metadata: authors: 0: author: Arrau, Patricio
1: author: Oks, Daniel
count: Mexico
docna: 0: docna: Private saving in Mexico, 1980-90
docty: Policy Research Working Paper
subtopic: Macro-Fiscal Policy,Economic Adjustment and Lending,Public Sector Economics,International Trade and Trade Rules,Inflation,Macroeconomic Management,Public Finance Decentralization and
            Poverty Reduction
teratopic: Environment,Conflict and Development,Finance and Financial Sector Development,Macroeconomics and Economic Growth
abstracts: cdata!: Between 1987 and 1990, Mexico's
            current account and trade balance deteriorated by more than
            US$10 billion. Higher investment accounts only partly for
            this deterioration; nor can it be attributed to the public
            sector. By conventional (unadjusted) measures of private
            saving - the total investment not financed by public or
            foreign savings - private saving did decline sharply between
            1987 and 1990.  But that diagnosis does not hold true when
            private, public, and foreign savings are corrected (as they
            are here) to account for shifts in portfolio composition
            from foreign to domestic assets, for the effects of
            inflation on foreign and domestic interest income (the
            inflation tax), for fluctuations in the real exchange rate,
            and for other factors. Arrau and Oks provide information
            about the components of private saving by asking questions
            such as these: Is consumption more important than disposable
            income in explaining changes in private saving?  What
            components of consumption and disposable income matter most?
            The following are among the conclusions:  When conventional
            measures of private saving are corrected, the recent decline
            in private saving appears less important than it did before.
            Most variations in private saving between 1980 and 1990 are
            ascribable to fluctuations in disposable income.  The sharp
            drop in private saving in 1990 was prompted primarily by a
            decline in disposable income and, less so, by fast-growing consumption.
geo_reg_key: 119228,517191
repnme: repnme: Private saving in Mexico, 1980-90
display_title: Private saving in Mexico, 1980-90
listing_relative_url: /research/1992/02/699756/private-saving-mexico-1980-90
topicv3: Current Account m1326278 1135,Government Expenditure m1326649 1112,Inflation m1326709 0870F4727ACED1CF8525815C00471347,Trade m1326924 698,Balance of Payments m1326965 441
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Environment,Conflict and Development,Finance and Financial Sector Development,Macroeconomics and Economic Growth
origu: International Economics Department
no_of_pages: 50
model_extractions: **Policy Research**

## **Debt and International Finance**

# WPS 861

TI'his paper - a joint product of the Debt **an(i** Intemational Finanice<sup>Division, International Economics</sup> Department, and Country Operations Division,<sup>Country Deparlmenit 1, Latin America and the Caribbean</sup> -- i:. part of a largcr effort in **thc** Bank to identify<sup>extenial and</sup><sup>**internal**factors that affect savings and</sup> investmt;nt in developing countries. Copies of'the<sup>paper are available free from the World Bank, 1818 H</sup> Stretc NW, Washington, DC 20433. Please<sup>conltact Sheilah King- Watson, room S8-040, extension 31047.</sup> (February 1992, 47 pages).

Between 1987 and 1990, Mexico's current account and Lrade balance deteriorated by more than US$10 billion. Higher investment accounts only partly for this deterioration, nor can it be attributed to the public sector. By conventional (unadjusted) measures of private saving -- the total investment not financed by public or - fo`-cig-n savings private saving did decline sharply betweeni 1987 and 1990.

cause for concern than if it stems from noninterest income.

The followinig are among the conclusions of Arrau and Oks:

* Whcni conventional mcasures of private saving **ailC** cot-rected, the recent declinc in private saving appears less importanit tllhzn it did before.

But that diagnosis does not hold true when **Dnivate,** public, and foreign savings are corrected (as they are here) to account for shifts in portfolio composition from loreign to domestic assets, for the effects of inflation on foreign and domestic interest income (the inflation tax), for fluctuations in the real exchange rate, and for other faciors.

Arrau and Oks providc morc informaztion about thc components of private saving than most sludies do, addrcssing such questions<sup>as thc</sup> tollowing: Is consumplion1 more important than disposable income in explaining changes in private saving? What components of consumplion and disposable income matter the most?<sup>If,</sup> for example, the bulk of consumption growth is accounted for by durable consumption in the wake of trade liberalization, the mcasured decline in private saving need not be cause foi concern as it would be for a once-and-for-all stock adjustment in durable goods. On thlc other hand, if the main factor behind **thc** recent declinc in private saving is disposable incomc (rather than conIsumption), it is useIul to identify whlichI component of'disposable income accounits for the dcclinc. If', for example, the declinc in disposable income stcms from a rcduction in **the** domestic public debt service, there may he Icss

* Most variations in private saving between 1980 and 1990 arc ascribable to fluctuations in disposable income. Disposable income fluctu- **aed** consi(dcratblv morc than did private consurn,l-on.

* The sharp drop in private saving in 1990 was prompted primarily by a decline in disposable income and, less so, by f'ast-growing consumptionl.

* Only a quarter of the increase in consumplion in 1988-90 was attributable to increased - consumption of durables which grew almost thrce times faster than consumption of other items but represents only a small share (about<sup>11</sup> percent) of' total consumption.

* Fluctuations in the real exchange rate played an important role in the evolution of public savinig because that exchange ratc influences the real intercst scrvice on foreign debt. Real peso devaluations in 1982 and 1985-86 hurt public finiances anld rcal peso app)reciation later<sup>helped</sup> thcm. StronIg rCial PCSo appreciation in 1988<sup>and,</sup> to a lesser cxtent, in 199(0 reduced real income f'rom private foreign assets, reducing private saving in those years.

Thc Pticy R~ccrch WorTking P;per Ser ies<sup>di~s</sup> nats the' I indinigs ofsx o k uiidV. rva! in ittic Bank. An ohjcetix'c of the scries is to get th 'se findings **0UI** quickh, even if<sup>presentationsireless</sup> **Ihaii** fUlly **1f** polishid Thie linditip, interpretations, and conclusion:. in these papers (lo not necescaril\ repreM.nt<sup>oicsiC Bankpolic\.</sup> Produced by the Policy R.scaTch Diseniination Center
**PRIVA2Z SAVING IX mExICO, 1580-90**

# Contents

|1. Motivation and Summary|p.3|
|---|---|
|2. Methodological Issues and Measurement Problems|p.5|
|2.1 Methodological Issues|p.5|
|2.2 Measurement Problems|p.6|
|2.2.1 Balance of Payments Data<br>2.2.2 Fiscal Data<br>2.2.3 National Accounts Data|p.6<br>p.9<br>p.10|
|2.3 Durable Consumption|p.11|
|2.4 Data|p.12|
|3. Private Saving Performance, 1980-90|p.13|
|3.1 Saving Rates in Mexico, 1980-90|p.<sup>1 3</sup>|
|3.2 Comparison with the Conventional Measure of Private Saving|p.19|
|3.3 Disaggregation of Consumption Expenditures|p.20|
|3.4 Dissagregation of Disposable Income|p.21|
|References|p.22|

Annex A: A Revision of National Accounting Procedures in Mexico Annex B: Statistical Annex Annex C: Quarterly and Monthly Consumption Series in Mexico We have bonefitted from comments by Klaus Schmidt-Hebbel and Sweder van Wijabergen. We are very grateful to officials from the Government of Mexico for facilitating the data of this study and for helpful discussions. Heinz Rudulph and Rebecca Brideau provided able research assistance.
3

# 1. Motivation and Summatr

Between 1987 and 1990 Mexico's current account/trade balance deteriorated more than US$ 10 billion. The extent to which this denerioration is worrisome hinges, of course, on the underlying factors. If it was prompted by a surge in investment there need be no big cause for concern as the trade deterioration could then be regarded as temporary. The evidence indeed shows that, despite the severe cutbacks in public investment, there was a sizable surge in fixed investment in the last three yaars, particularly in l990 when fixed investment was up 13.5% _.n real terms compared to the 1989 level, or 28% above the 1987 level. However, higher investment only accounts partially for the recent current account deterioration. The current account deterioration cannot be ascribed to the public sector. Nominal public saving rose more than enough to finance increased investment implying that the entire current account deterioration could be ascribed to declining private saving. The conventional or unadjusted measure of private saving, i.e., the portion of aggregate investment not financed by public or foreign saving, has it fact declined sharply between 1987 and 1990. 1 Horqever, when properly measuring private, public and foreign saving, the above diagnosis no longer holds. Private saving in 1990 was actually higher than in 1987 and public saving lower. And although recently both the conventional and proposed measures of private saving move in the same direction, i.e., a sharp decline in 1990, the conventional measure alarmingly shows a private saving-GDP ratio at its lowest level since 1981 while the proposed measure of private saving reveals that in 1990 the ratio was just below the decade's average.

In this paper we compute series of private saving which incorporate a variety of corrections usually not considered in conventional measures. The main objective is to provide an accurate measure of private saving and its components. One key measurement problem is the measurement of income from foreign assets, which is usually misrepresented in the official current account of Mexico. We employ estimates of income from foreign assets which increase the measure of disposable income by almost 2 percentage points of GDP. The proposed private saving measure fully captures the impact of the recent shift in portfolio composition from foreign to domestic assets on private agent's income structure.

Another key measurement issue is the adjustment of foreign and domestic interest payments for inflation. In a high inflation country as Mexico this adjustment is more than relevant. For example, the inflation component of the domestic public interest service alone represented more than 20 percentage points of GDP in 1987. And the inflation tax on base money, although partly compensated by interest payments on commercial banks deposits at the central bank, shrunk from arond 7% of GDP in 1982 to about 1% in 1989-90. In turn, the inflationary adjustment of foreign debt service and on income from foreign private assets permits measuring accurately the impact of the recent real peso appreciation over the foreign debt service burden and real income from foreign assets.

Several other important measurement issues are discussed. For example, to ensure consistency with national accounts data those items of the balance of payments and iiscal accounts which were available as national accounts data t The conventional measure is derived directly from national accounts as the difference between disposable income and consumption. However, as we show in section 2 it is equivalent, once data consistency is ensured, to the portion of aggregate investment not financed by public or foreign saving.
4 were amployed, e.g., the trade balance and current government expenditure. In particular, the cu.rent government expenditure measure from national accounts tsnds to be larger than the fiscal accounts measure because the latter computes purchases of military equipment as investment whereas the former doesn't. Further consistency problems arise because the fiscal accounts measure of public investmant are used as fiscal accounts treats purchases of assets as investment whereas national accounts properly considers these purchases below the line of financing.

