The national income accounts is the most significant part of the national accounting system . This accounts constitute the most important economic indicator upon which development plans and programmes are based and which show the level of economic growth and the amount of income created out of economic activities.
The national income accounts which have been used to measure the effects and success degree of economıc policy and to confırm and to follow changes in the structure of the national economy have been reached this level in the end of the long-time studies.The basis of this studies depend on the calculation of total income in an economy. History of national income account,its basic concepts and the estimation methods are explained in this section.
HISTORY OF NATIONAL INCOME ACCOUNTSThe first attempts of estımating national income initiated in England and France in 17th. century. Pierre Boisgilleber in france , William Petty in England interested in this subject. The first national income estimation was prepared by William Pety for England in 1665. Pety assumed that the annual income was equivalent to annual consumption. Following years, these attempts were followed by so many individual estimations in England.
In 1843, George Tucker prepared the first national income estimation of America. In that century, so many European countries prepared official estimation and in 1890's the first annual official data was published in Avustralia.
In 20 century , the concepts of production , investment , saving , and consumption gained importance because of war expenditure, and the statistical data collected in the same period constituted the database for national income estimation. Simon Kuznets in America, Colin Clark in England studied on production, market and national income.
Following the Great Depression of 1929, Lord J. M. Keynes attempted to put into new direction to macroeconomic studies, the importance of national accounting system increased.
The compresensive studies on national income have been initiated after the 2. World War , and in 1944, United States of America , United Kingdom and Canada associated to determine common definitions for national accounts. The attempts of international standardization was initiated in 1949 and in 1952 A Standardization System of National Accounts (SNA) was published .United Nations rearranged the SNA in 1968 and in 1992, SNA has also been revised as an provisional and was published.
The national accounts in Turkey are carried out on the recommendation of SNA.
The first attempts to estimate national income in Turkey initiated in 1928. In 1929, Camille Jacquart was put in the charge of preparation of national income estimates, however, due to difficulties of compling data attempts in this direction did not prove satisfactory results.
In 1935, the task was mada by the joint responsibility of German statisticians Dr. Franz Eppeinstein and the Ministry of the Economy. As a result of their studies, national income estimations for 1927, 1933 and 1934 and later for 1935 and 1936 were prepared and published. In 1947, General Directorate of Statistics prepared and published national income series for 1942,1943 and 1944.
So many individual estimations followed these attempts. These were estimations which were prepared by Şefik Bilkur for 1943, Şefik İnan for 1949 and by Vedat Eldem for 1929 and 1945.
The national accounts studies did not carried out regularly up to 1950 due to absence of special division related this subject. In that date National Income Study Group was constituted and the said group began ıts'studies in 1951.
The national income estimation of 1938,and 1948-51periods have been produced by the presidency of National Income Study Group. These estimations were reviewed in acordance with Milton Gilbert recommendation , inaddition , 1952-1953 estimations were prepared.
The following years, these studies carried on and national income estimations gained greater significance especially with the planned development period.
In 1960, State Planning Organization has been constituted and this organization produced separate national income series in the period of 1961-1971.In the second half of 1971, experts from SIS and SPO constituted Study Group in order to eliminate the disadvatage s of the separate national income series in a country and abroad and to provide more reliable sources and to use newly improved methodology. This group reorganized national income accounts methodology at current and constant prices and prepared a new national income series for the period of 1962-1971. The studies and calculations made by this group were discussed in detail in National Income Kollokyum organized by SIS in 1972 January and June. The attempts of solving problems created by two separate official series were successful depend on the methodology which was took last shape in 1971 in the light of these discussion . In the period of 1948-1972 the unique national income series have been produced and published.
GNP has been prepared four times a year to indicate annual growth by the three months period from 1980.However, due to difficulties in the computations GNP estimation at 1968 constant prices and current producers prices were prepared three times a year since 1985. The first result of GNP estimation based on the firts six months data, the second one based on the nine months data and the third one based on the twelve months data have been presented to use.
Since 1990, GNP started to be calculated quarterly in order to follow structural changes in the economy a shorter intervals , and quarterly GNP series have been constituted from1987. In addition , the base year has been shifted from 1968 to1987 to update GNP accounts.The content of quarterly GNP accounts has been extended and some items and economic sub-sectors that could not be included in previous annual GNP accounts were also incorporated in to system.
The new series have been constituted according to modern and extensive defination recommended by UN.
CONCEPT OF NATIONAL INCOMEThe national income is the total money value of all the factor incomes created in the production of goods and services in a national economy during a given period of time. In other words ; it is the net product created by a national economy in a given period.. National income determines the real flow of goods and services. This flow can be expressed only in value terms.
Several aggregates can be identified in the measurement of national income:Gross National Product is a value which is equal to the sum of production values of all the goods and services produced by real persons and legal entity and public institutions in a national economy in a given period of time, minus the total inputs which are used in the production of these goods and services.
2-Net National ProductNet National Product is the value obtained by deducting from the GNP the amortization corresponding to the depreciation due to ageing and depletion of constant capital goods utilized in the production.
Net National Product = GNP - Amortization
3-National Income or Net National Product at Factor CostBoth Gross National Product and Net National Product are aggregates which are measured by market prices. However, market prices includes indirect taxes that do not have factor payment. National income , in other words; Net National Product at Factor Cost is the value obtained by deducting indirect taxes paid by all sector from the Net National Product and by adding subsidies granted by government to the producers as compensation of duty loss.
National Income = Net National Product at Factor Cost
National Income = Net National Product - Indirect Taxes + Subsidies
4-Personal IncomePersonal Income is a disposable income received by individuals before taxes . In other definition, personal income is the sum of income actually received by owners of production factors during the given period of time.
Personal income is obtained by deducting from national income the corporate tax, corporate retained earnings, and social security shares, and by adding transfer payments, interest paid for government debt, consumer interest s payments.
Personal Income = National Income - ( Corporate tax + Corporate Retained Earnings +Social Security Shares ) + Transfer Payments + Interest Payments
Personal income could be exceed national income when the transfer payments and interest payments increase.
5-Disposable IncomeDisposable income is a income that could be used freely by the individuals. The disposable income obtained by deducting from personal income indirect tax is the smallest national income aggregates. According to this defination , disposable income could be determined as the sum of all personal consumption and savings.
Total production power of economy , net economic success ,and level of average income and purchasing power of resident of the domestic territory are explained by respectively Gross National Product, Net National Product and National Income. For this reason , national income is used as a measurement unit of economic welfare.
ESTIMATION METHODS OF NATIONAL INCOMEGross National Product are calculated by utilizing production , income, or expenditure methods independently or in combination of two or all three. In general, accounting methods may vary depending on the sectors in the questions. In some sectors production approach , in other sector income approach could be used.
