Regional accounts are a regional specification of the corresponding accounts of the national economy. Regional accounts provide a regional break down for major aggregates such as Gross Value Added by economic branches, Gross Domestic Product etc.
- Principles applicable to all economic branches
Concepts and classification used
The Regional and National Accounts are based on the same concepts of ESA 2010 and Nomenclature of Economic Activities (NACE Rev.2), used by National Accounts in Albania.
Breakdown of territory for Republic of Albania by Statistical Regions
The Nomenclature of Territorial Measuring Units for Statistics (NUTS) is a uniform classification, and is used as a base for collection and processing of European regional statistics.
NUTS classification is used for:
- Collection, development and harmonization of statistics at regional level;
- Socio-economic analysis of the regions;
- For allocation of structural funds for development;
The main principle for allocation GVA in Regional Accounts is that GVA should be allocated to the region where the producer unit is, it means that GVA have to be allocated to region where is created.
This residence principle is particularly difficult to apply in some branches like as energy transport, etc. The main problem is allocation of GVA by multi-regional companies. During the period of estimation does not exist data sources for local units (LU) and for units which are part of companies with economic activity in more than one prefecture.
For allocation of GVA in Albania are used as regional weights, data from SBS (average wages and salaries by branch) and LFS (number of employed persons according working place by the same branch structure).
Treatment of uni-regional and multi-regional units
INSTAT has made a qualitative change in developing methods for assessing the regional GVA as a combination of methods for allocating uni-regional and multi-regional units. Direct methods is used for uni-regional units.
Many producer units have sites in more than one region and are active in more than one industry. Activities of the multi-regional units should be classified correctly to local KAUs.
The treatment of multi-regional and multi-industry unit follows in Regional Accounts the same principle that has been applied in the National Accounts. The treatment starts by defining the possible primary, secondary and ancillary activities of the enterprise.
The primary activity of a local KAU is the activity whose Value Added exceeds that of any other activity carried out within the same unit. A secondary activity is an activity carried out within a single local KAU in addition to the principal activity.
Transition from GVA to GDP
According to EUROSTAT recommendations, national taxes on products (D.21) and subsidies on products (D.29) are regionalized in the same structure as the total Value Added of all industries at basic prices (proportional allocation).
1.2 Specific methods and sources for compiling Regional GVA
The main method used in the calculations is top- down method. This method is applied by distributing the national figure in statistical regions using regional weights (keys) which is as close as possible to the variable to be estimated. The method is called top-down because the aggregate is allocated to a region and not to local units.
Top-Down method was applied also for branches of mining and quarrying, manufacturing, construction, wholesale and retail trade, hotels and restaurants, transport, telecommunications, financial intermediation, real estate renting and business activities, and other community, social and personal service activities. Weights for allocation of GVA at national level for above branches are vector product of average wages and salaries from Structural Business Survey - SBS and number of employment according working place from Labour Force Survey - LFS. Employment according working place Employment according working place accepts residence principle for allocation GVA into regions.
For branches of public administration, education and health was applied Pseudo- Bottom-Up method. This method use regional weights where data for local units are missing. For these branches was applied as a key value added - wages and social contributions from administrative sources, aggregated in regions statistical level 3, 2.
1.3 Specific methods and sources for compiling Regional GVA at constant prices
In compiling indicators at constant prices, national price indices are used in deflating process according to economic branches. No regional information in prices is used in this distribution. The constant prices are estimated as in the annual national accounts, on the basis of regionally distributed previous years' prices.
More detailed information on national regional accounts can be found in the following links.
PART E-Regional accounts-Albania