COMPILATION OF GDP BY INCOME APPROACH & ACCOUNTS FOR HOUSEHOLD SECTOR

1. COMPILATION OF GDP BY INCOME APPROACH & ACCOUNTS FOR HOUSEHOLD SECTOR Department of Statistics, Malaysia March 2012

2. CONTENTS • Introduction • GDP Income Approach By Institutional Sector • Data sources • Methodology • Institutional sectors in Malaysia • Sequence of the accounts

3. INTRODUCTION • GDP by Income approach • By Institutional sector and kind of economic activity • By Institutional Sector: • Can be seen through the compilation of Distribution and use of Income Accounts and Capital Accounts. • Based on Sequence of Account in current prices at annual basis • By Kind of economic activity • To complement the production and expenditure approach • To see the distribution of value added by various economic activity • At annual basis in current prices

4. GDP INCOME APPROACH BY INSTITUTIONAL SECTOR Statistics compiled by Central Bank on CB, FC, MB, leasing & factoring Annual surveys by DOSM eg. EC BOP statistics from DOSM DATA SOURCES Annual reports from govt. agencies Annual reports from individual companies Insurance reports by Central Bank

5. METHODOLOGY • The compilation is based on the concepts and methodology outlined in the United Nations publication entitled `System of National Accounts 1993’ (SNA 1993). • compilation presents the sequence of accounts from production account to capital account. • These accounts show how : • production gives rise to income • income is distributed & redistributed • income is used for consumption or • saved • saving is translated into fixed capital • formation and net borrowing or lending

6. INSTITUTIONAL SECTORS IN MALAYSIA

7. SEQUENCE OF THE ACCOUNTS Production account Generation of income account Allocation of primary income account Secondary distribution of income account Redistribution income in kind account Use of disposable income account Use of adjusted disposable income account Capital account

8. COMPILATION FRAMEWORK

9. CAPITAL ACCOUNT • Capital account shows saving as a source of funding for capital formation • 4 categories of changes in assets are distinguished in the capital account: - gross fixed capital formation - changes in inventories - acquisition less disposal of valuables - acquisition less disposal of non-produced non- financial assets

10. PRODUCTION ACCOUNT • first account in the sequence of accounts • records the activity of producing goods and services • calculates gross value added by subtracting intermediate consumption measured at purchaser’s prices from output measured at basic prices

11. PRIMARY DISTRIBUTION OF INCOME ACCOUNT • Consists of two consecutive accounts: - generation of income account - allocation of primary income account • Compensation of employees includes the remuneration, in cash or in kind, payable by an enterprise to an employee in return for work done during the accounting period

12. SECONDARY DISTRIBUTION OF INCOME ACCOUNT • Consists of two consecutive accounts: - secondary distribution of income account - redistribution of income in kind account • 3 main kinds of current transfers are: - current taxes on income, wealth, etc - social contributions and benefits - other current transfers

13. USE OF INCOME ACCOUNT • There two version of the use of income accounts: - use of disposable income account - use of adjusted disposable income account • Transactions on final consumption of goods and services for which a sector is the ultimate bearer of the expense even though it is not the sector to which the goods and services are delivered. 3 types of final consumption expenditure: - household final consumption expenditure - final consumption expenditure of NPISHs - government final consumption expenditure

14. Thank you…