Directorate of Surveys National Accounts Coordination

1. Directorateof Surveys National Accounts Coordination The backcasting of Brazil’s National Accounts 2010 Reference year Roberto Olinto Ramos Director of Surveys / Head of National Accounts Ricardo Montes de Moraes Head of Methods/National Accounts Coordination

2. Backcasted SUTs • Objective: to adjust Brazil’s National Accounts series to changes in classification (ISIC 4) and definitions (SNA 2008). • Overview: The backcasting process uses, as its main sources, the existing SUTs – adjusted for classification changes and aggregated to 56 activities and 110 products. • From these tables, volume and price changes are calculated and applied to 2010 totals, backcasting them. • Backcasting Integrated Accounts

3. Backcasted SUTs • Specific adjustments are made in order to keep coherence with total government tax and contribution revenue. • Transport and trade margins are adjusted for the new supply and uses of trade and cargo transport. • SUTs’ equilibrium is obtained through balancing items, adjusting the final uses and gross operating surpluses to the new supply data. • For public administration activities, the process is made “bottom up”, backcasting gross operating surpluses and calculating production by adding backcasted salaries, contributions, surpluses and intermediate consumption.

4. Backcasted SUTs • SUTs will be backcasted from 2009 to 2000. • For the 1999 – 1995 period only the value added, final uses, imports and taxes on products will be backcasted (with 12 aggregated economic activities). • Annual data will be backcasted. Quarterly data will be then adjusted to the new annual series with a benchmarking method (Denton).

5. Activities and products treated apart • In the classification adjustment to the ISIC 4, data from 4 activities and 5 products associated to them will be extracted from the SUTs to be treated apart. • These activities and products underwent significant changes of classification or treatment in the SNA and their backcasting will use indexes compatible with the ones used in their annual estimation from 2010 on.

6. Activities and products treated apart • The four activities are: • Books, newspapers and magazines’ editing – With the new ISIC classification, books, newspapers and magazines became products of the Editing activity (a service) and not graphic products (industrial ones) as in the previous ISIC. • Machinery and equipment repairs and maintenance – In ISIC 3, these services were part of machinery and equipment production activities. In ISIC 4, they became a specific activity in the industrial sector. • Research and development – Classified as gross fixed capital formation in SNA 2008, Research and development was recalculated for the entire 2000-2009 series, in a partnership project with the Science, technology and innovation ministry. • Software licensing and development – Also classified as gross fixed capital formation, the activity is estimated with more detail for the new series.

7. SUTs’ balance • Differences between backcasted supply and use, by product, will be distributed according to their types of use (and to the extent of the difference). • For the products with differences to be adjusted in the intermediary consumption, this difference will be distributed proportionately between the economic activities that use the product. • Later, analysts responsible for each activity will verify the consistency of this distribution and propose alternatives if it leads to distortions on the value added.

8. SUTs’ balance • The value added will be obtained as a balancing item. • From each activity’s value added, backcasted salaries, social contributions and taxes will be subtracted, leading to a sum of gross operating surplus and mixed income.

9. Backcasting Integrated Accounts • Easier! just current values • Backcasted SUT: main data source • Reclassification of operations • Re-balance of interest or dividends tables (who – who) • Balance the new Integrated Account

10. Thank you! roberto.olinto@ibge.gov.br