MEFMI On-Line Course Covers Knowledge Gap in Quarterly GDP & Economic Activity Indicators

In the MEFMI region, the non-observed economy constitutes a large proportion of economic activity but data from the sector is hardly captured comprehensively. This negatively affects the robustness of national accounts data. Furthermore, many policy institutions have no scientific mechanism for estimating GDP in the interim before actual data is released by statistical offices, which usually provide the data with a considerable time lag.

To cover the knowledge gap in this area, MEFMI held an online course entitled Introduction to Quarterly GDP, Economic Activity Indicators and Unobserved Economy.  The course ran from 4 June to 6 July 2018 for middle to senior level officials involved in the compilation and analysis of National Accounts, policy formulation, analysis and decision making from Central Banks, Ministries of Finance and Planning, Statistic Offices.

Even where statistical offices meet the 90 days’ international standards of producing and releasing quarterly national accounts, policy institutions like central banks and ministries of finance, which have forward looking mandates with regard to monetary policy and the macro-fiscal framework, need early estimates for the current year. Annual National Accounts (ANA) are less suitable than Quarterly National Accounts (QNA) for business cycle analyses.  This is because annual data mask short-term economic developments. In-year economic developments are not shown in the ANA. In addition, developments that started in one year and end in the next may not show up in the ANA. ANA are also less useful in times of high inflation, when QNA are virtually indispensable, for two reasons.

The main purpose of QNA is to provide a comprehensive and consistent set of statistics that allows economists and other analysts to undertake detailed assessments of the recent performance of the economy in terms of production, final expenditures and income. Time series of QNA statistics support the development of forecasts using econometric models, business cycle analysis, and other economic analyses such as measuring the lags in the effects induced by economic shocks and studying the dynamics of various aspects of the economy. QNA constitutes a system of integrated quarterly time series coordinated through an accounting framework. The QNA play a central role in assessing the performance of the economy in the recent past and provide the basis for forecasting the economy’s future performance. The emphasis is on measuring quarterly changes, and so seasonally adjusted estimates and volume estimates, where applicable, take prominence. 

The objective of the course was to introduce a framework for early indicators of GDP using a set of high frequency indicators, indices of perception and non-survey methods. The course also aimed to introduce a standardised method for measuring non-observed economic activities, forecasting of GDP and quarterly GDP.

The total number of enrolled participants was 61, drawn from Central Government Ministries, Departments and Statistical Agencies, as well as Central Banks of the MEFMI member states. The completion rate of the course was 74 percent.

The Resource team was made up of Mr. Senei Molapo (MEFMI Programme Manager, Macroeconomic Management Programme) and Ms. Lerato Makana (Independent Consultant and a Chief Statistician (National Accounts and Enterprise Surveys, Bureau of Statistics Lesotho), Mr. Thebeitsile Nkhutelang, Independent Consultant and Former Statistician from Statistics Botswana and Dr. Eliza Mónica Ana Magaua, Consultant and Director of National Accounts and global Indicators, Mozambique.

The course had five (5) modules and each module last for a week. The participants were issued with course handouts and also exposed to selected reading materials, categorised as main and auxiliary, prior to engagement in topical discussions and quizzes. Mentoring was done on a daily basis, inclusive of weekends since most participants became more active during the weekends.

The course managed to improve capacity and knowledge on timely monitoring of the economy by policy makers, pending release of regular statistics, economic analysis, forecasts and coverage of QGDP.
All participants in general rated the course very high and pointed out that they will be able to present the official statistics, evaluate GDP and included all what is required.  They rated the mentors and the resource team very high and commended their ability to respond to questions and provided solutions quickly.

The Course came at an opportune time for the MEFMI region since QGDP is an international topical subject at the moment. It provided more information on what was lacking in member countries’ QGDP compilation procedures by itemising issues from those that are necessary to those that they can do later. The participants appreciated the proceedings and highlighted the need for an intermediate course.