DG, with a focus on data collection and processing, has responsibility for the Data Processing and Registers Department, the Data Warehouse Department and the Metadata Department. The second Deputy DG, with a statistical outputs focus, has responsibility for the Enterprise and Agricultural Statistics Department, the Economic and Environmental Statistics Department, the Methodology and Analysis Department (including social statistics) and the Marketing and Dissemination Department. The final department, the General Department, which provides services across the organisation, reports directly to the DG.

The Statistical Council is an advisory body for Statistics Estonia in the production of official statistics. The Council was established in 2010 and consists of the representatives of Statistics Estonia, Eesti Pank and the Data Protection Inspectorate as well as the representatives of users and respondents. The objective of the Statistical Council is to ensure, by giving advice and delivering opinions, the functioning of the official statistical system. The membership and rules of procedure of the Council are published on SE’s website.

Compilers of national accounts statistics

There are 55 civil servants working in Economic and Environmental Statistics Department;27 people are entirely or in some extent engaged in compilation of national accounts statistics. Department is lead by the Head and two Deputy Heads. The Head of Department is also the team leader for price statistics, one Deputy Head is the team leader for national accounts and the other for environmental statistics.

There are no internal units within the department; working teams are formed based on the datasets and components included in the statistics produced. One expert can be a member of several working teams, depending on the expertise and subjects. For example, the short-term national accounts team is responsible for quarterly and provisional annual estimates of GDP and the team members are responsible for the calculation of all the GDP components which can be used for other datasets as well; sectoral accounts is one example. Sectoral accounts team is responsible for non-financial institutional sector accounts, regional and annual financial accounts; the team consist of compilers of the components necessary for the compilation of these datasets.Teams are lead by Leading Statistician-Methodologists.

Annual national accounts team is responsible for final GDP estimates at current and constant prices derived from the supply and use tables, compilation of symmetric input-output table, EU own resources GNI data reporting, calculation of the weighted average rate of value added tax for a statement of the VAT resources base and Tourism Satellite Accounts. Government finance statistics team is responsible for the excessive deficit procedure statistics, quarterly and annual general government financial and non-financial accounts.

Chart 1.1Structure of Statistics Estonia as of 01.10.2015

The main partner for national accounts compilers is Enterprise Statistics Department as a provider of primary data for non-financial enterprises, some segments of financial enterprises and non-profit institutions. This department is responsible for structural business statistics and foreign trade statistics used in national accounts. For agriculture sector, Economic Accounts for Agriculture (EAA) with detailed data on output, intermediate consumption and value added components are also prepared by the Enterprise Statistics Department.

1.1.3.Quality management

Statistics Estonia has been established for the production of official statistics. Official statistics are public information that complies with specific principles and quality criteria. These have been agreed by the United Nations Economic Commission for Europe and in the Treaty on European Union (Article 338). The principles and criteria are defined in detail in the European Statistics Code of Practice (CoP). Compliance with the CoP is assessed by independent experts. Estonia underwent a peer review in 2006 and in 2015. The latest peer review noted SE as highly compliant with international requirements.

SE gives the highest priority to adopting directly European and other international statistical policies, standards, classifications and methodologies. Notable example of this is the adoption of the Generic Statistical Business Process Model (GSBPM) as the underlying architecture for the management and development of its statistical products and processes. The current process based organisational structure is closely aligned with the Generic Statistical Business Process Model (GSBPM) Version 4.0. The production of national accounts statistics is organised following this model.

Chart 1.2GSBPM implemented in SE in October 2013

SE has a strong tradition of using a total quality management approach in monitoring and developing its statistical products and processes. In addition to the CoP related self-assessment and peer review exercises, SE carried out EFQM/CAF-based assessments on three occasions (2007, 2009 and 2011) and received the “Committed to Excellence” recognition for two of these exercises.

The mission of SE is to provide reliable and objective information about Estonia. In this way SE supports democratic decision-making based on facts, as well as scientific research, by producing reliable statistics describing society. The vision underlines that official statistics are “the primary source of reliable information”.

Reliability means that the official statistics produced by SE reflect the real situation as accurately, truthfully and consistently as possible, and that the data sources and statistics production methods are chosen on the basis of scientific criteria.

Objectivity means that the statistics are produced in a systematic and impartial manner, which requires adherence to professional and ethics standards and the transparency of all activities for users and respondents.

The mission statement highlights two of the six quality criteria of official statistics (impartiality, reliability, objectivity, professional independence, cost-efficiency and statistical confidentiality), but these two cover the rest as well.

High level signed agreement on exchange of primary data and cooperation on development statistical methodologies exist with the Eesti Pank, the producer of official statistics on monetary and balance of payment statistics. Also, signed agreements on data extraction exist with all the registers and other providers of administrative data.