The Production Approach
The purpose of this approach is to measure the final production values of goods and services in kind of activity which are consist of units produced same goods and services in the economy . The gross production values of kind of activity is obtained by evaluated goods and services produced in the same kind of activity at market prices . This production value include the intermediate goods which are used in production process.
The estimation of national income by production approach, the production value of intermediate goods must be deduct from the total gross production value.
The Income ApproachIn this approach, factor income received by individuals due to production of current goods and services take into account. These are wages and salaries ( compensation of employees) , profits , rent, and interest. The sum of all factor incomes obtained in the economy give national income.
The Expenditure ApproachThe national income by using expenditure approach is obtained by summing all consumption expenditure and investment expenditure . Completed goods and services take into accounts in this total.
The most important problem in this method is double-counting possibilty. Because , some part of goods and services as a intermediate goods within the year . The other part of these goods and services directly use in consumption , investment , stock or export . These are called final use.
The content of final use is consist of goods which do not have any production process within the year, bought by final purchasers. Total value of final goods and services sold in economy is equal to the value of final use and this is equivalant to total gross value-added.
These three approach give the same results.
GROSS NATIONAL PRODUCT ACCOUNTS BY KIND OF ACTIVITYGross National Product by kind of activity is computed by current prices and constant prices. In 1990, the base year was changed from 1968 to 1987.The changing economic structure and the significance of the size of the sub-sectors not included in the estimation of national accounts was one of the main reasons for shifting the base year. An advantage in having 1987 as the base year was its use as the base for the new wholesale and consumer price indices.
The following provides a summary table of accounts by kind of activity in producers' value:
Kind of Economic Activity1-Agriculture A. Agriculture and Livestock Production B. Foresty C. FishingAGRICULTURE
2-Industry A. Mining and Quarrying B. Manufacturing C. Electricity
3-Construction
4-Trade A. Wholesale and Retail Trade B. Hotels, Restaurants Services
5-Transportation and Communication
6-Financial Institution
7-Ownership of Dwelling
8-Business and Personal Services
9-(less) Imputed Bank Service Charges
10-Sectoral Total (1-9)
11- Private Non-Profit Institutions
12-Government Services
13-Total (10+11+12)
14- Import Duties
15- GDP ( In Purchasers' value)
16-Net Factor Income From the Rest of the World A. Income Received B. (less) Income Paid
17- GNP ( In Purcahers'value)
The agricultural sector covers crop products,livestock and productss, and the forestry and fishing sectors.The value added in agriculture is grouped according to farming,livestock,fishing and forestry activities.
Data related to the sector are compiled from the agricultural statistics of SIS, the agricultural censuses, the 1984 Livestock Census, Input-Output tables, and current surveys.
1-CROPSThe data used to estimate annual crop production is mainly based on the crop reports of the provincial units of the Ministry of Agriculture and Rural Affairs.These reports are evaluated in cooperation with SIS.The Agricultural Products Estimate Committee, which consists of members from the Ministry of Agriculture and Rural Affairs, Ministry of Industry and Commerce, the SPO, General Directorate of Meteorology, General Directorate of Soil Products Office, Union of the Chambers of Trade and Industry, The Chambers of Agriculture and SIS, reviews the estimates given in the reports. The Committee convenes three times a year and finalizes the annual crop production estimate.
The quarterly estimates are based on the surveys of "Quarterly Production of Field Crops", "Quarterly Production of Fruits", and "Quarterly Production of Vegetables".Once the annual estimate is finalized, the quarterly estimates are revised.
The annual production quantity of alfafa, sainfoin, and cow vetches are complied from the Minisrty of Agriculture and Rural Affairs.These commodities are valued according to prices received by farmers.Pulses and cereal products, groundnuts, and soybeans products are multiplied by pre-determined coefficients to obtain straw production.The latter are included in crop production.Straw is also valued at prices received by farmers.
Data on flower production are complied from the respective cooperatives.
B) Crop Prices and ValuationThe production estimates of the Committee are pre-harvest figures.During or after the harvest there is some loss of output.SIS conducted a survey of agricultural products marketing covering the period of 1987-1988.Using the results of this survey some loss-ratios were estimated.In obtaining net production figures these ratios are employed.
SIS collects montly data on prices received by farmers and wholesale prices.The Ministry of Agricultural and Rural Affairs provides assistance in collecting prices received by farmers.Another recent source of agricultural prices was the marketing survey conducted within the framework of the 1990 Input-Output study.The prices obtained from the marketing survey were in general lower than the monthly prices.This is because the cost of transportation is included in the prices received by farmers and wholesale prices.The latter two are market prices.National income accounting requires that product prices are producers'prices.In other words, transportation costs should not be included in the prices.Therefore average transportation margins were calculated for each product group by comparing the above two prices with prices obtained from the marketing survey in 1990.Prices received by farmers and wholesale prices, whichever was used, were then multiplied by quantity produced to obtain production value in farming.The net production value created in the farming sector is obtained by multiplying the latter value with net production ratio found by deducting transportation margins.
C) Crops ExpenditureIn order to calculate crop gross national product through production values, production costs must be deducted from production values.These expenditures items are estimated as follows:
a) SeedsThe above-mentioned surveys and the Committee provide information on area sown and annual figures are used to revise quarterly estimates.Given the area sown, the technical ratios determine the amount of seed necessary per hectare of area sown.The quantity of seed thus obtained isconverted to value terms using current seed prices.
b) Chemical FertilizerThe quarterly fertilizer quantities used by the farmers and their values are obtained from the Ministry of Agriculture and Rural Affairs.
c) Natural FertilizersThe estimation of livestock products output provides an estimate of the amount of natural fertilizers used.This will be explained below.
d) Petroleum and Petroleum ProductsSIS collects data on the number of tractors, combines, and motorized pumps annually. The expert estimates of these vehicles' average petroleum use per year are available. The quantities are converted to a value by multiplying with current petroleum prices.The lubricating oil expenditures are calculated on the assumption that it is equal to 8 % of fuel and 10 % of gasoline expenditures.Tha annual estimates of petroleum and petroleum product expenditures were converted to quarterly estimates based on the experts opinions of the General Directorate of Rural Affairs.
e) Repair, Parts, and MaintenenceThe repair and maintanence expenditures for tractors and combines are calculated by multiplyıing the number of these vehicles with their annual average repair expenditures.General repair, parts, and maintenance expenditure values for tractors, combine harvesters, and other machinery and equipment were determined by a special study.This value is extrapolated from the whosale price index every year.In converting these expenditures to quarterly estimates, the same ratios as in petroleum products are used.
f) Expenditures on PesticidesData related to the value of pesticides and the area where pesticides are used are complied fromthe Ministry of Agriculture and Rural Affairs.
g) IrrigationData on irrigated areas and current water charge are obtained from the General Directorate of State Hydraulic Works.
h) Miscellaneous ExpenditureExpenditures other than those mentioned above are given collectively under the title "Miscellaneous".These expenditures have been calculated by deductşng the above-mentioned seven expenditure items from the total agrcultural input value.The latter was available from the 1990 Input-Output table.In distributing these expenditures to quarters the average of the above expenditures are used.