A useful feature of our study is that it provides information about private saving components. Is consumption more important than disposable income to explain changes in private saving? And what components of consumption/disposable income matter most? If, for example, the bulk of consumption growth is accounted for by durable consumption in the wake of trade liberalization, the measured decline in private saving need not be cause for concern as it would be a once-and-for-all stock-adjustment in durable goods. On the other hand, if the main factor behind the recent decline in private saving is disposable income (rather than consumption) it is useful to identify which component of disposable income accounts for the decline. If, for example, the decline in disposable income stems from a reduction in the domestic public debt service, there may be less cause for concern than if it stems from non-interest income.

# Several conclusions can be extracted from revised measurements.

(i) Due to the inflation-adjustment of domestic and foreign interest income and the inclusion of the inflation tax in our measure the conventional private saving measure is systematically higher than the one proposed. The patterns of private saving suggested by the two measures is also qualitatively different. In particular, the recent decline in private saving appears relatively less important than conventional measures of private saving suggest.

(ii) Most of the variability of private saving over the 1980-90 period is ascribable to fluctuations of disposable income, i.e., disposable income fluctuated considerably more than private consumption. In turn, most of the Ziuctuation of disposable income represents transfers between public and private sectors which account for much of the complementarity observed between public and private saving rates. Public saving performance was strongly influenced by external ee%"nts such as the 1981-82 debt crisis and the 1985-86 oil crisis.

(iii) In particulax. the sharp drop in private saving observed in 1990 was prompted primarily by the decline in disposable income and, to a lesser extent, by fast growing consumption. The decline in disposable income was explained by a sharp drop in the real domestic public debt service and, to a lesser degree, by a reduction in real income from foreign assets (which, in turn, stemmed from lower external interest rates and real peso appreciation). However, the 1990 drop in public debt service was preceded by a bigger increase in 1988-89 so that disposable income (and private saving) in 1990 was still substantially above the 1987 level. Another important factor behind the upward trend in disposable income prior to 1990 was the sharp drop in the inflation tax.

(iv) Only one-quarter of the increase in consumption in 1988-90 was due to the increase in durable consumption which, nevertheless, grew almost three times faster than the other consumption items. The reason is that durable consumption represents a small share of total consumption; about 11%.

(v) Fluctuations in the real exchange rate played an important role in the evolution of public saving, by influencing the real interest service on foreign debt, and of private saving, by influencing income from foreign
5 assets. In particular, the real peso devaluations in 1982 and<sup>in 1985-86</sup> exerted an adverse impact on public finances while the subsequent<sup>real peso</sup> appreciat4on exerted the opposite effect thereafter. The impact<sup>of real</sup> exchange rate fluctuations on private saving increased during the decade<sup>along</sup> with the growth in the stock of private foreign assets. As a consequence,<sup>the</sup> strong real peso appreciation in 1988 and, to a lesser extent, in<sup>1990 reduced</sup> real income -from private foreign assets lowering private saving in<sup>those</sup> years. As eutimated Lncome from foreign private assets has come close to interest on foreign debt real exchange rate fluctuations will tend to have a neutral impact on domestic saving.

(vi) Finally, a very important sub-product of our study is to make available good quality series on consumption data, both quarterly and<sup>monthly.</sup> Consumption series are in great scarcity in LDC's; and the series<sup>provided</sup> here for Mexico are not available from any other developing country. We include extensive appendices with information on national account methodology in Mexico and with disaggregated series of consumption.

# 2. Methodolouical Issues and Measurement Problems

In subsection 2.1 we present the general framework to compute private saving. n subsection 2.2 we discuss several measurement problems associated to the computation. The measurement problems arise from the three<sup>sources of</sup> data employed: the balance of payments, the fiscal accounts and the<sup>national</sup> accounts. In subsection 2.3 we discuss the role of durable consumption in<sup>the</sup> measure of private saving. Data sources and calculation procedures<sup>are</sup> presented in subsection 2.4.

# 2.1 Methodolocical Issues

# We start from the traditional macroeconomic identity:

# Y=C+G+I+X-M

(1) where Y is GDP, C is private consumption, 0 is government consumption,<sup>I is</sup> gross investment (both public investment, Ip, and private investment,<sup>Xpr;</sup> where private investment includes foreign investment), and X - M is net exports of goods and non-factor services.

By adding and rearranging terms, the identity can be expressed as Private Saving Ip+ -,; = (Y-NFS+rB+iF-iD,, -T-OR-C-w*BM) Private Saving **+** (T+w*BM - OR-G-rB-iD,) Public Saving (2) **+** (M-I+iDr+iD^,-iF+NFS) Foreign Saving

# where the added terms aret

rB: income from claims against the government (real interest<sup>rate</sup> times stock of national or domestic debt) iF: income from private assets held abroad (real foreign interest<sup>rate</sup> times stock of assets held abroad) T: direct and indirect taxes
# £

- ORs other governsent revenues (transfers from public enterprises, etc.)

- kDpu: interest payments for not external public debt (stock of external public debt less official reserves/assots times rea4 foreign interest rate)

- iDpr: interest payments on extarnal private debt (stock of external private debt times real foreign interest rate)

- NFS: net other factor services including workers, remittances and profit remittances (vorkers' remittances from Mexicans abroad reduces NFS, while profit remittances from foreign companies in Mexico increases NFS). In this measure we also include all other current account items not included elsewhere (e.g. transfers from abro.ad, etc.)

- w*BM: inflation tax (net of interest paid by central bank oA commercial bank deposits)

As we can see from identity (2) there are two ways of computing private saving. First, we can compute private saving directly by subtracting private consumption from disposable income, i.e., the first parenthesis on the right hand side of (2). Second, we can compute private saving indirectly as the difference between aggregate investment and the sum of public saving and foreign saving (current account deficit). Both measures would be identical if we use in identity (2) the same items from national accounts from identity (1). Howeve%-, it is common to compute private saving using the indirect measure using implicitly the government budget definition for G as well as the balance of payments figures for X-M (trade balance of goods and non-factor services). The convenience of the indirect procedure is that the items of the disposable income series in the first parenthesis in the righi. hand side of identity (2) do not have to be computed explicitly. The inconvenie-ce stems precisely from the fact that fiscal accounts and national accounts use incompatible definitions of current and capital expenditures.

## 2.2 Measurement Problems.

The three sources of data required for identity (2) are the balance of payments, the government budget and the national accounts. Several specific measurament problems associated to these sources are discussed in turn. We close the section with a discussion of the role of durable consumption in a measure of private saving.

## 2.2.1 Balance of Payments Data.

The official current dccount balance does not adequately measure real national financial dissaving in Mexico for at least four reasons: i) the measurement of income from foreign assets is not based on a comprehensive measure of the stock of foreign assets; ii) the official methodology employed to calculate worker's remittances until 1988 underestimates remittances; iii) capital gains induced by inflation are neglected; and iv) the difference in statistical basis between balance of payments data and national accounts data, e.g., the national accounts implicitly converts foreign currency units into domestic currency units at a trade-weighted exchange rate. In order to obtain a current account balance which would allow us to estimate private saving properly we deal in turn with factors i) to iii; factor iv) is discussed in sections 2.2.3 and 2.4.

## Other possible sources of inadequate current account measurement not
7 dealt with **here** are trade misinvoicing and capital gains derived from crosscurr-ncy fluctuations. Although data on trade misinvoicing was available coverage was incomplete and some numbers appeared doubtful. On tLe other hand, capital gains/losses from cross-currency fluctuations could only have been calculated fce toreign debt as the currency composition of private foreign **assets** Ls unknown.

# i) Income from Poreign Assets.

Income from private foreign assets requires knowledge of the stock of wealth held by domestic residents abroad. A direct measurement of this stock **is** unavailable except for deposits of Mexicans in foreign banks. This is clearly incomplete as it does not measure bond holdings, equity and real estate assets held by Mexicans abroad. Neither does it measure Mexican's bank deposits abroad held by off-shore companies. To remedy this problem we propose to use an indirect estimate of the stock of foreign assets hold by Mexicans obtained by Brideau, Eggerstedt and van Wijnbergen (1991). aw private capital outflows were derived residually as the difference between, on the one hand, the sum of external debt and DFI flows, and on the other hand, the sum of the current account deficit (excluding interest retained !broad), the increase in net reserves and the increase in other public foreign assets. This flow measure was completed by incorporating an unofficial estimate of additional worker's remittances (compared to the official figure) before 1988. The total private capital outflow was then estimatad by adding the new flow adjusted for worker's remittances to reinvested income from foreign assets. It was assumed that 100% of the income was reinvested and that the rate of return was explained two-thirds by the US CD rate and one-third by the threemonth LIBOR rate. The stock, in turn, can be obtained by adding tRe total flow to the stock of the previous period.

# ii) Worker's Remittances.

In late 1990 the government revised the az+-hodology to estimate annual worker's remittances. The new estimate, which implied an upwards revision of about US$ 1.5 billion, was only reported for 1989 and 1990. Thus, it is likely that worker's remittances prior to 1989 are underestimated. If this is the case, the current account deficit would be overestimated and capital flight underestimated. Preliminary and yet unofficial estimates of worker's remittances reported in Table 1 were used to adjust the current account balance.

Taile 1. Wo,:.terls Remittances Adjustment.

|Year|Official|Adjusted|Change|
|---|---|---|---|
|1980|140|569|429|
|1981|128|692|564|
|1982|98|690|591|
|1983|111|824|712|
|1984|176|943|767|
|1985|173|971|797|
|1986|180|.082|901|
|1987|207|1237|1030|
|1988|209|1526|1316|
# iii) Adiustment for Inflation.

in order to estimate real private and public saving<sup>we raquir* a measure</sup> of real/inflation-adjusted frreign financial<sup>*aving:s. This, in turn, requires</sup> adjusting **the** financi4s components ot the current<sup>account for inflation, i.e.,</sup> computing reel interest receipts/payments rather<sup>than nominal. Since domestic</sup> goods **are** the chosen numeraire, i.e., we are<sup>concerned with the value of</sup> **ft.** aigners. not claims in terms of Mexican real resources,<sup>the real interest</sup> rat& on foreign **assets** (or on foreign debt)<sup>is obtained deflating the nominal</sup> interest rate, which depends on both the foreign<sup>interest rate and the rate of</sup> peso devaluation, by domestic inflation. More<sup>specifically:</sup> (3) r = [(1 + it)*(l + d)/(l + **i)]** - I

- where: r is the real interest rate on foreign assets/liabilities it is the foreign nominal interest rate d **is** the rate of devaluation between the beginning<sup>and the and</sup> of the period of the exchange rate

- w is the domeztic rate of inflation

# The first term in brackets in equation (3) can<sup>be decomposed into:</sup>

- (3) r = i<sup>t</sup> *[(l + d)/(1 + r)] + ((1 + d)/(l + w)] - 1

The first term on the right hand side measures<sup>the nominal interest (the</sup> foreign interest rate times one plus the rate of<sup>devaluation) in units of</sup> beginning of the period, i.e., discounted by the<sup>rate of inflation. The</sup> second and third terms measure the capital gain/loss component; e.g., if the rate of devaluation falls short of the rate of<sup>inflation thereis</sup> a capital gain. It is clear from equation (3) that r is a good<sup>measure of the real cost</sup> of eebt only if all the interest is paid at the end of the period, since d and _i_ must measure end of period d valuation and inflation<sup>rates for the capital</sup> gain/loss component to make sense.