Within SE there are no officially signed service level agreements between the national accounts units and all the units supplying basic data to the national accounts units. The exchange of data needs is realised through job orders which are coordinated and approved electronically by data suppliers and national accounts units once a year, usually before the beginning of new calendar year. Special software named JIRA is used for management and monitoring the job orders.

For each compilation round, the basic data used for the national accounts estimates is checked and verified by the experts responsible for the component. Validation meetings are held and the owner of the underlying basic data is also a member of the validation team. For finalisation of the data release the validation of compiled national accounts estimates and press release is performed by the final validation team consisting of responsible leading statistician-methodologist, head and deputy head of Economic and environmental statistics department.

There are no other bodies or other statistical officials involved on the validation and supervision of the national accounts statistics at the moment. Statistical Council on Macroeconomic Statistics, providing methodological advise, is under formation and may be consulted in complex issues in the future.

1.2.The revisions policy and the timetable for revising and finalising the estimates; major revisions since the last version of the GNI Inventory

The national accounts figures for the reference period are published several times. Regular revisions depend on the availability of data sources. The timetable for revising the annual accounts is shown inTable 1.1 below.

The first annual GDP estimates based on quarterly data is currently published 70 days after the end of year with the publication of the fourth quarter for the previous year. The second release of GDP estimates is made 9 months after the end of year, when also the regular annual revision of last three years are published. The semi-final GDP estimates are published 21 months after the reference period based on the yearly reports of enterprises and public institutions. Final GDP data are derived from the supply and use tables 36 months after the reference period.

Table 1.1Current publication cycle

Annual accounts / Number of days/months after the end of reference year
First provisional GDP estimates based on quarterly data / T + 70 days
Second provisional GDP estimates based on quarterly and detailed data for the previous year / T + 9 months
Semi-final GDP estimates based on annual data / T + 21 months
Final version GDP estimates derived from SUT / T + 36 months

In 2015, Statistics Estonia and Eesti Pank harmonised and implemented the principles for revising official statistics on the domains ofthe external sector statistics and the sub-accounts of the national accounts (GDP, government finance statistics, the quarterly and annual non-financial and financial accounts). New harmonised revision policyis in line with the principles of the revision policy recommended by the European Commission and the European Central Bank[2].

Since the last version of GNI Inventory from 2008, several revisions of national accounts data were carried out by SE. Information on the revisions are available on SE website under heading “National Accounts”[3].

The outline of these revisions are listed in the table below.

Table 1.2Revisions carried out by the SE

Year / Main changes / Period
2009 / -Update of the estimates of actual and imputed rent
-Reclassification of some units from non-financial corporations sector to general government sector / 1995 onwards
2011 / -Introduction of new classification of economic activities NACE Rev. 2 / 2000 onwards
2012 / -Introduction of new classification of economic activities NACE Rev. 2 / 1995 onwards
2014 / -Introduction of results of Population and Housing Census 2011
- Introduction of ESA 2010 methodology
-The changes in the CFC calculations
-Specific reservations (CFC calculations for roads and bridges; GFCF calculations of entertainment, literary and artistic originals; recording the vehicle registration tax according to ESA 95 as a tax on products)
-Additional data sources for FISIM estimates
-Clarification of calculations of net taxes on products / 1995/2000 onwards
2015 / -Reclassification of some units from non-financial corporations sector to general government sector
-Introducing ESA 2010 methodology for the years 1995-1999 / From 1995/1998 onwards

Information on major revisions due to the transition from ESA 1995 to ESA 2010 are described in detail in section 2.2.

1.3.Outline of the production approach

Production approach is the main method for compiling GDP in Estonia. The estimates of GDP at basic prices are made by economic activities broken down by institutional sectors and by type of producers. GDP at market prices is derived from GDP at basic prices by adding taxes on products, and subtracting subsidies on products. The final estimates of GDP by production approach are derived from the balanced supply and use tables. More details on the production approach method can be found in Chapter 3.

Table 1.3GDP by production approach, 2010

(million EEK)

Components / Value / % of GDP
Output at basic prices / 459412,3 / 119,5
Intermediate consumption at purchasers’ prices (–) / 257972,6 / 112,0
Gross value added at basic prices / 201439,7 / 87,5
Taxes on products / 30274,8 / 13,1
Subsidies on products (–) / 1450,8 / 0,6
GDP at market prices / 230263,7 / 100,0

1.3.1.Reference framework

1.3.1.1.Register data

For the production of economic statistics, the Business Register for Statistical Purposes is used. The Estonian Statistical Business Register (SBR) was established in 1994. In the creation of the register, the statements of EU legislation, especially those of the Business Register Regulation No 177/2008 were taken into account. The SBR includes all economic units which operate in Estonia: enterprises, sole proprietors, non-profit associations, foundations, central and local government institutions, except households and the embassies of foreign countries.