2-LIVESTOCKThis sector includes farm animals such as cattle,sheep, goats, etc.; poultry, sericulture; apiculture; and the products of these animals. For livestock production, calculations utilized the current number of livestock and production coefficients which were obtained from the results of the 1984 Livestock Census.
A) ProductionMeat production is estimated in two steps.First, by applying butchering rates to the number of livestock, the unit number of butchered livestock is obtained. Second, the latter is multiplied by carcass weights.
In distributing production figures to quarters, data from the Meat and Fish Products Inc. and "The Quantities and Values of Purchases For Production Surveys" were used.
b) Milk ProductionIn order to compute milk production, first the number of fecund animals is calculated by applying fecundity rate to the total number of livestock Then by applying birth rate to this number the number of animals milked is obtained.Total milk production is calculated by the product of the number of livestock milked and average milk productivity for each livestock type. For the quarterly calculation of milk production,the quarterly surveys covering the Milk Industry Institution and private milk processing establishments are used.
c) Wool, Hair and MohairWool production is calculated by multiplying the number of sheep with a wool yield coefficient; hair production is computed by multiplying the number of goats with a hair yield coefficient; and mohair production is computed by multiplying the number of mohair goat with a mohair production coefficient.these annually calculated production values are distributed among quarters in accordance with the opinions of the experts from the Faculty of Agriculture.
d) Raw HideFor raw hide production the number of animals has been multiplied with death rates to calculate the number of animals died.The number of dead animals is equal to the number of raw hides.Since sufficient information on the quarterly distribution is not available production has beeen distributed equally to all quarters.Moreover, hide production from the slaughters on the Sacrifice Day (Kurban Bayramı) have been included in the production calculations.The hide production from slaughtered is covered in the manufacturing industry.
e) Natural FertilizersAnnual fertilizer production has been calculated by multiplying the numberof animals with fertilizer yield per animal.It was accepted that of the total gertilizer production, some poriton was used in field, some portion was used as fuel, and some portion was wasted.the production value has been obtained by evaluating only the portions used as fuel and in the field.As there exists no information on the quarterly distribution, production has been distributed equally among quarters.
f) EggsThe number of eggs are taken from the Agricultural Statistics without modification.the quartely figures are estimated based on expert opinion.
g) White MeatCalculations are made by using the numbers of hen, rooster, and turkey taken from agricultural statistics.For the quarterly distribution of rooster and turkey production,expert opinions are used; for hen meat it is assumed equal in each quarter.
h) Honey, Beeswax, and Silk CocoonsAgricultural statistics provide the annual quantities of these products.The distribution into quarters is again based on expert opinion.
B) Livestock Product Prices and ValuationThe prices received by farmers compiled by the Ministry of Agriculture and Rural Affairs and SIS are used to value all animal products except meat.For meat, prices are obtained from meat and Fish Inc.
C) Livestock Expenditure in ProductionFor the expenditures of this sector, the input-output ratios from 1990 table were used for each period.
3- AGRICULTURAL CRAFTSAgriculture crafts covers products obtained through processing crop and livestock products by farmers.Cropproducts in the farming sector are processed in the third quarter.Since agricultural crafts for the livestock sector includes the products made from milk, quarterly distribution of these products was taken as quartely distribution of milk production.
4- FORESTRYThe data on the production quantity and prices are compiled from the Ministry of Forestry.The production of poplar, illegal production of firewood sapling, seeds, and secondary products have been incorporated intothe calculations.The value added in the sector is calculated using the 1990 Input-Output coefficients.
5- FISHINGThe sector consists of sea fishing, freshwater fish, other sea products and culture fishing sub-sectors.The main source of data is the Annual Fishery Products Survey.This survey provides data on the production of 57 types of sea fish 23 types of other sea products of economic value. An additional survey provides information on the quarterly distribution of these products.The average quarterly prices are obtained from the Ministry of Agriculture and Rural Affairs.The Ministry also provides data on freshwater fish and culture fishing production quantities and prices as well as quarterly distribution rates. The value added in the sector is calculated using the 1990 Input-Output coefficients.
INDUSTRYIndustry is defined to include mining and quarrying, manufacturing, electricity, gas, and water.
1-MINING AND QUARRYINGThe main source of data is Annual Mining and Quarrying Surveys.However the surveys do not cover sand, pebble, brick, tile soil, building stones, or fine gravel. The SPO estimates of the production values of these materials are used. SIS produces the Quarterly Production Index of Mining and Quarrying and collects quantity and value figures for the index. The quarterly figures are used to obtain quartely estimates. Once the annualsurvey results become available, the quarterly estimates are revised.
The annual surveys providethe estimates of value added for that year. The quarterly production quantity and values are used to obtain quarterly estimates. The initial estimates at current prices are calculated as the product of value added in the past period and the rate of increase in the production value. For constant price calculation the real value added on a commodity basis is extrapolated with the rate of increase in the production quantity.
2- MANUFACTURING INDUSTRYThe manufacturing sector value added is estimated for the following institutional sectors: public manufacturing, private large and small scale manufacturing, village manufacturing, and household manufacturing.
a) Public and Private ManufacturingSIS conducts an annual survey of manufacturing industry.The survey covers all public sector establishments and those private establishments with 10 or more employees. The survey is the main source of data for public and private large manufacturing.For small manufacturing, i.e., those with less than ten workers, the main sources of information are the Industrial Censuses conducted every five years. The Industrial Census covers all business establishments other than those in agriculture. Furthermore, it includes establishments of all sizes.
The value of inputs in the manufacturing sectoris calculated by subtracting the value of end-of-year stock (raw materials, supplementary materials, packing materials,and fuel) from the total value of goods and services purchased or transferred, electricity purchased, and the beginning of year stock (raw materials, supplementary materials, packing materials and fuel). The value of the output is calculated by subtracting the beginning of the year stock of finished and semi-finished goods from the totalreceipts from sales and services rendered to others, receipts from sales of electricity, the end-of-year stock of finished, and semi-finished goods, and the production value of the fixed assets produced by the establishment staff for own use. Value added is obtained by subtracting the value of input from output. In calculating the value added, commodities bought and sold without undergoing any changes are respectively deducted from input and output.Expenditures like communications and advertising are added to inputs.