Xn practice, though, interest payments on foreign debt<sup>are spread</sup> throughout the year. Thus, if there is a devaluation at the end of the period the interest cost of servicing debt is likely<sup>to be overestimated by (3) since</sup> most interest payments were made at a pre-devaluation<sup>exchange rate. When</sup> interest payments are spread throughout the year<sup>a better measure of the real</sup> cost of debt _(e)_ is obtained by replacing<sup>the end of period devaluation and</sup> inflation rates in the first component of (3')<sup>by the average devaluation and</sup> inflation rates with respect to the beginning<sup>of the period:</sup> (4) _e =_ if*((1 + d-)/(l + w-)] + ((1 + d)/(l + **w)]** - 1

# where: d- and _if_ are the average devaluation and inflaticn rate with respect to the beginning of the period

Equation (4) was actually used to estimate the<sup>real interest on foreign</sup> debt. 2 Note that since the foreign nominal interest rate has as well a<sup>foreign</sup> inflation component we could have -ewritten<sup>(3)</sup><sup>**as:**</sup> 2 The same procedure was not applied to income from foreign assets because it was assumed that all interest on foreign<sup>assets was reinvested.</sup>
## (5) r _(+_ rt)*(I + )*(I + d)/(l +y) - 1

## where the f superscript indicates foreign

So that r is made up of two components: re, _whi_ h is the real foreign interest rate, and (1 + :r)*(1 + d)/(l + a), which is the real exchange rate. Thus, for example, a rea, pbsO devaluation increases the burden of servicing foreign debt and a real peso appreciation reduces it.

## 2.2.2 Fiscal Data.

Public saving is measured as the difference between current revenue and current expenditure. However, this measurement of public sector saving is inadequate if based on fiscal accounts data because the latter considers as capital expenditure items which are actually current expenditure (point i)). Besides, when computing real public saving, this measure does .ot capture capital gains derived from the inflation-erosion of domestic and foreign financial liabilities (point ii)) nor from the inflation tAx (point iii)).

## i) current Exoenditure Adiustment.

Several items which fiscal accounts compute as public investment are not strictly investment from a national accounts perspective, i.e., they don't add to the existing capital stock. These items have to be reclassified as current public expenditure which, in turn, implies lower public saving. These items are mainly military expenditure and some federal transfers which do not translate into fixed capital formation. Since the national accounts properly compute these items as current govern-ent expenditure we use national accounts data of public expenditure to estimate public saving. 3

## ii) Canital Gains From Inflatic,n on Financial Liabilities.

Nominal fiscal deficits are a misleading measure of re.l public sector financial dissaving because they don't account for the loss in real value of domestic and foreign public debt which is due to inflation. The inflationerosion of the real value of nominal debt should, thus, be subtracted from the nominal deficit. This is usually done with domestic debt, leading to the so called operational or inflation-adjusted fiscal deficit, but not with foreign debt. Only the real interest rate on domestic and foreign debt was computed as a fiscal expense. In the case of foreign debt the real interest rate was calculated as shown in equation (4) in the previous section; the real interest rate on domestic debt was obtained as follows:

# (6) r [(1 ' i)/(l + - 1I)1

## where: r (i) are the domestic real (nominal) i terest rate s _is_ the domestic rate of inflation

To avoid the problem that arose with the real foreign interest rate (average inflation different from end of period inflation) do 3astic real interast payments (and the inflation tax discussed below) were estimated _3_ Fiscal accounts **aso** compute financial investments and purchases of land/real estate as investment. Although these are clearly transactions below the line of financing, i.e., asset swaps, and thus are not public investment from a national account perspective, they don't affect our estimate of public saving since they donet require reclassifying items to current expenditure (only current expenditures are needed to estimate public saving).
mutiplying bhe above real interest rates<sup>and the beginning of the month stocks</sup> of debt (base money in the case of the inflation<sup>tax). Annual real interest</sup> payments were then obtained adding up monthly<sup>interest payments.</sup>

## iii) Inflation TM.

Finally, the inflation-erosion of the stock<sup>of base money</sup><sup>**(a**wealth</sup> transfer to the public sector) was computed<sup>as fiscal rev-nue, i.e., the</sup> inflation tax. Since for most of the period<sup>commercial bank deposits at the</sup> Bank of Monico (a major component of the<sup>stock of base money) perceived an</sup> interest the inflation taw revenue was actually less<sup>than the loss in real</sup> value due to inflation of the initial stock<sup>of base money. The actual</sup> procedure followed to * ,imate the inflation<sup>tax rate (applied over the</sup> beginning of period stock of base money)<sup>**is:**</sup>

# (7) WM . [(l + iB<sup>M</sup> )/(1 + ir)1 - 1

where: *OBM is the inflation tax rats iBM is the nominal interest rate on average<sup>perceived by one</sup> unit of base money

## 2.2.3 National Accounts Data

The most difficult issue in the computation<sup>of national accounts is the</sup> distribution of supply into its demand<sup>components, e.g., consumption,</sup> investment, exports and stock accumulation.<sup>As we discuss below and, in more</sup> detail, in Annex A, the problems which<sup>arise in the measurement of aggregate</sup> demand components can be quite crucial<sup>for evaluating private saving and, in</sup> particular, for the choice of data frequency<sup>employed. From the discussion</sup> below, we conclude that the national accounts<sup>measure of both government</sup> consumption and the resource balance<sup>are relatively accurate while fixed</sup> invistment, private consumption and stock<sup>accumulation are relatively more</sup> noisy (stock accumulation being the more noisy<sup>as it generally contains a</sup> residual component) and strongly dependent<sup>on the quality of surveys of sales</sup> and stocks. Since surveys on sales are less complete for qrarterly<sup>data</sup> series (which, thus, are more noisy)<sup>we only discuss annual data.</sup> One general problem with the national<sup>account system in Mexico is that</sup> its base is probably outdated. Fixed coefficients<sup>employed to estimate</sup> current value-added are based on the 1980<sup>input-output matrix. Given the</sup> process of trade liberalization that Mexico<sup>has undergone in the 1980s,</sup> particularly, after 1985, the coefficients<sup>of value-added to value of</sup> production are likely to have changed significantly.<sup>For example, the</sup> substitution of imported inputs for domestic<sup>value-added in the production</sup> process is likely to have reduced the coefficient<sup>ofactual value-added to</sup> value of production in the industrial<sup>sector (see Annex A for a more detailed</sup> discussion of this point). In any case,<sup>this is a source of error in the</sup> measurement of savinq that we cannot do<sup>anything about.</sup> As mentioned, 'he most difficult issue<sup>in the computation of national</sup> accounts is the distribution of supply<sup>into its demand components. The usual</sup> problem with the distribution of demand<sup>components is that the relevant</sup> information is generally not available.<sup>Therefore, some assumptions have to</sup> be made. The balance of payments accounts<sup>normally provide fairly good</sup> information on imports and exports. Except<sup>for the exchange rate measurement</sup> difficulties of transforming foreign denominated<sup>series into local currency</sup> accounts, these series are fairly accurate. In many<sup>cases assigning total</sup> supply to the demand components can be facilitated<sup>by doing the supply/demand</sup> compatibilization at a level as disaggregated<sup>as possible. For instance,if</sup> a firm produces mostly machinery, it is clear<sup>that production should be</sup>
11 assigned to investment rather than consumption nowever, for several othar sectors _tho_ prok ems of assigning total supply into its demand components is more difficult. The more serious problems arise in those sectors which products can go to several different demand compenents, particularly, when the fixed coefficients are iikely to be out of date as in Mexico. Most food production, for example, can go to internediate demaind, private consumption, stock accumulation (if storable) and orports.

While the good characteristics help assigning the good tc investment and consumption, something else is required to discriminate when a good goes to stock accumulation or is actually invested or consumed. That usually requires good-quality survey data on sales at the sector or company level. The difference between what is produced and what is sold is the stock accumulation. The lack of good sales information normally implies having to use fixed distribution coofficient. from the base period. The coefficients are mora likely to be stable or loss variable for consumption aud investment, and therefore stock accumulation is often thcs residual variable. Surveys on sales and stocks are therefore the critical input for e good d.stribution between investment or consumption and stock accumulation. Surveys on salis are less complete for quarterly data series which, thus, are mora noisy than annual data. In this i port we therefore only employ annual data.

# 2.3 Durable Consumption

One fundamental question one wants to address when studying private saving and consumption series is to know whether any change in the rate of private wealth accumulation is permanent or transitory. The implicatioAs for public policy and the economy in general are dramatically different if such an increase is permanent or transitory. A permanent increase in consumption would not raise much concoin if based in a permanent increase in income, while it would be fairly unwise if the charge is due to misinterpretation (as permanent) of a transitory shock in income. However, because it is SO difficult to disentangle permanent and transitory shocks from income, a large decrease in saving rates (increase in consumption) is normally viewed with concern.

However, there is one case when it is rather easy to judge that<sup>an</sup> increase in consu'iption is transitory and therefore there should not be much policy concera, and that is when most of the incroase is in durable goods in the wake of a trade liberalization (as in Mexico8s). Because prior to trade liberalization demand for durable goods may have been repressed, through quotas, once trade is liberalized a sudden once-and-for-all increase in the stock of durable consumption is lkel7 to take place. Consumer durable imports may alwo overshoot if agents expect a reversal of trade liberal iation (the increase in demand for imported consumer durables being linked to expected capital gains from the policy reversal).

Alternatively, we could think of durable expenditures as investment expenditures and ascribe to consumption only a service flow associated to the stock of durable g;oods. In the next section we will consider the durable-nondurable decomposition when interpreting the movement of private saving rates in Mexico.

