1350.0 - Australian Economic Indicators, 1993
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 31/10/1993
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Feature Article - The Timeliness of Quarterly Income and Expenditure Accounts: An International Comparison
Graph 1. AVERAGE RELEASE LAG FOR FIRST ESTIMATES, 1992 The conclusions here, and in the rest of the paper, pertain to income and expenditure based estimates of GDP only. Other components of the System of National Accounts such as the financial flows are ignored. Some countries have more timely estimates of GDP which are based on the measurement of output by industry. These latter measures are not considered in this paper. The release lags associated with the subsequent revised estimates also vary considerably by country. Once again, the United States stands out as a unique case, having released its second estimates about two months after the reference quarter and its third set of estimates one month after that. The United States is the only country with twelve, rather than four releases of its quarterly national accounts each year. The Netherlands also stands apart from other countries, with eight quarterly releases annually, its second estimates coming out 119 days after the reference quarter. Most countries released their second set of estimates, on average, between 145 and 190 days after the reference quarter. Germany, New Zealand and Sweden differ somewhat, with average release lags of 204, 216 and 210 days respectively for their second estimates, and Austria and Switzerland had the longest such lags at 248 and 289 days. The lags applying to the third, fourth and fifth estimates, which are also shown in Table 3, differ even more widely and are best considered within the context of general revision policies, in the next section. REVISION POLICIES There are many commonalities to the revision policies of the fifteen countries included in the survey. Most impose fairly strict limitations on when and how frequently revisions are permitted, although two, Australia and New Zealand, have almost no restrictions. Most close their accounts after three or four years, allowing no further revisions thereafter except on special, infrequent occasions when historical revisions are carried out. The general pattern in the majority of countries is that the estimates for a particular quarter are open for revision when those for each of the other quarters in that same reference year are first released, and then annually thereafter for a period varying from two to four years. Countries following this general pattern most closely include Canada, Denmark, Finland, Japan, Norway and Sweden.(Endnote 5) The following paragraphs describe the specific policies of each country, which the reader can also see illustrated for the year 1991 in Table 2. Canada's revision policy is quite strict. Revisions are permitted for all quarters during the same calendar year. Thereafter, the accounts are open for revision only once per year, at the time of the release of the first quarter estimates in mid-June. They are open for four such annual revisions, after which time they are considered final and are not normally reopened except for historical revisions which typically occur about once per decade. The estimates at constant prices are converted to a new base period at intervals of roughly five years and this transformation is normally accomplished by chain linking, within the usual revision schedule. In Australia there are few limitations on revisions. The annual revisions are generally most significant at the time of the release of the fourth quarter accounts in March and currently can go back as far as financial year 1985-86. At the time the second quarter estimates are released, annual revisions are normally, although not exclusively, limited to the previous four financial years. The annual revisions at the time when the first and third quarter estimates are released are normally limited to the latest complete financial year. The quarterly estimates are revised in tandem with the annual estimates and, in addition, are open to other revisions each quarter for up to three years. In New Zealand there are no limitations on revisions, in part because the Department of Statistics has been releasing quarterly national accounts estimates for just a few years. The United Kingdom revision policy is unique in that it always permits revisions to the quarters of the previous year as well as those of the current year. Annual revisions normally occur in September, when the second quarter estimates and the annual national accounts "Blue Book" are released, and cover the previous four years. At the time of the other three quarterly releases, normally in June, December and March, revisions are allowed in all quarters within the current and previous years, the "current" year being defined as the one in which the most recent Blue Book was published. In the United States the first estimates, qualified as "advance", are released near the end of the first month after the end of the quarter. The second and third estimates, qualified as "preliminary" and "final", are released near the end of the second and third months respectively. Ordinarily, annual revisions are carried out each July and cover the preceding three years. Comprehensive historical revisions are carried out at about five-year intervals. The revision dates reported by the United States for the 1991 estimates were not fully typical, for two reasons:
In Germany the quarterly estimates are open for revision in March, when the fourth quarter estimates are released, and annually thereafter in August or September, at the time of release of the second quarter estimates. They are open for three such annual revisions, after which time they are considered final and are not normally reopened except for historical revisions, which typically occur every 5 to 10 years. In Japan the estimates for each quarter are open for revision when those for the subsequent quarter are released. Thereafter, the quarterly estimates are open for revision annually at the time of release of the third quarter estimates. They are open for two such annual revisions, after which time they are considered final and are not normally reopened except for historical revisions, which typically occur every 5 to 10 years. In Denmark the accounts are normally open for revision in the following two quarters. Thereafter, they are normally open for revision only once a year, in January, following the compilation of the annual accounts in October. The estimates are open for three such annual revisions, after which time they are considered final. In Finland the accounts are open for revision for all quarters during the same calendar year. Thereafter, they are open for revision twice per year, at the time of the release of the first and third quarter estimates. They are open for two years of such revisions, after which time they are considered final and are not normally reopened except in connection with changes in the base year which occur about once every five years. In Norway the accounts are open for revision for all quarters during the same calendar year. Thereafter, they are open for revision only once during the year, in May, following the release of revised annual estimates. They are open for three such annual revisions, plus two more annual revisions after that which are attributable to the method used for adjusting the quarterly estimates to annual bench-mark totals. In Sweden the accounts are open for revision for all quarters during the same calendar year. Thereafter, they are open for revision only once during the year, at the time of the release of the annual national accounts in October or November. They are open for two such annual revisions, after which time they are considered final and are not normally reopened except for historical revisions, which typically occur every 5 to 10 years. In Italy, the revision policy is somewhat analogous to that of the United Kingdom in that, for the first three quarters, it allows revisions to the current year as well as the two previous years, provided the annual totals for those two years remain unchanged. At the time of the first quarter in April, just after the release of the annual revisions normally covering the past three years at the end of March, the quarterly estimates are open for revision for a period equal to n + 2 where n is the number of years for which the annual revisions were just carried. In 1991, the adoption of a new base year for the constant price estimates starting in 1970 has caused some delay in the release of the quarterly estimates which normally occurs three months after the end of the reference period. The Swiss approach to revisions is unusual in that it draws a distinction between the original, unadjusted estimates and the seasonally adjusted estimates. -Annual revisions to the quarterly GDP estimates normally occur in late November or early December, when the third quarter estimates are released, and cover the previous two years. At the time of the other three quarterly releases the original estimates, without seasonal adjustment, are not open for revision. The seasonally adjusted quarterly estimates are fully open for revision in all quarterly releases. In Austria, the estimates for the first three quarters are first revised with the release of the fourth quarter. All quarters are open for revision annually thereafter in June or July for three years. Comprehensive historical revisions are carried out at about ten year intervals. In the Netherlands, a preliminary estimate of GDP growth is released about two months after the reference quarter. Revised, fully-based results (expenditure, production and income) come out about two months after that. When the fully-based results for the fourth quarter come out around the end of April the other quarters of the same year are also open for revision. The annual accounts are revised in August each year, for the previous three years, and the quarterly estimates are adjusted to the new annual levels with the release of the fully-based second quarter estimates. CONCLUSION Countries have different approaches with respect to timeliness and revision of the national income and expenditure accounts. In part, this is due to varying attitudes about the trade-off between timeliness and reliability, with some countries, such as the United States, putting a high premium on timeliness of the initial estimates and others, such as New Zealand, putting greater emphasis on their precision. The degree of experience with quarterly national accounting may be another factor accounting for the variance in release timing and revision policies. The most common pattern is for countries to release their preliminary income and expenditure accounts estimates a little more than two months after the reference quarter, to revise these as the estimates for subsequent quarters of that calendar year are released, and to continue revising them on an annual basis for two to four years thereafter. ENDNOTES
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