The stock values of finished goods, semi-finished goods, and materials in the manufacturing industry surveys are the accounting records of establishments. The First-in, First-out (FIFO) method is adopted in determining the beginning of year and end-of-year stock values. Since the end-of-year prices are used in the calculation of stocks, holding gains are included in the value of output. This distorts the value added estimates considerably during high inflationary periods. In order to eliminate holding gains, output is recalculated by adjusting the value of the stocks of semi-finished and finished goods for price increases.
For the establishments with less than 10 workers,the value added is calculated in the same way bu uses the Industrial Census for the census years. For non-census years, this value is assumed to increase at the same rate as the value added in the establishments with 10-19 workers.
SIS started the Household Labour Force Surveys in 1988.A discrepancy was observed between the survey and the Industrial Census. In the latter, the number of people employed in small manufacturing establishments reported was considerably lower. The difference in the number of workers was multiplied with average per capita value added and the resulting value was added to the original estimate of value added in the small manufacturing.
b) Rural IndustryIn rural areas there are small scale manufacturing establishments that are not covered in the Industrial Censuses. In 1962, a special study on rural industry was conducted. Until 1990 the value added estimated from the 1961 was extrapolated from the manufacturing industry price index. Within the framework of the 1990 Input-Output study,another survey was conducted.The results of this latter survey is employed in the same way for the calculation of value-added.
c) Household ManufacturingThe 1988 Household Labor Force Survey showed that quite a number of hoseholds are engaged in household manufacturing. From the survey,the weekly average working hour is estimated.The value added is calculated by the product of the number of people engaged in household manufacturing, after being adjustedfor the working hours, with the average per capita value added in the small scale manufacturing.
d) Initial Estimates and Constant Price CalculationThe quarterly Industrial Production Surveys provide data on production quantities and values and form the basis for the Industrial Production Index. The survey covers manufacturing establishments with 10 or more workers.The initial estimates of GDPutilize data from these surveys.These estimates at current prices are calculated as the product of the value added in the past period and the rate of increase in the production value.For constant price calculation, the value added on a commodity basis is extrapolated with the rate of increase in the quantity index.When the results of the annual surveys become availabel the estimates are revised and quarterly estimates are adjusted.
For village industries and household manufacturing, the initialestimates of value added are obtained by extrapolating from the manufacturing price index.When the household survey results become available the estimates are revised.
For the manufacturing sector an implicit deflactor is calculated using the price increases and production weights for each sector.The current price and constant price growth rates of total manufacturing are calculated with this implicit deflator.
3- ELECTRICITY, GAS, WATERData related to this sub-sector are compiled from Turkish Electricity Authority; Kepez and Antalya environs electric power plants; Cukurova electric power plants, Ankara, Istanbul, Izmir municipalities; and thirty municipalities which are important producers of water.
The value added in electricity is calculated by using the income approach fromthe activity reports of the Turkish Electricity Authority. Special questionnaires are used for other electricity producing institutions. The value added in gas and water are calculated from the Annual Gas and Water surveys.
The initial estimates are obtained as in the manufacturing and mining industries utilizing the quarterly production quantity and value surveys.The value added is extrapolated from current price production values and the cost and price estimates are obtained through the increase in production quantities.
CONSTRUCTIONThis sector covers all the construction activities of both the private and public sectors.The value added of the sector is estimated under the headings of building (houses, apartment blocks, commercial-industrial buildings, cultural, religious and administrative buildings and others) and non-building construction (roads, bridges, dams, and others) as well as under the headings of private and public construction.Value added is calculated by applying the value added-output ratio to the obtained production values for each quarter.
1- Public Sector ConstructionThe quarterly data are compiled from the following public institutions: General Budget institutions, Annexed Budget Institutions, State Economic Enterprises, Revolving Founds, Provisional Special Administrations, Municipalities, Funds-Independent Institutions, and Annexed Budget Institutions attached to Municipalities.
"The Quarterly Fixed Capital Formation Survey" questionnaire sent to the municipalities and other public organizations for each quarter provides the value of the investments realized in the period. In the quarterly estimates, those public institutions which on average realize 80 % of total public investments are covered. This letter survey collects information on planned investment in the current year and realized investment in the past years. Based on this information the quarterly figures are revised.
2- Private Sector ConstructionFor the estimation of private sector construction expenditures it is assumed that construction is completed within in five years and that construction activities start in the period when the building permit is granted.The quarterly estimates reflect the completed parts of construction activities which commenced in the previous periods.
Firtsly, the distribution of completion ratios of new buildings and extentions (of those already having occupancy permit) after the issuance of building permit is found.
These ratios are as follows:
1.Year: 0.015The construction completed in each periodis calculated in square-meters (m2). The production value of private sector construction is estimated by multiplying square meters with m2 cost values.
A) Value Added at Current PricesThe construction sector's value added is calculated through a value added-output ratio which is determined for each quarter. Value added-output ratios for building and non-building construction are obtained from input-output tables.
The data on the input cost of private construction covers the total payments made by the construction owner until the work is finished. These payments are for the purchase of materials (rocks,soil, cement, iron,and wood) and wages . Consequently, the value of output does not include profits. In line with the suggestions ofthe experts fromthe Ministry of Public Works, 25 percent of production value is added to value addedas a profit share.
The value added calculated using the value added-output ratio is net value added. To convert it to gross the value added, it is necessary to add amortization and indirect taxes. Amortization is estimated using the current input-ouput table. Indirect taxes are obtained from the surveys on the construction fees charged by municipalities and the Ministry of Finance.
To estimate private construction in rural areas, i.e., those areas with a population of less than 2000, the occupancy permits data collected by SIS are used. For public construction related data, village budgets are used.
B) Value Added at Constant PricesThe construction cost index is calculated by using a wage index and a material input index. Public sector construction value added at constant price are calculated using the wage index (1987=100). For the private sector the estimate square meters of construction value in each quarter is multiplied with the 1987 average unit cost value and the output at 1987 prices is obtained. To obtain value added at constant prices, the value added-output ratio is applied to the output at 1987 prices.
For the constant value of rural construction, of indirect taxes, and of amortization, the sector's net value added deflator is used . The construction value added at constant prices is calculated as the sum of public, private and rural construction, and indirect taxes and amortization.
TRADECommercial activities cover transactions based on the purchase and sales of material goods and services which are performed with the aim of profit.
