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Final National Accounts Statistics, 2005

Release Date : Friday 28, January 2011 1405

FINDINGS

1. Introduction

Final National Accounts Statistics (FNAS) 2005 provides a new benchmark for Malaysia's economic statistics. The benchmarking includes the statistics that are used for the purpose of rebasing The Gross Domestic Product (GDP) and Producer Price Index (PPI).

The compilation of detailed and comprehensive coverage is based on the flow of commodities, typically is used as the basis to revise the previous GDP based on the earlier final national accounts. This is because the flow of commodities provides more accurate estimates since the producers and end users can be verified based on the supply and the demand for each commodity. Furthermore, the flow of commodities is based on final data obtained mainly from the economic census and administrative records of all industries in Malaysia. Therefore, the benchmarking by FNAS gives a review of economic statistics a more accurate structure for year 2005.

The FNAS 2005 compilation complies with the concepts and recommendations by The System of National Accounts 1993 (SNA93). Meanwhile, the FNAS 2000 based on the combination of SNA68 and SNA93 concepts. FNAS has been compiled for 1971, 1973, 1978, 1983, 1987 and 1991, whereby these compilations were based on the SNA68 concepts.


2. Malaysia's Economy 2005

Malaysia's economy as reflected by the GDP at purchaser's prices was estimated at RM540 billion in 2005. The FNAS enable GDP to be compiled by three approaches i.e. the production, expenditure and income approach as shown in Table A below:

Table A : Gross Domestic Product Based on Final National Accounts Statistics at Current Prices RM (Million) : 1971 - 2005


2.1 GDP by Production Approach

Overall, the GDP increased by 8.8 per cent annually at current prices for a period of five years from 2000 to 2005. Based on the production approach value added for each sector registered the average annual growth in the range of 1.4 per cent to 13.9 per cent as shown in Table B. The Mining and Quarrying Sector posted the highest growth over the five years, i.e. 13.9 per cent followed by Services Sector 11.1 per cent. Meanwhile, the Construction Sector recorded the smallest growth of 1.4 per cent .

The Services and Manufacturing Sectors continually gives significant contribution to the GDP by registering 46.1 per cent and 28.0 per cent respectively as reflected in Table C.

Table B : Compounded Annual Growth Rate (CAGR) 2000-2005 by Production Approach

Table C : GDP by Kind of Economic Activity Based on Final National Accounts Statistics (1971-2005) - Percentage Share of GDP

2.2 GDP by Expenditure Approach

Domestic Final Consumption comprising of Government Final Consumption and Private Final Consumption posted a higher growth for the five years period compared with other components as shown in Table D. For the year 2005, Private Final Consumption Expenditure made up higher share of 43.8 per cent. Government Final Consumption Expenditure recorded a higher percentage contribution of 12.1 per cent compared to the year 2000 (10.3 per cent). Government Final Consumption Expenditure registered the highest growth followed by Private Final Consumption Expenditure.

The economy in 2005 was driven by domestic demand recorded at 77.6 per cent as reflected in Table E. Private Final Consumption Expenditure in 2005 amounted to nearly RM236 billion. Exports showed a trade surplus of RM119 billion. Balance of Goods and Services also registered a high growth, i.e. by 11.7 per cent. The growth was supported by higher growth of exports. Thereby, Balance of Goods and Services showed a remarkable increase in 2005.

Table D : Compounded Annual Growth Rate (CAGR) 2000-2005 by Expenditure Approach

Table E : Expenditure on GDP by Type of Expenditure Based on Final National Accounts
Statistics (1971-2005)



2.3 GDP by Income Approach

From the income approach perspective the Gross Operating Surplus registered RM363 billion or 67.1 per cent from the GDP in 2005. Meanwhile, the Compensation of Employees recorded RM151 billion and Taxes less Subsidies on Production and Imports was RM26 billion that made up 28.0 per cent and 4.9 per cent respectively as shown in Table F and Table G.

The Gross Operating Surplus showed an increasing trend for the year 2005, while the Compensation of Employees which is the return to the labour factor generally showed a declining trend over the same period. Similarly, Taxes less Subsidies on Production and Imports also showed a declining trend in terms of contribution to the GDP.

Table F : GDP by Income Approach : Time Series Data Based on FNAS Statistics (1971-2005)



Table G : Compounded Annual Growth Rate (CAGR) 2000 – 2005 by Income Approach

The growth of Gross Operating Surplus was the highest of 9.0 per cent as shown in Table G. Taxes less Subsidies on Production and Imports grew 6.9 percent annually, while Compensation of Employees recorded 8.7 per cent annual growth.