National Accounts

A quarterly and annual estimation of  gross domestic product (GDP) by sector and industries including growth rates of each economic sector and their contribution to GDP.

National Accounts

National Accounts - Seasonal Adjustment

Cook Islands Statistical Office publishes first time seasonally and calendar adjusted Quarterly National Accounts data

 

Time series data adjusted for seasonal and calendar variations allows for a comparison of periods with their direct preceding ones. That way, changes in the economic development can be detected earlier and necessary economic policy reactions implemented timelier.

Starting from August 2021 onwards, the Cook Islands Statics Office (CISO) will not only publish quarterly GDP series but provide these data also seasonally and calendar adjusted. Time series plagued with seasonal variations – like tourism data - can only be compared meaningful with their respective periods one year before. However, comparing data with periods of the past year can mask important information concerning underlying dynamics.

  Figure 1
Capture1Figure 1 demonstrates that a comparison of the first quarter with the corresponding quarter of the year before shows a growth rate of the economy of +4.2%. If, however, seasonally adjusted data allows for a comparison with the preceding quarter, a downward moving trend which started in the 4th quarter of the previous year can be observed.

Apart from seasonal variations, changes in the calendar over the quarters can influence the time series. This is valid for all holidays which can shift between quarters like eastern. Furthermore, the leap year effect which increases every fourth year the number of days in February is part of the calendar effect like the composition of a month by a varying number of weekends or workdays.

The CISO adjusts these time series for seasonal and calendar variations using econometric methods. Specifically, the internationally recommended TRAMO-SEATS approach is applied as it is implemented in the software package JDemetra+. Due to the nature of this econometric estimation approach, it is not guaranteed that the sum of the quarters adds up precisely to annual totals, as it is the case for unadjusted quarters. Likewise, the sum of adjusted components does not equal exactly higher aggregates. The CISO adjusts for the component mismatch only, by distributing differences between the sum of components and its aggregate proportionally. It should be noted that it is not possible to derive the growth rate of a total year by the quarter-on-quarter growth rates of its four quarters. Figure 2 demonstrates that although every four quarters of a year show no growth when compared to their preceding quarters, their sum can show, nevertheless, a positive growth when compared to the sum of the previous year.

Figure 2  Capture2

 

In order to increase the interpretability of the adjusted time series, the CISO additionally produces a flatter version of the seasonally and calendar adjusted time series which is called Trend-Cycle component. These series evolve smoother as they are cleared for small irregular variations around their trend which can be caused by special short living effects from weather conditions or other events. They are not meant to replace the seasonally and calendar adjusted ones, but to be used in combination in order to make interpretation easier. As the adjustment for seasonal and calendar variations at the very end of the time series requires a forecast of future values, observations for the most recent periods are more prone to revisions than periods in the past. This is valid especially for the trend-cycle component which relies heavily on such forecasts.

The CISO will publish the new data set on its webpage using only a subset for its regular press releases.

Downloads:

pdfSeasonal Adustment Write-Up-2020

xlsxSeasonal Publication Table - 2020