Overview of quarterly gross
domestic product
Expert Group Meeting on Short-Term Economic Statistics
in Western Asia
16-18 February 2016
Amman, Jordan
United Nations Statistics Division
Outline of presentation
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What is quarterly gross domestic product
(QGDP)?
Key features of QGDP
Scope of QGDP
Timeliness of QGDP
Uses of QGDP
Overview of data sources
Reconciliation of QGDP
Setting up QGDP
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What is QGDP?
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QGDP constitutes a system of integrated quarterly time
series measuring the unduplicated value of production
within an economic territory coordinated through an
accounting framework
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Accounting framework could be based on the 1993 or
2008 SNA
QGDP follows the same principles, concepts, definitions
and structure as the annual GDP (AGDP)
QGDP can be compiled using the three approaches
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Production
Expenditure
Income
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Key features of QGDP
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Presents the short-term movements of the economy,
providing a coherent measure of such movements
within the methodological framework of national
accounts
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In contrast with AGDP, QGDP focuses on growth rates and
their temporal characteristics such as acceleration,
deceleration or changes in sign
Has same standard classification as in AGDP, albeit at a
higher level of aggregation
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AGDP are available at much more disaggregated levels to
provide information on structural details about the
economy
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Key features of QGDP
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Is available in non-seasonally and seasonally-adjusted
forms due to variations in the intensity of economic
activity within a year
Has to be reconciled to AGDP estimates
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Annual estimates and the sum of the corresponding
quarterly estimates should be equal which implies the
possible need for benchmarking
Undergoes more substantial and frequent revisions than
for AGDPA due to characteristics of data sources and
compilation methods
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Scope of QGDP
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In principle, QGDP can cover the same breakdown as
and structure as AGDP
Scope will usually evolve over time
Countries can consider compiling the following QGDP to
fulfil the minimum dataset requirement for the scope of
the implementation of the 2008 SNA
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Nominal and volume measure of QGDP by industry or by
expenditure components
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Scope of QGDP
Scope of implementation of 2008 SNA
Minimum requirement indicates an adequate scope of implementation of the 2008 SNA, when relevant. Recommended:
recommended for compilation by all countries
Desirable: Useful statistics that should be compiled, if possible
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Timeliness of QGDP
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Flash QGDP estimates
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To be released within one month after the end of the
reference quarter
In some instances, estimates of all approaches to
compiling QGDP may not be available
Actual QGDP estimates
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Have more detailed expenditure, production and income
data than flash QGDP estimates
To be released within three months after the end of the
reference quarter
Estimates of prior quarters may be revised as well
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Uses of QGDP
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Provides a picture of current economic developments
that is
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More timely than that provided by AGDP
More comprehensive than that provided by individual
short-term statistics through the use of an integrated
framework
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Uses of QGDP
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Supports policy needs and monitoring by
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Providing early warning on occurrence and timing of
economic upturns and downturns
Measuring short-term impact of internal and external
shocks on production and consumption
Supporting formulation of national budgets
Ensuring prompt and effective fiscal and monetary
policy response
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Uses of QGDP
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Allows analysis of dynamic relationships between
macroeconomic aggregates by providing time series
of quarterly data in a coherent accounting
framework
Provides basic data for business cycle analysis and
economic modelling
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Uses of QGDP
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Has a role to play for accounting under high inflation
and where annual source data are based on varying
fiscal years
Provides a coordinating conceptual framework for
design and collection of economic source statistics
Provides a framework to identify major gaps in the
range of short-term statistics
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Overview of data sources
General issues
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Compared to AGDP, QGDP data sources are
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More limited in detail and coverage
Expected to be more timely
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Could affect data availability and increase data collection
costs
QGDP compilation may rely on indicators that best
capture movements in the target variable
Basic principle – obtain indicators that best reflect
the economic activity being measured
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Overview of data sources
Indicators
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Indicators can be
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Value indicators
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Imports of consumption goods
Domestic production of consumption goods
Government accounting data
Supply of building materials
Registration and licensing of transport equipment
Volume indicators
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Index of industrial production
Retail sales index
Number of hours worked
Building permits
Physical quantities of some goods, for example,
agriculture
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Overview of data sources
Choice of a suitable indicator
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Assumption – indicator is able to reflect changes in
target variable
Review indicators regularly to take into changes in
economic conditions
Chosen indicator may be a
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Primary item of a data collection system
By-product of the system
Assess qualitatively the suitability of an indicator by
examining the similarities and differences with the
target variable
Assess quantitatively the suitability of an indicator
by comparing the rates of change in the annual sum
of the quarterly indicator with the growth rates of
the corresponding annual GDP growth
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Overview of data sources
Surveys of businesses
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May be limited to large enterprises and establishments
in some major activities
Survey frame may be outdated because of delays in
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Including new businesses
Removal of non-operating businesses
Reclassifying businesses that change economic activity
Problem of survey non-response may be more acute
for quarterly surveys
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Overview of data sources
Surveys of households
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May provide good coverage of own-account
production of goods, purchases from informal sector
activity and purchases of services
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May be useful in developing countries in preference to
business surveys
Reporting quality and omissions of sensitive items
may be a problem
Errors may be caused by recall of purchases
Purchases of consumer durables may be allocated to
the incorrect quarter
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Overview of data sources
Administrative data
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Are relatively cheaper to obtain compared to survey
data
May be more timely
May be more widely used in compiling QGDP than
AGDP
May have limitations in terms of consistency of
definitions, coverage, scope, timing differences, etc.
Examples
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Value added tax data
Merchandise trade statistics
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Overview of data sources
Other data sources
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Consult industry associations, industry experts or
leading enterprises in a particular industry in
deriving quarterly indicators if survey or
administrative data are not available or inadequate
If no quarterly indicators are available, consider
using the following
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A related item as an indicator
A range of other items as an indicator
The overall economy (excluding the target
components) as an indicator
Mathematical methods based on distribution of annual
data and extrapolation of past annual trends
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Overview of data sources
Other data sources
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Use of these alternative sources should be
temporary
Data gaps should be closed as soon as is feasible
using more conventional data sources
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Reconciliation of QGDP
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In principle, QGDP based on the three approaches should
be equal
In practice, discrepancies occur due to the use of different
data sources
Methods that can be used to reconcile the estimates
include
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Eyeball testing
Logical checks
Plausibility checks
Balancing using a quarterly supply-use model
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Setting up QGDP
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Setting up a system to compile QGDP is typically not an
easy task and some key steps are needed to ensure the
project runs smoothly
Consult potential stakeholders concerning
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Possible uses
Required scope, detail, timing of release…
Take inventory of
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Annual compilation methods
Available quarterly and annual source data
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Setting up QGDP
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Design compilation methods and procedures
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Consider relationship to sources and methods used in AGDP
Decide scope of QGDP
Determine compilation level
Choose integrated or separate AGDP-QGDP compilation
system
Make compilation schedule including timeliness of first
release and revision policy
Review quality of source data and compilation procedures
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Study correlation between annual and quarterly source data
Study revisions to main aggregates
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Setting up QGDP
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Generate time series of QGDP for past years
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Perform real-time tests and update current year QGDP
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Benchmark to AGDP
Link monthly and quarterly source data for current quarters
with estimates for back series through, say, extrapolation
Release first estimates
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Thank you
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