1- WHOLESALE AND RETAIL TRADEThe estimation of value added in this sector is mainly based on the input-output coefficients and the outputs, in value terms, of goods-producing sectors.The data used for the sector consist of production values for the agriculture, forestry, livestock, fishing, mining, and manufacturing sectors, and imports and import duties. Total production is calculated by adding imports and import duties to domestic output. The input-output studies also provide marketing ratios for each sector.Production value subject to trade is found by applying these ratios to each sector's production values. In order to find out the income of the trade sector from marketed products, trade margins showing the difference between the sector's purchase price and sales price is applied to the production values, and thus the output of the trade sector is calculated. Value added is obtained by applying the value added-output ratio from the recent input-output table to the total output value.
For the calculation of value added at constant prices the same procedure is followed. The domestic output of goods at constant prices are estimated as described in the preceeding sections. Import price indicesare used to convert imports and import duty values in to constant prices.
2- HOTELS AND RESTAURANTSThe otput of this sector has a domestic and a foreign component, since it includes tourism revenues. The main sources of data are tha annual Surveys of Trade, Hotels, Restaurants and Services, the current input-output table, and data collected by the Ministry of Tourism.
The Ministry of Tourism compiles monthly data on tourism receipts and conducts occasional sampling surveys which provide information on the proportion of food and accommodation expenditures. Using this proportion, and tourism receipts, the foreign component of the output of this sector is obtained.
The domestic component of the output of hotels, restaurants, and services is obtained from the recent input-output table. However, this figure refers only to the year the input-output table is constructed. The domestic output at current prices is extrapolated using the average of the current growth rates of wholesaleand retail trade, financial institutions, communications and transportation, and personnel services.
The sum of the domestic and foreign components of the sector gives its total output. Using the value added-output ratio,value added at current prices is calculated. The value added of the foreign component at constant prices is obatined by deflating it with the out of home component of the food and beverages index of the CPI. For the domestic value added, the constant growth rates of the above mentioned service sectors are used. Toestimate the quarterly domestic value added, the quarterly distribution of the same sectors is used. For the foreign value added, component estimation is done on a quarterly basis.
TRANSPORTATION AND COMMUNICATIONSAll transportation and communication services which are done by an establishments on behalf of others are covered in this sector. For the calculation of value added, the production approach is used for the highway passenger and freight transportation and maritime freight transportation activities; and the income approach is used forthe public sector transportation activities.
A) Value Added at Current Pricesa) Public Transportation Activities: This sector consist of the activities of State Railways, Maritime Lines, Airlines, PTT facilities (Post, Telegraph, Telephone), Petroleum Pipeline Corporation, municipal passenger transportation activities. The value added is calculated by utilizing profit/loss tables which are obtained quarterly from these organizations.
For private airlines, value added is calculated in the same way.
b) Local and Intercity Motor Vehicles Passenger Transportation: Annualfigures for the number of commercialcars, minibuses, and buses which engage in local and intercity passenger transportation activities are available. The input-output table provides information on the revenue per vehicle by type and value added-output ratio for vehicle types. However, the output per vehicle figure belongs to the year when the input-output table was constructed. For the other years, estimates of output are obtained by multiplying the number of vehicles with output per vehicle and extrapolating them with the transportation component of the CPI. Then value added-output ratio is used to obtain value added.
c) Total Freight Transportation Except State Railway: The calculation of value added for this sector is similar to that in the wholesale and retail trade. Firstly, the marketed value of agriculture, livestock, forestry, mining, and manufacturing industry outputs are calculated utilizing marketing ratios from the input-output table. Then the marketed value is multiplied with the transportation margin, again obtained from the input-output table to calculate total output. Finally, the value added is calculated by applying value added-output ratio to output values.
The income from transit transportation is directly added to the output of this sector.
B) Value Added at Constant PricesThe transportation component of the CPI is used as a deflator in the calculation of constant value added in this sector, except in the highways freight transportation. The agriculture, livestock, forestry, mining and manufacturing industry production values at constat prices are converted to value added at constant prices in highways and seaways freight transportation utilizing the marketing ratios, transportation margin, and value added-output ratios.
FINANCIAL INSTITUTIONSBanks, agricultural credit cooperatives, insurance companies, foreign exchange dealers, and stock brokers are covered in this sector. The value added is estimated is estimated by the income approach. The value added is obtained by summing the following items:
Wage payment in cash and in kindThe source of data is the profit/loss tables received from these institutions quarterly.
The quarterly rate of increase of the number of employees is used for the calculation of value added at constat prices.
IMPUTED BANK SERVICESThe imputed bank service charge is defined as the difference between the interests received from borrowers and the interest paid to depositors.
The value of imputed bank services are deducted from the sectors according to the distribution of loans used by the sectors. The loans data are compiled from the surveys of loans provided by banking institutions.
Interest receipts on consumer loans, which are included in imputed bank services, have been deducted from total interest receipts of banks.
For the calculation of imputed bank services at constant prices, only the rate of increase of the number of employees in banks has been used.
OWNERSHIP OF DWELLINGThis source consists of incomes of owners from their dwelligs. The revenues obtained from dwellings takes two forms. If the dwelling is not used by its owner, and it is let to another person in return for some payment, then income obtained from this process becomes monetary income called rent. If the dwelling is used by its owner, a monetary income is not received but a utility is obtained equal in value to rent income. This revenue is an imputed one. In this respect, the output value comes from services offered by dwelling units. From this total, the value added of sector can be found by subtracting the inputs of this sector.
The number of dwellins and gross rent values which are used in the calculation of the sector's value added are obtained from the 1987 Household Income and Expenditures Survey. The survey also provided information on the input values. The number of dwellings, gross rent, imputed and actual, inputs, and gross valued added per dwelling were estimated for june 1987 separately for urban and rural areas. Using the monthly occupancy permit data, the additions to the number of dwellings and average value added for 1987 and extrapolation of the resultant value with price indices is how the value added in current prices is computed. For urban areas the rent component of the CPI and for rural areas the Rural Consumer Price Index (1973-74=100) are the indices used.
The product of the number of dwellings in each period and average value added for 1987 results in value added at constant prices for each period.
BUSINESS AND PERSONAL SERVICESAll business and other service activities except government services are covered in this sector. This is one of the activities where data collection is beset with difficulties. The estimation of value added is based on the input-output tables, annual service sector surveys, and industrial censuses. The base year value is extrapolated using the growth rates of other sectors both for current and constant price estimates. Consequently estimates are also based on the quarterly figures of the other sectors.
GOVERNMENT SERVICESGovernment services cover all the collective and free services provided by the government institutions. Since the market value of these services are not available, the contribution of the sector to GDP is calculated by determining factor income payments. The data sources are the Ministry of Finance, Provisional special administrations, municipalities, and other public administrations. The total of gross wage and salary payments, in cash and in-kind, social transfers made up public administrations, and the amortization values of buildings owned by the government make the value added in government services. For the calculation of amortization, the value of government buildings is extrapolated quarterly using the CPI. To this, the value of completed government buildings is added and a 2% amortization share is deducted from the estimated government building value.