# 2.4 Data.

All raw variables employed in this study are listed in Annex P. All
12 official national account items from identity<sup>(1) were employed, and therefore</sup> the indirect **as** well as direct measure of<sup>private saving (see section 1) are</sup> identical. All nominal variables in identity<sup>(2) not included in identity (1)</sup> were deflated by the GDP deflator. All saving<sup>rates are calculated in both</sup> current and 1980 pesos. Data sources and adjustment<sup>procedures are described</sup> below.

National Account (NAI Aagregates. The data<sup>source</sup><sup>**is**INEGI (National</sup> Institute of Statistics) and corresponds to<sup>gross aggregate investment, i.e.,</sup> includes inventory accuaulation. INEGI reports<sup>the series in current pesos</sup> and in constant pesos of 1980.

Balance of Payments (SOP) AQgreqates. The<sup>principal BOP data source is</sup> Bank of Mexico. However, the resource balance employed<sup>in identity (2) is a</sup> NA aggregate. The source for the stock<sup>of foreign private assets is Brideau,</sup> Eggerestedt and van Wijubergen (1991). The<sup>current account figures are based</sup> on revised, but yet unofficial, estimates of worker's<sup>remittances prior to</sup> 1988 (see Table 1).

Net other factor services (NFS) was obtained<sup>as follows:</sup>

- (8) NFS - - [CACC - iFo . iDn + _(X-X))_

- where: CACC is the current account<sup>adjusted for estimated worker's</sup> remittances

- iFo is the official figure of interest retained<sup>abroad</sup> iDn is nominal interest on foreign debt<sup>(net of central bank</sup> reserves)

- M-X is the BOP trade deficit

All flow variables originally in US dollars<sup>were converted to nominal</sup> pesos employing the average commercial exchange<sup>ra.te ("de flotacion controlada</sup> de equilibrio") except for the resource balance<sup>which was available in pesos</sup> from national accounts source and interest<sup>payments/receipts.</sup> The terms iDpr and iDpu in identity (2) were<sup>obtained multiplying the</sup> share of private sector/public sector foreign debt in total foreign debt by the term iD. The terms iF and iD (real foreign interest payments/receipts) were calculated as the product of: the estimated<sup>real interesc rates (see</sup> equations (t) and (4) in subsection 2.2.2),<sup>the beginning of period debt/asset</sup> stocks measiured in US dollars and the beginning<sup>of period commercial exchange</sup> rate.

Fisel Accounts (FA) Aggregates. The<sup>principal</sup> data source for FA is Bank of Mexico. However, current government<sup>expenditures (excluding interest)</sup> employed in identity (2) is a NA aggregate. Domestic<sup>debt stocks correspond</sup> to the non-financial public sector consolidated<sup>with the Bank of Mexico and</sup> the Development Banks and is reported in the<sup>1990 Annual Report of the Bank of</sup> Mexico ("Deuda Consolidada con Banco de Mexico").<sup>Prior to 1983 this measure</sup> was not available and so we employed the consolidated<sup>debt of the non-</sup> financial public sector and all the financial system<sup>("metodologia</sup> consolidada").

Domestic real interest payments and the inflation<sup>tax were estimated</sup> mutiplying real interest rates, obtained<sup>following the procedure described in</sup> subsectio 2.2.2., by the beginning of the month<sup>stocks of debt and base</sup> money. Annual eo1 interest payments are then obtained<sup>adding up monthly</sup> interest pAyments. Lack of monthly data impeded performing the same procedure with foreign public debt. The annual nominal interest rate on base money (equation (7)) was estimated as the ratio of interest paid by the Bank of Mexico (accumulated to December) and the average<sup>annual stock of base money.</sup> The monthly rate was the corresponding cumulative<sup>monthly rate that yielded</sup>
13 the just described annual rate. The annual rate for 1980 was<sup>assumed to be</sup> equal to the 1981 rate (data on interest paid by the Bank<sup>of Mexico to banks</sup> in 1980 was not available).

The term other government revenues (OR) was obtained as followss

## (9) OR = EcBal + Ipu + G + iB + iDpun - T

where: EcBal is the fiscal balance Ipu in public investment G is current government expenditure (FA source) iB is nominal interest on domestic debt iDpun is nominal intorest on external public<sup>debt</sup> T is tax revenue

# 3. Saving Rates in Mexico. 1980-90

In subsection 3.1 we compute the items in identity (2)<sup>and assess saving</sup> performance over the 1980-90 period. A comparison<sup>between our saving measure</sup> and the conventional measure is made in subsection<sup>3.2. Inspection of saving</sup> measures reveals a high degree of complementarity between<sup>public and private</sup> saving throughout the decade in both the proposed and<sup>cenventional measures.</sup> However, it becomes difficult to interpret this complementarity<sup>without a</sup> closer look at the disaggregated items in both private<sup>and public savings.</sup> Thus, we analyze the behavior of private saving<sup>components: private</sup> consumption, in subsection 3.2, and disposable income, in subsection<sup>3.3.</sup>

# 3.1 Savina Performance in 1980-1990.

Figures 1 and 2 show our measures of private saving as<sup>a percentage of</sup> GDP in 1980 pesos and in current pesos respectively. Some important differences between the figures in current and real pesos<sup>arise after 1985;</sup> these differences stei from changes in relative prices<sup>brought about by trade</sup> liberalization. In the subsequent discussion we focus<sup>on the saving measures</sup> in constant pesos (Figure 1P.

The large flow of foreign finance that Mexico received in the<sup>early</sup> 1980s, which mainly financed public sector oil investments, came to an abrupt end in 1982 (Figure 3). As the debt crisis unfolded<sup>foreign saving contracted</sup> sharply prompting an equally drastic increase in<sup>public saving (Figure 1).</sup> While higher public saving stemmed primarily from<sup>an increase in revenue,</sup> higher public tariffs until the mid 1980s and higher<sup>tax revenue towards the</sup> end of the decade (respectively OR and T in Figure 4), it<sup>also relied heavily</sup> on inflation-driven wealth transfers (Figure 5). All this,<sup>of course,</sup> affected adversely private saving. Lower investment<sup>and the partial recovery</sup> of domestic saving came along with a sizable accumulation<sup>of foreign assets by</sup> the private sector. These assets eventually played<sup>an important role in the</sup> private sector income structure (Figure 6).
.}~ **~** ~~~~1 <!-- Start of picture text --> PRIVATE, PUBLIC AND FOREIGN SAVING.<br>tin 1980 pesos as % of GOP)<br>0.25_ ..<br>0.2-<br>0.15 ..<br>IDI_ 0.~~~~~~~e.<br>1980 19B1 1982 1983 1184 19B5198861987 19S881989 1990<br>-m PrivatoWavng -4- PiiEo Sm*g -'K- Foredgi So'hg<br><!-- End of picture text -->

**Figure** 1

<!-- Start of picture text --> PRIVATE, PUBLIC AND FOREIGN SAVING.<br>(in current pesos as X of GDP)<br>0.25<br>0.2-<br>0.1I5<br>0.15<br>50.05.<br>-0.0<br>-0.I<br>19801981 1982 1983t84 195519B6 19871988 1989 1990<br>ye".<br>1- Prtrvoh Stea Pk S4ing -i-Fr.Im Saing<br>Figure 2<br><!-- End of picture text -->
15 <!-- Start of picture text --> DOMESTIC SAVING AND JVESTkNT.<br>(in 1980 pesos as % of GOP)<br>0.35<br>0.3<br>0.25<br>K 0.2 ,<br>0.15.<br>0.1<br>1980 198t 1982 t983 19184 1985 1I86 1987 198 1989 1990<br>--- Ae +- OomA lc Svg I<br><!-- End of picture text -->

**Figure 3**

<!-- Start of picture text --> OISPOSABLE INCOME COIONENTS.<br>(in 1980 pesos as % of GDP)<br>0.08<br>0.06<br>0.04<br>0.02<br>-0.02<br>-0.04<br>-0.06 -<br>1960 I9It 1982 198319841985 1986 1987 1188 I989 I990<br>Ye"<br>-r i' -F-a)<br>... ~ ~~~.<br><!-- End of picture text -->

**Figure 4 a)**
16 <!-- Start of picture text --> DISPOSABLE INCOME COPONENTS.<br>(in 1980 pesos as % of GDP)<br>0-<br>-0.02<br>-0.04<br>~-0.06<br>X-00<br>-0.14<br>1980 19Bt 1982 1983191841915 1986 1987 19188 1989 1990<br>y~.<br>r-T- - i- -NFS<br><!-- End of picture text --> <!-- Start of picture text --> Figure 4 b)<br><!-- End of picture text --> <!-- Start of picture text --> INFLATION-ORIVEN DOMESTIC TRANSFERS<br>(in 1980 pesos as % of GDP)<br>0.Z5.<br>0.15<br>0.05<br>0<br>198019811982 198319841985 9881987198819891990<br>Do_s_k ODbi -Cl hkln Tax<br><!-- End of picture text --> Figure 5
17 <!-- Start of picture text --> PROPOSED AND OCFIC1AL WASURES OF<br>INTEREST ON PRIVATE FOREIGN ASSETS<br>6000-<br>40:00<br>3000<br>200D<br>1000<br>0.<br>1S80 19B11982 19831984 1985 tS86 1987 19881989 1990<br>yew<br>lProposed Ofd<br><!-- End of picture text --> Figure 6 The drop in domestic and, in particular,<sup>public savingin1985-86 was by</sup> and large a temporary phenomenon: it<sup>was a consequence of the collapse in oil</sup> prices and was more than offset in<sup>later years through a deepening of the non-</sup> oil primary fiscal surplus. While foreign<sup>saving was clearly influenced by</sup> external events, it dropped after the debt<sup>crisis and it rose with the</sup> collapse of oil prices in the mid 1980s,<sup>it was as well strongly influenced by</sup> real exchange rate fluctuations. As Figure<sup>7 illustrates, the real peso</sup> devaluations in 1982 and in 1985-86 exerted<sup>an adverse impact on public</sup> finances while the subsequent real peso appreciation<sup>exerted the opposite</sup> effect in the late 1980s.

