SNA Reconciliation

One great feature with the system of national accounts compared with other sources of (economic) statistics is not the accuracy or the details, but the fact that it is the only statistical system that gives a comprehensive picture of the total economy.

Other statistical sources might give a more detailed picture of parts of the economy, even though national accounts can be compiled at a rather detailed level. However, SNA is the only source of statistics where concepts and definitions used are common for all statistical units.

Since national accounts statistics are compiled using several statistical sources, it is hardly the case that all of these sources fit perfectly together, and only has to be added up to form aggregates like total output and consumption (at current prices).

The sequence of accounts is based on a set of internally consistent accounts for each individual institutional (sub-)sector. Total output and total value added can then, in principle, be derived as the sum over all sectors, import and export are given in the BOP etc. However, to derive a set of accounts which are external consistent the accounts has to be reconciled, so that total output matches total use, total interest paid equals total interest received, etc.

Reconciliation is done based on the reliability of the source statistics. Statistics for the government sector and the financial sector are in most countries based on accounts for all units included. Statistics for the non-financial corporations and the households, however, are based on surveys, and are therefor more likely to be adjusted in the process of reconciliation Accounts for the rest of the world, based on (identical with) the Balance of Payments are also believed to be a reliable source of statistics, and not a candidate for adjustments.

Furthermore, in many cases, only one source of information will be available, e.g., taxes on income and wealth paid by households will usually only be available in government statistics.

As mentioned above, both the supply- and the use table will be reconciled to make sure that total supply of each product at purchasers prices matches total use of the same product at purchasers prices. Frequently, compilers will have to relay on one source only, due to lack of detailed data. The ‘commodity flow method’ is then used, in order to 'match' supply and use at a rather detailed level. In general, statisticians seem to have better information about supply at a detailed level - intermediate and final consumption as well as capital formation are in most cases reported on a more aggregated level.

Reconciling national accounts using supply-use tables ensures that GDP from the production side equals GDP form the expenditure side. This is one of the major advantages of making supply and use tables an integrated part of the accounts.