The constant price calculation is based on the number of employees. The constant price growth rate of government services is measured by the growth rate of the number of employees.
NON-PROFIT INSTITUTIONS SERVING HOUSEHOLDSActivities of the institutions which produce private services to households without the aim of making profit resemble public services. Non-profit institutions are established by individuals gathering voluntarily in orter to undertake specific activities. Chambers of trade and industry, trade unions, political parties,social clubs, assoiations, religious societies, and aid agencies are all nonprofit institutions. Income from sales of goods and services of non-profit institutions are completely used in the establishment's activities. Most of the activities are financed by membership fees, donations by persons, corporationsand governts, and income from real estate.
It is important to distinguish between non-profit institutions engaged in market and non-market production. Many schools, colleges, universites, clinics, hospitals, etc. Founded as non-profit institutions are clearly market producers as they charge fees, often very high fees, based on their production costs. Their production activities may generate an operating surplus or a loss. Any surplus they make must be retained within the institutions as their status prevents from distributing it.
The majority of non-profit institutions are engaged in non-market rather than market activity. Non-market output consists of output that is not produced for the market, including goods or services provided to others free or at prices that are not economically significant. Their principle source of finance may be regular subscriptions paid by the members of the association that controls them or transfers or donations from third parties, including government. Non-profit institutions engaged in non-market production may be divided into two main groups:
1- Non-profit institutions controlled and mainly financed by governmentNon-profit institutions controlled and mainly financed by government must be properly constituted legal entities which exist separately from government. In Turkey institutions such as Red Crescent, Green Crescent, Turkish Air Authority are in this group.
Two main types of non-profit institutions serving households may be distinguished. The first type consists of those which are created by associations of persons to provide goods or, more often, services primarily for the benefit of the members themselves. The services are usually provided free, being financed by regular membership subscriptions or dues. They include non-profit institutions such as professional or learned societies, politicial parties, trade unions, consumers' associations, religious societies, and social, cultural and recreational or sport clubs. The second type of non-profid institutions serving households consists of charities, and relief or aid agencies.
The value added created by non-profit institutions is calculated by income approach. To determine the value added of the NPI, surveys are conducted each quarter. The surveys cover a sample of associations, foundations ,and amateur sport clubs, but have a full coverage of other institutions. SIS started the surveys in 1990. For the value added before that date, an extrapolation is made using the growth rates of the other service sectors.
The number of employees in these institutions is used in the calculation of value added at constant prices.
INDIRECT TAXESIndirect taxes have been classified into two groups: domestic and import duties. The sources of data are the quarterly accrual and collection reports of the Ministry of Finance, Central Bank, and the questionnaires sent to the municipalities and provincial special administrations which also collect taxes and duties. The tax figures are calculated on an accrual basis.The Ministry of Finance provides data for the sectoral distribution of value added tax and import duties, and the Central Bank for the distribution of fund levies on imports; the sectoral distribution of all other taxes is based on the input-output table.
For the conversion of domestic indirect taxes into constant prices, first the sectoral base year rates are calculated as the ratio of indirect taxes to value added in that sector. The indirect taxes on imports are converted to constant prices using to import price indices of the Central Bank and SIS.
SUBSIDIESSubsidies are payments that are made by government institutions to public institutions in order to compensate for the latters'losses created by government price policy.
Subsidies cover mainly the transfers to the State Economic Enterprises and similar institutions.The data are compiled from the Undersecretariat of Treasury and Foreign Trade, the Ministry of Environment, and the institutions which receive subsidies. For about 80 % of the subsidies, the data are quarterly. For the rest, the same quarterly distribution is assumed.
Subsidies are converted to constant prices by using the indirect tax deflator.
NET FACTOR INCOMES FROM THE REST OFTHE WORLDWorker's remittances cover foreign exchange remitted by workers abroad, foreign exchange collected for military service fees, foreign exchange received as customs duty within the framework of free import notice, and workers' remittances provided by entrepreneurs operating abroad.
Profit transfers are the transfer of incomes by foreigners who have investments in Turkey to their companies abroad.
Interest payments cover the payments by the Treasury, the State Economic Enterpries, banks, and other establisments for their debts.
The capital and interest revenues of entrepreneurs doing works such as construction, and technical services abroad are included in the items entrepreneurial and interest incomes.
The data are compiled quarterly by the Central Bank. The figures are converted from US dollars to Turkish liras using the foreign trade weighted average exchange rates prepared by SIS. Factor incomes received are converted into TL on the basis of average import exchange rate and factor incomes paid on the basis of average export exchange rates.
For constant price calculation the Central Bank and SIS foreign trade price indices are used. The positive items are deflated by the export price index and the negative items by the import price index.
GROSS DOMESTIC PRODUCT BY EXPENDITURE
-Government final consumption expenditure
-Private final consumption expenditure
-Gross fixed capital formation
-Machinery and Equipment
-Construction
-Change in stocks
-Net exports
-Exports of goods and services
-(Less) Imports of goods and services
Sources and methods for estimating the expenditure components of the GDP are summarized below.
GOVERNMENT FINAL CONSUMPTION EXPENDITUREGovernment final consumption expenditure is equal to the value of goods and services produced by government for its own current use. It includes expenditures on education , health and their community and social services provided by government (but government enterprises are excluded). Since government services are not sold, they are valued at their costs to the government. This cost is defined as the sum of the intermediate consumption, compensation of employees, and consumption of fixed capital. Compensation of employees consists primarily wages and salaries, in cash and in kind, and employers' contributions to social security schemes.
In Turkey , the government encompasses the following organizations:The basic source for computing the government consumption expenditure is the government budget accounts.
A distinction is made between military and civilian purposes of government consumption expenditures. Government consumption expenditures for military purposes cover the remuneration of military personnel as well as acquisitions and construction for defence. Military investments are considered government final consumption expenditure, with the exception of military family dwellings which are recorded as gross fixed capital formation.
To derive estimates at constant prices, changes in the number of government employees are used. Limited information is available on the composition of consumption goods and services purchased by the government and this component is deflated by the wholesale price index.
PRIVATE FINAL CONSUMPTION EXPENDITUREPrivate final consumption expenditure, the largest component of the GDP, consists of outlays of households on new goods and services. These outlays include:
Private final consumption expenditure also includes the value of other goods produced for the household's own consumption such as crops, livestock products, firewood, and other non-marketed outputs.