Private saving fluctuated substantially<sup>during the period. Figure 1</sup> even suggests a cyclical pattern. An interesting<sup>feature, as Figure 8</sup> illustrates, is that fluctuations in the private<sup>saving rate stem primarily</sup> from fluctuations in disposable income;<sup>private consumption also oscillates,</sup> lagging somewhat in response to changes in<sup>disposable income, but within a</sup> much narrower band. As mentioned, mucb of<sup>the variability in disposable</sup> income resulted from public sector adjustments<sup>to the debt and oil crisis. A</sup> more dissaggregated analysis of private saving,<sup>however, is left to</sup> subsections 3.3. and 3.4 where we examine the<sup>performance of consumption and</sup> disposable income sub-components.
18 <!-- Start of picture text --> REAL EXCHANGE RATE, FOREIGN DEBT<br>SERVICE AND INCOLE FROM FOREIGN ASSETS<br>0.3<br>0.2.<br>0.15.<br>0.1 -<br>O..~5<br>-0.05<br>-0.15<br>19801981198219I8S398419859I8651987tSBl2a9gitO<br>ye"<br>R Red Exc. Rate ep -* PtAilc h. ServTce -w Mt. Pv.For.As<br><!-- End of picture text --> Figure 7 <!-- Start of picture text --> DISPOSABLE INCOME AND CONSUMPTION.<br>(in 1980 pesos os % of GOP)<br>0.96<br>0.85-<br>0.8 -~/\<br>80.75-<br>0.7<br>0.65<br>0.6 1980198119821983 841tS5 tS66t1987 tS88 1989 tS90<br>ye"<br>Figur d8*os me C _ l<br><!-- End of picture text --> Yrigure 8
19

# 3.2 Comparison with the Conventional

# Measure of Private Savina.

Despite the sharp decline in private saving<sup>observed in 1990 at 15% the</sup> private saving rate is somewhat below the average<sup>of the decade but well above</sup> its laws in 1983 and 1987. This is in sharp contrast with what the conventional measure of private saving suggests (Figure 9):<sup>according to this</sup> measure private saving rates in 1990 are<sup>at their lowest level since 1981.</sup> The conventional private saving measure is systematically higher than the one proposed. This is largely due to the inflation-adjustment of domestic and foreign interest income and the inclusion of<sup>the inflation tax in our measure;</sup> note that the private sector a net creditor<sup>of</sup> both the public and foreign sectors. As Figure 10 shows the discrepancy between<sup>the two measures widens</sup> with inflation.

<!-- Start of picture text --> CONVENTKONAL L-ASURES OF SAVNG.<br>(In 1980 pesos as X of GOP)<br>0.35<br>0.3<br>0.25.-<br>0.2<br>0.15 . / Ne-<br>0.05 _ 0 I<br>-0.15<br>1980 19811982 198319841685 1986 1987 1988 1989 1990<br>ye"<br>-Private s"in -+ PLMc Sm* - Forin Sw4V<br><!-- End of picture text --> Figure 9
20 <!-- Start of picture text --> COt4VENTOIAL AMD PROPOSED PRIVATE<br>SAVING bWASURES (1980 PESOS).<br>0.35<br>0.25 A<br>K 0.2 i<br>0.1<br>19801981 1982 198419841985 19561987 1988 1,89 1990<br>C-o nanmd Prqposd<br><!-- End of picture text --> Figure 10

# 3.3 Disacqrecgation of Consumption Series

A detailed disaggregation of consumption, including series with quarterly and monthly data frequencies, is provided in Annex C. Our analysis is limited to data with annual frequency and only considers disaggregation<sup>of</sup> consumption into durable consumption, non-durable consumption and services.

In 1989-90 private consumption grew at an average annual real rate of 5.4%; as a consequence, in 1990 the private consumption-GDP ratio got close to the record level for the decade attained in 1980. It is useful to check whether any particular component of consumption explains this trend. As Figure 11 shows the shares of the three consumption components out of total consumption were relatively stable over the 1980-90 period. However,<sup>durable</sup> consumption increased 28% between 1988 and 1990 and represents about<sup>one-</sup> quarter of the increase in total consumption over the same period. Durable consumption cannot explain an important part of total consumption growth because durable consumption only represented about 11% of total consumption during the period: the average growth of non-durable and services over 1988-90 is still a high 4.9%, or about 2 percentage points faster than output growth.
<!-- Start of picture text --> Private Consumption Com ponents<br>(as % of Private Consumptton)<br>0.<br>0.5<br>1910 1OUt ol~ 1082 1983 1984 1985 1986 1sa7 19 Wi198 1990<br>"Ws<br>l I ~Dur"f -Nu%-Ow" I<br><!-- End of picture text --> Figure 11

# 3.4 Dissaocreaation of Dis_osable income

As discussed above most of the variability of private saving rates is accounted for by changes in disposable income. Figure 4 shows all non-GDP items of disposable income as a proportion of GDP. The real interest on domestic debt (rB), other government revenue (OR), net income on foreign assets (iF-iDpr) and the inflation tax (inf*BM) all exhibit important changes during the 1980-90 period. A closer inspection at the behavior of these items is thus required to evaluate the factors underlying private saving patterns.

The large drop in disposable income, and associated decline in private saving, in the early 1980's steamed principally from the sharp increase in the inflation tan and the sharp drop in the domestic public interest service in 1982, and the more than doubling of other government revenues (OR) in 1983 (Figure 4). The impressive OR record was mainly the result of large<sup>increases</sup> in public utility prices as part of the structural adjustment process in Mexico. Disposable income recovered partially towards the mid-1980s. By and large this was due to a partial reversal of the above described changes: a temporary reduction of OR in 1985 and 1986, a substantial reduction in the inflation tax and a larger domestic public interest service. Net real income from private fore<sup>4</sup> gn assets also increased favored by a real peso depreciation and the growing size of the stock of foreign assets.

The steep decline in disposable income in 1987 is accounted for by three factors: a reduction in the real domestic debt service, a reduction in net income from foreign assets, and a now increase in other government revenue (OR). The drop in the real domestic interest service, equivalent to about 4 percentage points of GDP in 1987, was spurred by surprise inflation which hit
22 the economy towards the end of the year. Negative rea. interest rates on domestic debt and the recovery of OR explain why, along with the decline in private saving, there was a sharp improvement in public saving during 1987. The reduction in income from foreign private assets is accounted for by a real peso appreciation (measured December to December) and lower external interest rates.

The stabilization program launched in December 1987, called "Pacto", was extreseley successful in bringing down inflation. However, real domestic interest rates rose to unprecedontedly high levels, about 40% and 30% respectively In 1988 and 1989. Higher interest receipts from domestic government debt were the single most important factor behind the large increase of disposable income in 1988-89. Successfull stabilization was also associated with important changes in the public sector revenue structuret the sharp fall in the inflation tax was mostly offset by increases in conventional tax revenue. The other volatile factor of disposable income relevant in the late 1980s was real income from foreign assets. The real peso appreciation in 1988 led to a sharp reduction in real income from foreign assets; this was followed by an increase as the real exchange rate stabilized in 1989.

The deepeniun of fiscal adjustment and able domestic and foreign debt management combined to eventually bring down domestic real interest rates. 4 The sharp drop in disposable income in 1990 was in fact prompted by the associated decline in the domestic public interest service and, to a lesser degree, by a reduction in real income from foreign assets. Reduced income from foreign assets, in turn, stemmed from lower external interest rates and a new real peso appreciation in 1990. There was a decline in other government revenue but this was offset by a new increase in conventional tax revenue.

in short, most of the variability of disposable income in 1980-90 was associated to volatile transfers between the public and private sectors which, thus, account for much of the observed complementarity between public and private saving. Real renchange rate fluctuations, associated both with external shocks and the stabilization program in the late 1980s, were the other volatile factor explaining the variability of disposable income. The direct impact of real exchange rate fluctuations on private saving increased during the decade along with the stuck of private foreign assets.

4 For example, see Oka (1991).
23

# BuLretme

- Brideau, R., B. Eggeratedt and S. van Wijnbergen, "Measuring Capital Flight in Mexici," simoo, World Bank, 1991.

- Maller, P., E. Livacich and P. Arrau (1984) "Una revisi6n del ailagro econ6mico chilenot 1976-1981" en Colleccion Estudios CIEPLAN 15, Santiago.

- Oks, Daniol F. (1991) "DevaJuation Expectations and Interest Rates in Mexico: **the** Role of Domestic Debt Nanagaoent", Discussion Paper, LAC Series, World Bank.
_2A_

# Annex A: A Revision of National Accountino<sup>Procedures in Mexico</sup>

In this annex we briefly review national<sup>accounting procedures in Mexico</sup> in order to assess the measurement problems<sup>associated to its different</sup> components. The discussion below is based<sup>on what we have been able to learn</sup> about the Mexican national account system.

# Comoutation of the gross value of -roduction<sup>and value-added</sup>

The first step to compute national accounts<sup>series comprises the</sup> computation of the Gross Value of Production<sup>(VP). Most countries, including</sup> Mexico, have surveys and statistics with quantum<sup>indices of production and</sup> value of production at current prices for<sup>several sectors of the economy.</sup> When no direct information about the VP<sup>**at**current pricesis</sup> available, independently computed price indices of the<sup>different sectors are generally</sup> available. **These** statistics allow to compute good-quality data of VP in both real and nominal terms. The next step is to<sup>compute the value added by</sup> subtracting to the VP the intermediate purchases by firms When there are no good surveys to provide this information directly (the surveys provide the information at current prices; e.g. industrial surveys), a cosmonly used methodology is to apply the fixed coefficients from the Input-Output Matrix. The Matrix provides the exact coefficient for the year in which the matrix was computed, which is normally the base year of the national account system.

This methodology, however, could be inappropriate if the coefficients vary too much, something which often happens with large structural changes in the economy; and very specially, when trade liberalizations takes place. In Meller, Livacich and Arrau (1984) it is shown that after the trade liberalization of the late seventies in Chile, the value-added/VP coefficient was substantially reduced in the industrial sector, mainly due to the substitution of domestic value-added by imported inputs in the production process. The value-added of the industrial sector, therefore, was overestimated because the fix coefficient methodology did not account for this fact. Thig observation suggests the uroent need to chanaw the base<sup>of the</sup> national account system (compute a new inout-outout matrix) after a trade liberalization takes place. In 1985 Mexico started the process of trade liberalization; by 1990 it already was one of the most open developing countries in the world. Since the base year of the national account system is still 1980 the urgency for changing the base of the national account system becomes apparent.

If our presumption is correct and the computation of value added is overestimated in Mexico, then the series of private saving are also overestimated, specially after 1985. However, for the purposes of this report we are unable to evaluate this problem as there is no information available which would allow us to do so.

