# **_Estimating investment flows_**

# _Estimates for the period 2003 to the present_

For the period after 2002, the steps taken to generate sectoral series for gross fixed capital formation are as follows:

- For the industrial sector, use the industrial enterprise data to measure gross investment in fixed assets measured as the difference between the original value of fixed assets in adjacent years.

- For the service sectors in urban areas, GFCF has been estimated using the fixed asset investment data for outlays on structures and equipment.  Outlays on the asset class “other” have been excluded as they are largely outside the scope of the SNA definition of gross fixed capital formation. No data for the asset type “other” could be found for 2003 and so it was assumed that the share of “other” investment in total fixed asset investment in urban areas was the same in 2003 as in 2004 for all sectors.

- For agriculture, the national data for FAI have been used.

- For the industrial and service sectors in rural areas, the difference between the national and urban FAI data has been added to the urban series as defined above. Since 2011, the extent of this additional investment has fallen to a very low level following a change in definitions used by the NBS. No explanation is available for this change but it may be that the NBS has adopted a functional definition of urban and rural areas (as in the population data) rather than a definition based on the administrative status of the local area. Thus, most industrial investment in rural areas may have been reclassified as being in urban areas, reflecting the population density in the area where the enterprise is located.

- The business sector is estimated as the sum of the four estimates above.

- For the government and infrastructure sectors, the FAI data for urban areas have been used excluding the category “other” investment.

_Estimates for the period 1981 to 2002_ For the period prior to 2003, two different methodologies have been adopted. Between 1981 and 2002, sectoral FAI data have been used as a proxy for gross fixed capital formation without any adjustment, including for the industrial sector. Between 1952 and 1980, data for new capital construction have been used. The growth rate for this series has been used to generate a hypothetical FAI series prior to 1981, as the level of the capital construction series and that for FAI in each sector were different in 1981.

One problem with the data prior to 2003 is that the sectoral definitions used in the published data do not correspond exactly with the definitions used after 2002. Data for FAI in telecommunications are not available prior to 2003. They are included in the transport and telecommunications sector. However, the definition of infrastructure used here excludes telecom investment. A series for FAI in transport has been created by assuming that the share of telecoms in FAI is the same as in capital construction.

In the published official data for the period prior to 1981, data for the capital construction in the public administration sector (government, parties and social organizations) are amalgamated with the sector “other”. According to Chao (1974), the sector “other” refers to all of the “non-productive” investment by state-owned enterprises. Such outlays cover residential and dormitory accommodation, schools, health clinics and hospitals provided by state-owned enterprises. For the period 1959 to 1980, it has been assumed that the capital construction in the public administration sector was half the aggregate amount, based on the share in the first year for which separate data were available. For the 1950s, 30