Forecasting Romanian sectoral economy using input-output method

• Author: Duguleana L., Duguleana C.
• Pages: 133-150

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 10 (59) No. 1 - 2017

Forecasting the Romanian sectoral economy

using the input-output method

Liliana DUGULEANĂ1, Constantin DUGULEANĂ2

Abstract: The purpose of this paper is to forecast the sectoral output in 2013 based on the

input-output structure of Romanian economy in 2010. Considering that the economic linkage

mechanisms do not easily change during certain time periods, the forecasting is possible,

even if not in the sequence of the time passing. Using the technical matrix of the sectoral

structure described for ye ar 2010 and some known indicators of the economic sectors, as the

value added for each sector in 2013, the sectoral output is projected for 2013. The Romanian

GDP in 2013 is estimated based on the input-output model. From a managerial perspective,

this study is useful to forecast the sectoral output and to understand the sectoral behaviour,

based on the input-output analysis of the value added, the compensation for employees and

the final demand, which were considered here.

Key-words: input-output analysis, forecasting, output multipliers, backward linkage,

forward linkage

1. Methodology

The European System of Accounts (ESA95) has established as compulsory the

transmission of National Accounts to Eurostat, and more precisely in the field of

Supply, Use and Input-Output tables, for each Member State of the European Union.

The data transmission has envisaged three types of tables: annually - the Sup-

ply and Use tables (SUT) and every five years - the Symmetric Input-Output tables

(SIOT), in a standardized format for 64 industries (NACE rev.2) and 64 products

(CPA 2008).

The purpose is to aggregate the national Supply and Use tables at basic prices

of all EU Member States into a consolidated European Supply and Use tables and an

Input-Output table, for each year. The Supply, Use and Input-output tables for the

European Union and for the euro area were released for the first time in October

2012, for the year 2008. Since then, the European tables in NACE Rev2 were made

1 Transilvania University of Braşov, ldugul@unitbv.ro

2 Transilvania University of Braşov, cduguleana@unitbv.ro

Bulletin of the Transilvania University of Braşov - Vol. 10 (59), No. 1 - 2017 • Series V

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by Eurostat for every year, establishing the transmission deadline for EU States as

three years after the end of the reference year.

Starting with September 2014, the European transmission program of

National Accounts applies the European System of Accounts 2010 (ESA 2010), a

development of the System of National Accounts 2008. The first mandatory

transmission of the national accounts according to ESA 2010 is for the year 2010.

According to the new methodology of ESA 2010, the Member States of the

European Union would send their Supply, Use and Input-Output tables by the end of

2014, for the years 2010 and 2011.

The set of tables for each EU Member State comprises the following ten

tables: five official tables and five additional tables. The official tables are expressed

either at basic prices and/orpurchasers' prices, having yearly or 5-yearly frequency

of transmission.

The official tables are:

- Supply table at basic prices (SUPbp) with a transformation into purchaser's

prices – yearly;

- Use table at purchasers' prices (USEpp) – yearly;

- Symmetric input-output tables at basic prices for product by product

(SIOT), 5-yearly;

- Symmetric input-output table for domestic output at basic prices (product by

product) (SIOTdom) - 5-yearly;

- Symmetric input-output table for imports at basic prices (product by

product) (SIOTimp) - 5-yearly.

The additional tables are: Use table at basic prices (USEbp), Use table for

domestic output at basic prices (USEdombp), Use table for imports at basic prices

(USEimpbp), emphasizing the imports intra EU and/or intra EA and imports extra

EU/extra EA, Trade and Transport Margins table (TTM), and Taxes Less Subsidies

on products table (TLS).

The ESA 2010 methodology established an extension of the consolidated ta-

bles for environment. Environmental input-output tables by industries and private

households include eight types of air emissions: Carbon dioxide (CO2), Nitrous

oxide (N2O), Methane (CH4), Sulphur oxides (SOx), Nitrogen oxides (NOx),

Ammonia (NH3), Carbon monoxide (CO), Non-methane volatile organic compounds

(NMVOC) (“Technical Documentation on the European consolidated tables for

years 2010 and 2011”, 2014, European Commission, Luxembourg,

http://epp.eurostat.ec.europa.eu).

In the estimation process for the year 2010, the EU countries belong to

different cases defined for the taxonomy of the best practices in the European

transmission program of National Accounts. Case 0 describes the situation in which

all required tables are available for their validation. The cases from 0 to 4 classify

the EU countries by the accomplishing degree of the transmission process. Romania

is in the group of case 0. Until July 2014, Romania was one of the 13 countries