# Distribution of total supplv into its demand comoonents

The,most difficult part of computing the national accounts is the distribution of supply into its demand components. As we discuss below identifying the problems which may arise with the measurement of demand components is crucial to assess how reliable our private saving measure<sup>is.</sup> The supply of sector Oi" is comprised by the VP of the sector "i" plus **imports** (M) originated abroad in that sector (e.g. gross value of production of the industrial sector plus imports of industrial products).5 The total s Throughout the report we abstract from commercialization<sup>margin, which</sup> is the other component of the total supply at consumer prices.
supply must be distributed over intermediate demand (ID) , final private consumption (C), government consumption (3), gross fixed capital formation (FKF), stocks accumulation (SA) and exports (x). The following table illustrate this description.

Table A.l:

|Supply<br>Value<br>and<br>In<br>Prod.<br>Imp.<br>Demand<br>De|tern.<br>mand|Priv.<br>Cons.|Gov.<br>Cons.|Fix<br>Inves.|Stck.<br>Accus. Exp.|
|---|---|---|---|---|---|
|VP1<br>+<br>=sector,<br>=ID,|+ C|+ 01|+ F7F|+ SA<br>|+xi|
|.<br>.<br>m<br>.<br>=|.....|||||
|VPJ +N j<br>sectorj = IDj|+ C|J + GJ|+ FKFj|+ SA|+SJ|
|VP<br>+ M<br>=<br>Total = I|D<br>+|C +|G<br>+|FKF +|SA +X|

The notation in consistent with equation (2) after we define Y = VP - ID, and I = FKF + SA.

The usual problem with the distribution of demand components is that the relevant information is generally not available, and some assumptions must be made. The balance of payments accounts normally provide fairly good information on imports and exports. Except for the exchange rate measurement difficulties of transforming foreign denominated series into local currency accounts, these serieo are fairly accurate. This means that measured total supply is a good measure of actual supply of goods and services at the sector level. For several sectors (and/or products), however, the problems of assigning the total demand into its demand components is very difficult. The discussion below states why some series can be trusted more than others.

Assigning total supply to the demand components can be facilitated by doing the supply/demand compatibilization at a level as disaggregated as possible. For instance, several firms, or even sectors, snecialize in exports. Consequently the value of production would mostly be assigned to exports. The only uncertainty could be, if the commodity is storable, how much of total supply goes to stock accumulation. If good exports series are available, stock accumulation can be accurately obtained by difference (all produced goods not exported,.

Something similar could be done if the company produces mostly machinery, or inputs for some other sector, which are easy to assign due to the characteristics of the good. The value of production of the construction sector, for instance, is another sector which is mostly assigned to fixed capital formation, and does not produce mayor measurement problems to other components. Government consumption is another variables relatively easy to assign. G is mostly the value of productions of sectors associated to the government. These are typically public administration plus governmont health and education production (expenses).

The more serious problems appear with those sectors or products which can go to several different demand compone"ts. Most food production, for instance, can go to intermediate demand (purchases of other firms), private consumption, to stock accumulation (if storable) and exports. Similar problems occur with several investment goods. While again exports are generally well measured, the distribution to the other components can be very cumbersome.
26 Total intermediate demand must add up to total<sup>intermediate purchases by</sup> firms. In general there is no good methodology<sup>to assign the portion of total</sup> supply that goes to intermediate demand<sup>(except when the characteristics of</sup> the good makes such assignment obvious). Again,<sup>there is heavy reliance on</sup> fixed coefficients ID/VP in those sectors or products<sup>where the assignment is</sup> not obvious. The fixed coefficients are known<sup>from the base year. Of course,</sup> applying fixed coefficients to most sectors would not produce in general a total intermediate demand equal to the total<sup>intermediate purchases of firms,</sup> **so** ad-hoc adjustments are necessary to produce<sup>such a match. In general</sup> however, because these coefficient are mostly<sup>determined by technological</sup> factors, this part will not produce too much<sup>deviation from actual figures.</sup> Besides, the aggregate intermediate demand<sup>must add up to aggregate</sup> intermediate purchases by firms, which means<sup>that at least at the aggregate</sup> level intermediate demand is "allegedly"<sup>well measured.'6</sup> From the discussion so far we can conclude<sup>that with the exception of</sup> fix gross capital formation, private consumption<sup>and stocks accumulations, all</sup> other measured demand components are relatively<sup>accurate measures of actual</sup> series (at least at the aggregate level).<sup>Indeed, the series of investment.</sup> private consumption and stock accumulations<sup>are Potentiallv the ones with more</sup> measurement errors.

Although looking at the good characteristics is often sufficient<sup>to</sup> differentiate between goods that should be assigned<sup>to investment or</sup> consumption, that is not enough to differentiate<sup>when a good goes to stock</sup> accumulation or is actually invested or consumed.<sup>In order to do that, we</sup> need to have good survey data on sales at<sup>the sector or company lovel. The</sup> difference between what is produced and what is sold<sup>is the stock accumulation</sup> in the case of domestically produced goods.

With the total supply of forei-gn goods we have a similar<sup>problem. The</sup> total of goods imported is the supply of foreign<sup>goods available, but we need</sup> to know the actual sales from commerce (distributors<sup>of imported goods) in</sup> order to differentiate between stock accumulation and actual consumption/investment.

Surveys on sales and stocks. therefore are<sup>the critical information</sup> needed to have a aood distribution between investment/consumotion<sup>and stocks</sup> accumulation. This leads to the issue of which<sup>data frequency is of better</sup> quality. Quarterly information is less accurate<sup>precisely because good-</sup> quality surveys on sales and stocks are not available at this<sup>frequency, and</sup> therefore the distribution between consumption,<sup>investment and stocks</sup> accumulation is more cumbersome. Even at the<sup>annual level this is a large</sup> problem, but presumably due to bettex surveys and<sup>monitoring at the year</sup> level, facilitated by the normal cycle of business<sup>reporting (balance sheets,</sup> tax payments, etc.), the annual data is better. Among<sup>the three noisy</sup> components (fixed investment, private consumption<sup>and stock accumulation),</sup> stock accumulation is likely to be the most<sup>noisy. The reason for that is</sup> that the lack of sales information normally<sup>require to use again fixed</sup> distribution coefficients from the base period.<sup>The coefficients are more</sup> likely to be stable or less variable for<sup>consumption and investment, and</sup> therefore stock accumulation is often the<sup>residual variable.</sup> In short, gross domestic product, exports,<sup>imports and government</sup> consumption are relatively well measured at<sup>the aggregate level. Thus, the</sup> summation of fixed investment, private consumption<sup>and stock accumulation is</sup> also accurate. However, the distribution<sup>of this summation among the three</sup> ' We say "allegedly" because it is not obvious that<sup>intermediate</sup> purchases by firms is well measured as discussed<sup>above. However, we suspect</sup> that the most substantive measurement errors are not due these<sup>series.</sup>
27 components is relatively inaccurate, specially for stock accumulation. This proble- is more serious in the case of quarterly data.
28

# Annex Bs Statistical Annex.

# Notation for Tables 8.1 and B.2

# Tabl& l l

# a) **and** b)

- I aggregate investment

Y gross domestic product (GDP) T total taxes C private consumption Gna non-interest current public expenditure (national accounts) O non-interest current public expenditure (fiscal accounts) (K-Z)na trade deficit (national accounts) Erbop beginning of period commercial exchange rate Eravg average comercial exchange rate LIBOR foreign interest rate (2/3 of LIBOR plus 1/3 US CD rate) EcBal economic fiscal deficit

- Ipu public investment

- GDPd GDP deflator

is nominal interest domestic public debt iDpun nominal interest on foreign public debt iBf nominal interest on domestic federal debt iDpufn nominal interest on foreign federal debt inf CPI inflation (december to December) inf-avg CPI inflation (average compared to beginning of period)

## C)

- Dpr private foreign debt F private foreign assets

- CACC current account balance

- lFo interest retained abroad (official)

- WR workers remittances

- int-exp interest received from abroad (official)

iDn net foreign interest paid (excluding interest on private assets) US-WPI wholesale price index of US

- (M-X) trade deficit (SOP accounts)

iD-g gross external interest paid D total foreign debt Dpu public foreign debt d) DD domestic debt CBD-BS commercial bank deposits at Bank of Mexico Cetes Cetes interest rate (90 days to 1984, 28 days thereafter) CPI consumer price index MBASE monetary base iB domestic interest on public debt

# Table 8.2.

(1 ef GDP) Sp/Y private saving Sg/Y public saving
_29_ Sf/Y foreign saving C/Y private consumption Yd/Y disposable income NFS/Y not factor service (see identity 2 in text) rB/Y real interest service on domestic debt iF/Y real interest on private foreign assets iDpr/Y real interest on private foreign ebt T/Y total taxes OR/Y otherpublic revenue (see identity 2 in text) inf*BM/Y inflation tax
30 TABLE 9.1. BASIC DATA.

a) Current 10-9 pesos

||I|Y|T|C|Gna|G|(M-X)n|a ERbop|ERavg|LIBOR|<br>EcB8l|Ipu|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|1980<br>1981<br>1982<br>1983<br>1984<br>1985<br>1986<br>1987<br>1988<br>1989<br>1990<br>1991|<br>1214<br>1678<br>2244<br>3710<br> <br>5853<br>10034<br> <br>1448<br>37164<br>83209<br>117817<br>131288|<br>4470<br> <br>6128<br> <br>9798<br> <br>17879<br> <br>29472<br> <br>47392<br>979536<br> <br>193552<br>396073<br>516710<br>668691|435<br>582<br>791<br>1399<br>2322<br>3783<br>6582<br> <br>15275<br>37844<br>52009<br>76201|2909<br>3944<br>6037<br>10882<br>18590<br>30575<br>54209<br>126052<br>270751<br>340023<br>464964|449<br>660<br>1026<br>1574<br>2722<br>4374<br>7208<br>16505<br>32961<br>54460<br>75692|395<br>572<br>927<br>1549<br>2353<br>3899<br>6738<br>15844<br>30165<br>40226<br>50878|101<br>155<br>-491<br>-1713<br>-2307<br>-2408<br>-3629<br> <br>-13829<br>-9150<br>-4410<br> <br>3253|22.802<br>23.26<br>26.2<br>96.3<br>143.62<br>191.95<br>368.2<br>915.1<br>2209.7<br>2281<br>2641<br>2945.4|22.95<br>24.51<br>57.44<br>120.16<br>167.76<br>256.95<br>611.35<br>1366.7<br>2250.3<br>2453.2<br>2807.3|12.5<br>15<br>11.6<br>9<br>10<br>7.8<br>6.3<br>6.3<br>7.1<br>8.5<br>7.8|-292.6<br> <br>-797.1<br>-1524.3<br>-1456.1<br>-2105.8<br>-3808.9<br>-11465<br>-27788<br>-36383<br>-24619<br>-15106|429.2<br>789.4<br>995.9<br>1338<br>1984.8<br>2867.4<br>4773.8<br>10729<br>17300<br>20364<br>32701|
|||GDPd|is|**iDpun**|<br>**iBf**|iDpufn|iBBM|inf|inf-avg||||
|1980<br>1981<br>1982<br>1983<br>1984<br>1985<br>1986<br>1987<br>1988<br>1989<br>1990|<br> <br> <br>|1<br>1.260254<br>2.027819<br>3.862381<br>6.144968<br>9.631618<br>16.79482<br>40.15946<br>81.01484<br>102.5043<br>127.7021|107<br>179<br>481<br>1383<br>2347<br>3705<br>9598<br>29702<br>51982<br>47322<br>45142|51<br> <br>126<br>324<br>829<br>1163<br>1738<br>3499<br>8494<br>14163<br>18028<br>20426|54.9<br>140.4<br>406<br>1137<br>1813<br>3114<br>8653<br>27990<br>49258<br>44638<br>39524|22.1<br>33.5<br>109<br>388<br>548<br>893<br>2100<br>5967<br>10064<br>12736<br>17885|0.13154<br>0.13154<br>0.20519<br>0.30656<br>0.3174<br>0.15821<br>0.26953<br>0.41485<br>0.26063<br>0.0512<br>0.02036|0.29781<br>0.28683<br>0.98873<br>0.80769<br>0.59169<br>0.63744<br>1.0574<br>1.5916<br>0.51657<br>0.19697<br>0.29929|0.1423<br>0.1354<br>0.3901<br>0.3717<br>0.536<br>0.2649<br>0.4288<br>0.6157<br>0.2895<br>0.086<br>0.1357||||