I. FOOD, BEVERAGES, AND CONSUMER GOODSExpenditure on goods is estimated by using the commodity-flow method.
The Commodity-Flow MethodThe steps in making commodity-flow estimates of final consumption expenditure of households are as follows:
1.Identification, in the supply of goods and services from domestic production and imports, of those items that are entirely or partly used for final consumption of households.
2.Estimation of the part of the supply of these groups of goods that is in fact used for household consumption in those cases where there are alternative uses; and
3.Estimation of trade and transport margins and import duties to arrive at purchasers' values if the domestic supply of goods is valued in producers' prices and imports at CIF.(Cost-Insurance-Freight) prices.
The Classification by Broad Economic Categories (BEC) are used for the identification of items (goods) that are entirely or partly used for final consumption. According to BEC, allocation of goods is done on the basis of the main end-use of the commodities in terms of the SITC (Standard Industrial Trade Classification) Rev.3. The BEC distinguishes five categories: food, industrial supplies, capital equipment, consumer durables, and consumer non-durables. Specifically, the sub-categories of the BEC can be aggregated into capital goods, and intermediate goods and consumption goods.
The composition of the three basic classes of goods in the SNA (System of National Accounts) in terms of the basic categories of BEC is shown below.
1.Capital goods Sum of categories:
41 Capital goods (Except transport equipment) 521 Transport equipment, industrial
2.Intermediate goods Sum of categories:
111 Food and beverages, primary, mainly for industry 121 Food and beverages, processed, mainly for industry 21 Industrial supplies not elsewhere specified, primary 22 Industrial supplies not elsewhere specified, processed 31 Fuels and lubricants, primary 322 Fuels and lubricants, processed (other than motor spirit) 42 Parts and accessories of capital goods (except transport equipment) 53 Parts and accessories of transport equipment
3.Consumption goods Sum of categories:
112 Food and beverages, primary, mainly for household consumption. 122 Food and beverages, processed, mainly for household consumption 522 Transport equipment, non-industrial 61 Consumer goods not elsewhere specified, durable 62 Consumer goods not elsewhere specified, semi-durable 63 Consumer goods not elsewhere specified, non-durable
The above groupings include only 16 of the 19 BEC basic categories, as categories, 321 Motor spirit, 51 Passenger motor cars, and 7 Goods not elsewhere specified, are omitted. Category 321 Motor spirit and Category 51 Passenger motor cars are used extensively both for industry and for household consumption. Category 7 Goods not elsewhere specified, includes, amongst other commodities, a range of military equipment, postal packages, and special transactions and commodities not classified according to kind and can be a mix of the SNA classes of goods. These three BEC categories are of particular importance in international trade and of great interest to economists and others studying international flows of commodities. These commodities were considered to be sufficiently important to warrant establishment in the BEC of seperate categories. Users may choose to make their own assignments of these three categories of goods among the basic SNA classes of goods.
The groups of BEC (112, 122, 61, 62, 63, and 522) are taken as a basis for calculation of final consumption expenditure.
BEC 112 - BEC 122 Food and beverages
BEC 112 includes fruits, vegetables, leguminous vegetables, milk, fish, and husbandary products.
BEC 122 includes processed food and beverages. (Products such as meat and offal prepared and preserved; fish and roes dried, smoked, salted; vegetables prepared or preserved; jams; fruit jellies marmalades; fruit juices; sugar confectionery; alcoholic and non-alcoholic beverages; margarine; and olive oil)
BEC 61 Durable Consumer Goods
This group includes commodities which have an expected life-time of more than three years or more and with relatively high monetary values such as refrigerators, washing machines, furniture, and musical instruments.
BEC 62 Semi-durable Consumer Goods
This group includes commodities which have an expected life-time of use of more than one year but less than three years and are not relatively of high value such as footwear, jackets, dresses, and skirts.
BEC 63 Non-durable Consumer Goods
This group includes commodities which have an expected life-time of use of less than one year such as medicaments, perfumery, cosmetics, soap, cleaning and polishing preparations, books, newspapers, etc.
BEC 522 Non-industrial Transport Equipment
This group includes yachts and other vessels for pleasure or sports, row boats and canoes, caravan or housing or camping, bicycles, and other cycles.
BEC 51 Passenger Motor Cars
This group includes motor cars and other motor vehicles principally designed for the transport of persons (other than public-transport type vehicles). The share of automobiles for personal use is estimated from the registers of motor vehicles. According to registers, personal share of automobiles is approximately 85 percent of the total.
BEC 321 Motor Spirit
This group includes motor spirit.
Estimation of the supply of consumer goods at purchasers' prices from domestic production and imports:The goods (items) in foreign trade statistics are listed in the nomenclature for the classification of goods in customs tariffs. Those goods supplied from imports are classified by 19 different BEC groups according to SITC Rev.3.
Firstly, imports at CIF values of consumer goods according to the BEC groups (51-522-61-62-63, 112-122) are obtained. To arrive purchasers' values, import duties, trade and transport margins are added to CIF values.
Goods supplied by domestic production, mainly manufacturing industry and agriculture, are also classified according to 19 different BEC groups. Consumer goods (processed food and beverages, transport equipment and durable, semi-durable, and non-durable goods) are mainly produced in the manufacturing industry sectors.
Sales values of these goods according to ISIC Rev.2. at an 8 digit level are obtained from the quarterly industrial production and tendency surveys. The total sales value for manufacturing industry is obtained by summing the results for large-scale and small-scale manufacturing industry and rural industry.
BEC 112 includes primary food and beverages mainly for household consumption but some part of the food items in that category are used as intermediate goods in industry. Particularly, part of fruits and vegetables are considered as inputs. In addition to agricultural products, livestock and fishing products are considered as mainly consumer goods. Consumption shares of these products are obtained from the 1990 Input/Output Table.
Acqusition of new goods for final consumption by households should be valued at purchasers' prices. The followings are the steps in the Commodity Flow-Method used for personal consumption expenditure:
This item includes expenditure by households on energy for domestic heating, cooking and lighting, that is, purchases of gas, LPG (Liquefied petroleum gas), electricity, heating oil, kerosene, fire wood, briquettes, coal, and coke.
Data on fuel consumption of households are obtained from the Ministry of Energy and National Resources. Deliveries of electricity in terms of kwH directly for household consumption are obtained from electricity statistics of the Turkish Electricity Authority. To calculate electricity expenditure at current prices, electricity (kwH) is multiplied by average prices. Gas and water statistics from SIS are the source of data on water and gas consumption of households.
Household outlays on passenger transportation are based on the revenue received by those involved in passenger transportation.
III. SERVICES:Consumption on services (hotel, restaurant, business, and personal services) is derived from the output of these sectors.
IV. OWNERSHIP OF DWELLINGSThe basic source consists of an estimation of the total stock of dwellings and gross rent value. Total output of this sector is included in private final consumption expenditure.