b) Current **USS** million

||Dpr|F|CACC|iFo|WR|int-exp|<br>iDn|US-WPI|<br>(N-X)|iDW-|D|Dpu|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|1980<br>1981<br>1982<br>1983<br>1984<br>1985<br>1986<br>1987<br>1988<br>1989<br>1990<br>1991|6680<br>7300<br>10200<br>8100<br>14800<br>16296<br>15745<br>15103<br>14148<br>5931<br>3999|6474<br> <br>8614<br>22376<br>33047<br> 37652<br>43746<br>50419<br>52642<br>57221<br>65177<br>68027|-10740<br>-16052<br>-6221<br>5418<br>4238<br>1237<br>-1673<br>3967<br>-2443<br>-5447<br>-6610|698<br>946<br>904<br>873<br>1481<br>1417<br>1072<br>1174<br>1306<br>1761<br>1796|429.6<br>564.3<br>591.9<br>712.5<br>767.1<br>797.7<br>901.9<br>1030.3<br>1316.8<br>1406<br>1500|1022<br>1386<br>1325<br>1279<br>2074<br>1822<br>1462<br>1888<br>2507<br>2580<br>2632|5823<br>9045<br>11782<br>9697<br>11122<br>9751<br>7952<br>7383<br>7438<br>8459<br>8182|<br>1<br> <br>1.0534<br>1.070886<br>1.090162<br>1.103353<br>1.11538<br>1.073442<br>1.121854<br>1.173571<br>1.216641<br>1.27723|4345<br>6053<br>-5942<br>-14382<br>-13892<br>-9134<br>-5841<br>-10380<br>-4106<br>-1765<br>1153|6147<br>9485<br>12203<br>10103<br>11715<br>10156<br>8342<br>8097<br>8639<br>9278<br>9018|40522<br>54195<br>73518<br>83918<br>88176<br>86662<br>91175<br>94442<br>96056<br>94746<br>88512<br>91787|33842<br>46895<br>63318<br>75818<br>73376<br>70366<br>75430<br>79339<br>81908<br>88815<br>84513<br>8238L|

c) Constant 10-9 1980 pesos <!-- Start of picture text --> I Y C Gna (M-X)na<br>1980 1213.984 4470 2909 449 101<br>1981 1392.985 4862 3123 495 149<br>1982 1054.856 4832 3046 505 -226<br>1983 769.959 4629 2883 519 -458<br>1984 817.006 4796 2977 553 -450<br>1985 901.412 4920 3083 558 -379<br>1986 710.712 4736 3011 566 -464<br>1987 742.907 4820 2984 559 -531<br>1988 833.731 4889 3047 556 -448<br>1989 877.738 5041 3220 553 -387<br>1990 991.255 5236 3387 562 -309<br><!-- End of picture text -->
31 (continued TabLe 9.1) d) Monthly Data

||DD|CBD-BM|Cetes|CPI|MOASE|is|
|---|---|---|---|---|---|---|
|||||127.6|||
|1980|1<br>300<br>2<br>|348.7<br>3579|20.36947<br>2105882|133.8<br>1369|509<br>5061|2.2<br>29|
||<br>308.5<br> <br>|.<br>|.<br>|.<br>|.<br>|.<br>|
||3<br>297.7<br> <br>|365.5<br>|23.51282<br>|139.7<br>|523.5<br>|15.8<br>|
||4<br>314.0|384.9|24.64602|142.1|531.8|7.4|
||<br> <br>5<br>326.3<br> <br>|<br>386.4<br>|24.65799<br>|144.4<br>|545.7<br>|9.9<br>|
||6<br>366.1<br> <br>|389.9<br>|23.71503<br>|147.3<br>|563.1<br>|7.5<br>|
||7<br>365.6|421.8|22.95506|151.4|564|4.7|
||<br> <br>8<br>3704|<br>4198|<br>2348905|<br>1546|5938|55|
||<br>.<br>9<br>375.7<br>10<br>390.1|.<br>430.6<br>437.9|.<br>25.95585<br>27.54375|.<br>156.3<br>158.6|.<br>593.6<br>596.7|.<br>20.8<br>7.2|
||<br> <br>11<br>4102|4519|2886415|1614|623|9|
||<br>.<br>12<br>507.1<br> <br>|.<br>501.9<br>|.<br>31.23694<br>|.<br>165.6<br>|<br>647.7<br>|13.9<br>|
|1981|1<br>559.1|482.6|32.66126|171.0|718.1|4.2|
||2<br>5682|4999|3252332|1752|6963|4.1|
||<br>.<br>3<br>574.5<br> <br>|.<br>525.6<br>|.<br>32.26028<br>|.<br>178.9<br>|.<br>717.5<br>|22.7<br>|
||4<br>607.0|534.6|32.02263|182.9|741.1|12.1|
||5<br>6465|5702|31673|1857|7681|9|
||<br>.<br>6<br>648.7<br> <br>|.<br>577.1<br>|.<br>31.99764<br>|.<br>188.3<br>|.<br>804.6<br>|11.4<br>|
||7<br>673.1|610.9|35.01013|191.6|825.6<br>|19.4<br>|
||8<br>646.9<br> <br>24|632.4<br>604|38.51424<br>3900737|195.6<br>1992|878.6<br>950|11.3<br>53|
||9<br>65.<br>10<br>650.9|5.<br>663.9<br>|.<br>38.8515<br>|.<br>203.6<br>|<br>905.6<br>|9.2<br>|
||11<br>697.3<br>12<br>7222|702.3<br>7231|38.29406<br>3821641|207.5<br>2131|939.9<br>10083|12.7<br>98|
||<br>.<br> <br>|.<br>|.<br>|.<br>2237|.<br>10419|.<br>51|
|982|1<br>808.8<br>2<br>795.8|752.5<br>996.8|39.42366<br>41.92797|.<br>232.5|.<br>1059.6|.<br>30|
||<br> <br>3<br>8371|<br>10061|4073063|2410|13149|601|
||<br>.<br> <br>|.<br>|.<br>41360|.<br>2541|.<br>1324|.<br>131|
||4<br>916.7<br> <br>|999.2<br>|5.5<br>|.<br>|<br>|-.<br>|
||5<br>865.1|1030.5|52.0214|268.4|1342.7|24.9<br>|
||6<br>856.7<br> <br>2|1050.7<br>11204|63.1296<br>6565092|281.3<br>2958|1443.5<br>14104|34.1<br>36|
||7<br>90.7<br>8<br>971.8|.<br>1324.6|.<br>69.94846<br>|.<br>329.0<br>|.<br>1494<br>|54.6<br>|
||9<br>1,151.1<br>10<br>15367|1318.8<br>13520|60.82577<br>5132755|346.5<br>3645|1734.4<br>17511|27.3<br>492|
||<br>,.<br> <br>|.<br>|.<br>|.<br>|.<br>|.<br>|
||11<br>1 741.5|1441.7<br>|63.07097<br>|382.9<br>|1819.5<br>|77.4<br>|
|983|12<br>1:958.6<br>1<br>22246|14320.0<br>15372|72.31935<br>7559666|423.8<br>4699|1943.9<br>19834|95.5<br>775|
||<br>,.<br>22,099.2<br>32,150.2|.<br>1522.4<br>1587.3|.<br>77.83877<br>82.77061|.<br>495.1<br>519.1|.<br>2031.2<br>2016.9|.<br>92.7<br>89.2|
||<br>4<br>20957|15632|8035522|5520|20928|452|
||<br>,.<br>52,167.8<br>|.<br>1620.0<br>|.<br>81.0995<br>|.<br>575.9<br>|.<br>2081.5<br>|.<br>104.1<br>|
||62,201.9<br>724301|1696.7<br>17335|79.94448<br>7774492|597.7<br>6273|2008.8<br>22036|93<br>1257|
||,.<br>8 2,611.6<br>|.<br>1856.9<br>|.<br>71.98349<br>|.<br>651.6<br>|.<br>2250.5<br>|.<br>155.5<br>|
||92,780.1|2005.6|70.43278|671.7|2392.6|-93|
||<br>10<br>2,777.8<br> <br>|2057.8<br>|67.45266<br>2|694.0<br>747|2517.5<br>26008|340.9<br>834|
||11<br>3,284.1<br>12<br>3,562.7|2212.6<br>2392.1|66.856<br>66.75107|3.<br>766.1|.<br>2799.6|.<br>269|
|984|<br>1<br>40316|24709|654434|8148|31363|1493|
||<br>,.<br> <br>|.<br>|.<br>142|.<br>8578|.<br>3177|.<br>1475|
||2<br>4,263.7<br>3<br>4,500.9|2613.4<br>2774.0|6.385<br>55.72473|.<br>894.5|<br>3307.4|.<br>249.6|
||<br>4<br>47138|28670|5644791|9332|35152|160|
||<br>,.<br>5<br>4,854.6<br> <br>|.<br>2965.8<br>|.<br>61.14508<br>|.<br>964.1<br>|.<br>3647.9<br>|222.5<br>|
||6<br>5,043.8<br>7<br>51748|2962.4<br>31293|62.32483<br>6232483|999.0<br>10318|3756.4<br>37918|216.5<br>197.9|
||<br>,.<br>8<br>5,392.3<br> <br>|.<br>3238.5<br>|.<br>61.93086<br>|.<br>1061.1<br>|.<br>3930.7<br>|184.6<br>|
||9<br>5,605.5|3283.6|60.47797|1092.7|4079.1<br>|226.9<br>|
||<br>10<br>55951|34164|5801632|1130.9|4118.1|248.2|
||<br>,.<br>11<br>5,737.0<br> <br>|.<br>3316.6<br>|.<br>57.88756<br>|<br>1169.7<br>|<br>4293.7<br>|196.2<br>|
|985|12<br>5,837.0<br>1<br>62950|3619.4<br>34719|60.06403<br>5844612|1219.4<br>13095|4300.2<br>48579|147.6<br>217.8|
||<br>,.<br>2<br>65798|.<br>35574|.<br>602175|.<br>13642|.<br>45725|170|
||<br>,.<br>3<br>6,758.8|.<br>3599.8|.<br>70.84223<br>|.<br>1417.1<br>|.<br>4688.7<br>|207.6<br>|
||4<br>6985.4|3699.8|73.65235|1460.7|4808.1|272.1|
||<br>,<br>5<br>7,172.5<br> <br>|<br>3639.5<br>|<br>75.64315<br>|<br>1495.3<br>|<br>4858.9<br>|225<br>|
||6<br>7,418.5|3664.2|85.58158|1532.8|4859.2|189.1|
||<br>7<br>78167|36352|9305923|15862|4945.8|315.9|
||<br>,.<br>8<br>8,099.3<br> <br>|.<br>3682.9<br>|.<br>96.13993<br>|.<br>1655.5<br>|<br>4919.3<br>|282.4<br>|
||9<br>8,458.6|3737.8<br>|90.24547<br>|1721.6<br>|5018.3<br>|403.5<br>|
||10<br>8,800.7<br>11<br>89684|3774.6<br>37116|86.42308<br>9034425|1787.0<br>18695|5064.3<br>51941|385.7<br>3197|
||<br>,.<br>129,299.4|.<br>3835.2|.<br>99.30865|.<br>1996.7|.<br>5299.9|.<br>716|