GROSS FIXED CAPITAL FORMATIONEstimations are made separately for two main types of assets: machinery - equipment and construction.
I) MACHINERY AND EQUIPMENTThe commodity-flow method is used in estimating gross fixed capital formation (GFCF) for machinery and equipment based on statistics on foreign trade and domestic production. Since the domestic supply of capital goods is valued in producers' prices and imports at CIF values, import duties, trade and transport margins and installation costs are added to the total supplies of capital goods and exports are deducted to arrive at purchasers' value.
41 Capital Goods (Except Transport Equipment)
This category includes machinery such as agricultural machinery; machinery for metallurgy, mining, quarrying, construction; machinery for food, beverage and tobacco processing; machinery for textile, appereal and leather production; and office, accounting, and computing machinery, electrical motors, generators and transformers, medical appliances and instruments, and appliances for measuring, checking, testing, navigating and other purposes.
521 Industrial Transport Equipment
This category includes motor vehicles for transport of goods and special purpose motor vehicles, trailers and semi-trailers for the transport of goods; rail locomotives; tankers; and vessels.
51 Passenger Motor Cars
Automobiles for personal use are excluded from gross fixed capital formation. The share of automobiles for personal use is estimated from the registers of motor vehicles. According to registers, the business share of automobiles is approximately 15 percent of the total.
The acquisition of equipment for military purposes is also excluded from gross fixed capital formation.
The expenditure approach is used in estimating gross fixed capital formation of the central government, municipalities, and public enterprises and extrabudgetary funds.
Since total gross fixed capital formation in machinery and equipment is obtained by the commodity-flow method, to obtain machinery and equipment of private sector, (avoding double counting) GFCF by government in machinery and equipment is deducted from the total commodity flow estimates.
II) CONSTRUCTIONPrivate sector building construction includes residental buildings (dwellings) and non-residental buildings (commercial industrial and religious buildings). Floor area, in terms of square meter, of construction put in place during every year is calculated by consulting building permits and occupancy permits. The average unit cost of construction is multiplied by floor area (m²) to obtain gross value estimates of construction put in place.
As regards new constructions, there are three basic elements needed for estimation.
1) The number of starts each year.
2) Completion time of construction (It is assumed that construction is completed within five years. There is usually considerable time lag between the issue of the construction permit and the actual start for construction. This delay is ignored and it is assumed that construction is started at the same year with the permit issue.)
3) The average unit cost of construction
In calculation, the following ratios obtained from the surveys are used.
A = Ri x p1 + Ri x p2 x p21 + Ri x p3 x p31 + Ri x p4 x p41 + Ri x p5 x p51
+ Ri-1 x p2 x p22 + Ri-1 x p3 x p32 + Ri-1 x p4 x p42 + Ri-1 x p5 x p52
+ Ri-2 x p3 x p33 + Ri-2 x p4 x p43 + Ri-2 x p5 x p53
+ Ri-3 x p4 x p44 + Ri-3 x p5 x p54
+ Ri-4 x p5 x p55
To calculate gross output, A (construction put in place in terms of square meter) is multiplied by average unit cost (TL/m²).
Average unit cost of construction is calculated by using prices and weights of approximately 120 items.
Value added is calculated by applying value added / output ratio to gross output value; 25 % of gross output is added to value added as a profit share.
Where current price estimates are based on floor area, in terms of square meter of construction put in place multiplied by average prices of the quarter, the constant price estimates are derived as floor area multiplied by average prices of the base year.
Public Sector :For the valuation of construction investment in the public sector, data are obtained from the following organizations.
The expenditure approach is used in estimating gross fixed capital formation. Annual final budget results of the Ministry of Finance are used for general government investments. Higher Auditing Board reports are the source for state economic enterprises. Annual reports are used for funds and social security institutions. Since it is not possible to obtain final results quarterly, questionnaires are sent to public organizations every quarter.
Public organizations usually furnish detailed information on construction classified by type of building (residential and non-residential buildings) and other construction work.
Residential and non-residential buildings:Value of work put in place on the construction of buildings which consist primarily of dwellings, and buildings for industrial, commercial, religious, educational, and similar purposes is estimated.
Other construction works:Value of work put in place on the construction and major alteration or renewal of non military works, such as the railroads, roads, streets, sewers, bridges, viaducts, subway and tunnels, harbours, piers and other harbour facilities, car parking facilities, airport, pipelines, oil-wells and mine shafts, canals and waterways, water power projects, dams , electiricity transmission lines, gas mains and pipes, telephone and telegraph lines. To obtain constant price estimates of construction, the construction cost index (1987=100) is used.
CHANGE IN STOCKSStocks or work in progress consist mainly of goods owned by producers that have been purchased for intermediated consumption but not yet used; and goods produced for sale but not yet sold. The addition to stocks in a period is considered an addition to the gross capital formation of that period. Since prices are likely to change over the course of the period, it is necessary to distinguish between the change in the value of inventories and the change in their quantity. The reported figures of stocks at the beginning and at the end of a period of account are revalued to reflect a constant price level preferably by the average price of that period. The book values of stocks at the beginning of the period of account are adjusted by the change in prices over the last three months of the preceding accounting period, and the book value of stocks at the end of the period by the change in prices over the last three months of the current period.
EXPORTS AND IMPORTS OF GOODS AND SERVICESExports and imports consist of the transactions in goods and services of the residents of Turkey with the rest of the world in the course of an accounting period. Exports of goods and services constitute a component of final demand. Imports are source of the supply of goods and services. Since imports do not orginate in domestic production, they are deducted from total uses to arrive at the GDP.
Data on merchandise exports and imports for national accounts are obtained from the monthly foreign trade statistics of the SIS balance of payments and the details of invisible items obtained from the Central Bank are used to calculate the exports and imports of services.
Exports of Goods and Services:Exports consist of goods and services exported from Turkey to other countries by residents. Merchandise exports are valued at FOB (free on board) prices. In addition to the producers' value of commodities at the establishment of exporter, FOB values includes all costs of transporting the goods to the customs frontier of exporting country.
Imports of goods and services:Imports consist of goods and services which Turkey purchases from other countries in the course of the period. Merchandise imports are valued at CIF prices. The CIF value of imports includes freight and insurance on imported merchandise regardless of whether the payments are made to resident or non-resident carries or insurers. To avoid inflating the figures for total imports, it is therefore necessary to add an amount equal to the freight and insurance paid to domestic carriers on imports to the exports of importing country. SNA shows the information needed to make adjustments separately, decomposing the CIF value of imports into three parts:
To obtain constant price estimates, exports and imports are deflated by exports and imports price index (1984-1986=100) of the Central Bank.