1981 1982 1983 1984 1985
32

|(continued Tabte 9.1)<br>1986<br>1 10,369.3<br>2 10,746.3<br>3 11,358.1<br>4 12,056.5<br>413,054.2<br>6 13,495.3<br>7 14,002.3<br>8 15,088.1<br>9 16,202.1<br>10 17,153.6<br>11 18,992.1<br>12 21,062.5<br> <br>|3929.8<br>3930.5<br>4214.5<br>4045.7<br>4107.9<br>4325.0<br>4341.7<br>4217._<br>4417.1<br>4574.9<br>4767.0<br>5067.3<br>|103.0683<br>104.2414<br>111.4125<br>120.0722<br>120.0722<br>126.8887<br>141.7965<br>152.5498<br>161.5177<br>162.9994<br>154.4644<br>163.495<br>|2173.3<br>2269.9<br>2375.4<br>2499.4<br>2638.3<br>2807.6<br>2947.7<br>3182.7<br>3373.7<br>3566.5<br>3807.5<br>4108.2<br>44409|5744.9<br>5747.5<br>5786.8<br>6114.8<br>6021.1<br>6135.8<br>6402.3<br>6477.9<br>6449.7<br>6612.5<br>7053.5<br>7551.1<br>85353|584.1<br>535<br>543.4<br>797<br>628.5<br>717.2<br>1026.3<br>1006.9<br>1154.2<br>871.8<br>1104.2<br>6?9.2<br>19-Y09|
|---|---|---|---|---|---|
|1987<br>1 24045.8|4677.4|156.8765|.<br>|.<br>|.<br>|
|<br>,<br>277|52654|1573614|4761.3|8027.3|1483|
|2 6,905<br>|.<br>|.<br>|<br>|8613|15126|
|3 29,667.1<br>|5448.9<br>55450|153.4815<br>1482905|5076.0<br>55201|<br>9056|.<br>2233.2|
|4 32,392.5<br>4357552|.<br>58508|.<br>145.2557|.<br>5936.2|<br>9622.6<br>|1678.8<br>|
|,.<br>|.<br>|<br>1452557|63657|101363|1961.1|
|6 38,53150|5530.6<br>|.<br>|.<br>|.<br>|2828|
|<br>7 426225|61166|1444445|6881.3|9719.5||
|,.<br>|.<br>|.<br>|74437|109585|23707|
|8 45919.4|5489.1|142.2322|.<br>|.<br>|.<br>|
|,<br>|59527|1413616|7934.1|10321.2|2188<br>|
|9 49,577.3<br>|.<br>|.<br>|<br>85952|111496|34545|
|10 525457|6255.9|141.6362|.<br>|.<br>|.<br>|
|,.<br>|<br>59562|1754704|92770|12257.3|3324.9|
|11 55,477.3|.<br>|.<br>|.<br>|<br>12485|46765|
|<br>12 576410|64419|225.5166|10647.2|<br>|.<br>|
|,.<br> <br>|.<br>|<br>3374622|122935|147542|4523.3|
|1988<br>1 65,455.2|7513.3|.<br>|.<br>|.<br>|50953|
|<br> <br>2 697329|76895|3348554|13318.5|15535.7|.<br>|
|,.<br>|.<br>|.<br>|140009|156697|6639.4|
|276155.9|6526.6|155.2821<br>|.<br>|.<br>|4|
|,<br>4|88812|9049468|14431.9|16001.4|6756.<br>|
|85,685.0<br>|.<br>|.<br>|<br>147111|188097|43115|
|5 900047|8975.7|65.49571|.<br>|.<br>|.<br>|
|,.<br>|87392|4961785|150112|19457.8|4187.2|
|592,897.0|.<br>|.<br>|.<br>|<br>|32092|
|<br>7 921206|81073|49.45614|15261.8|19887.2<br>|.<br>|
|,.<br>|.<br>|<br>21|154022|192877|4196.2|
|8 90,223.6|7728.0|50.935<br>|.<br>|.<br>|22|
|<br>9 915587|58617|518242|15490.2|18593.3|63<br>|
|,.<br>|.<br>|.<br>|<br>156084|170554|24581|
|10 88913.5|6589.0|55.92956|.<br>|.<br>|.<br>|
|,<br>|56024|6430508|158173|17462.4|3352.5|
|11 86,677.2<br>|.<br>|.<br>|.<br>|180865|46302|
|12 80,193.4<br> <br> <br>|6689.2<br>2|68.16286<br>6568954|16147.3<br>165426|.<br>207508|.<br>2474.8|
|1989<br>1<br>8,429.4|760.7<br>|.<br>|.<br>|.<br>2|33756|
|<br>2 876017|70275|63.07457|16767.1|0010.1<br>|.<br>|
|,.<br>389,826.7|.<br>7662.4|<br>60.92198<br>|16948.8<br>|20217.2<br>|4835.6<br>42|
|<br>4 908727|36990|645779|17202.3|20675.1|63.3<br>|
|,.<br>|.<br>|.<br>|<br>174391|173522|36689|
|5 91997.3|3911.0|67.39447<br>|.<br>|.<br>|.<br>|
|,<br>|39820|7548187|17650.9|16896.3|5633.4<br>|
|690,665.8<br>7 945824|.<br>4457.0|.<br>59.73052|<br>17827.4<br>|17751.2<br>|5193.8<br>|
|,.<br>|<br>3160|4158753|179973|18463.4|4896.3|
|8100,754.0|5.<br>|.<br>|.<br>|<br>|31289|
|<br>91008121|23560|41.01552|18169.4|16623.0<br>|.<br>|
|,.<br>|.<br>|<br>4606859|184381|161300|3164.5|
|10 104,796.2|3480.0|.<br>|.<br>|.<br>|41962|
|<br>11 1074339|44650|4761535|18696.9|17681.0|.<br>|
|,.<br>|.<br>|.<br>|193279|193620|21311|
|12 108,696.2<br> <br>|4152.0<br>2|49.89754<br>5099147|.<br>202607|.<br>22960.0|.<br>3554.7|
|1990<br>1 109,946.1|365.0<br>|.<br>|.<br>|<br>19889|39028|
|<br>2 1139821|36180|56.89494|20719.5|<br>|.<br>|
|,.<br>|.<br>|<br>5912228|210848|19850|5353|
|3 117,197.8<br>4 1223304|3529.0<br>44280|.<br>5597541|.<br>21405.7|<br>20637|4759.6|
|,.<br>|.<br>|.<br>|<br>217792|21389|56279|
|5 1223300|4095.0|44.63657|.<br>|<br>|.<br>|
|,.<br>|30540|4107123|222589|21453|535.6|
|6 126,653.3|.<br>|.<br>|.<br>|<br>21476|272242|
|<br>7 1282940|43870|35.96261|22664.8|<br>|.<br>|
|,.<br>|.<br>|3470242|230510|22138|2835.26|
|8 133,891.7|2901.0|.<br>|.<br>|<br>|30194|
|<br>9 1333310|34910|3527755|23379.6|21015|.<br>|
|,.<br>|.<br>|.<br>|237157|21719|39246|
|10 133419.0|3981.0|33.34718<br>|.<br>|<br>|.<br>|
|,<br>11 1357068|43920|2830616|24345.4|23526|3206.64|
|,.<br>12 1415149|.<br>5543.0|.<br>29.80741|<br>25112.7|25586<br>|2763.96|
|,.<br>1||||31134||
33 TABLE 8.2: SAVING ESTIMATES AND COMPONENTS

|a|) Current|pesos (X|of GDP)||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||Sp/Y|Sg/Y|Sf/Y|C/Y|Yd/Y|NFS/Y|rB/Y|iF/Y|iDpr/Y|T/Y|OR/Y|inf*BM/|
|1980<br>1981<br>1982<br>1983<br>1984<br>1985<br>1986<br>1987<br>1988<br>1989<br>1990|0.177<br>0.195<br>0.183<br>0.136<br>0.151<br>0.173<br>0.148<br>0.075<br>0.105<br>0.219<br>0.101|0.082<br>0.042<br>-0.061<br>0.185<br>0.144<br>0.041<br>0.018<br>0.190<br>0.185<br>0.013<br>0.100|0.013<br>0.037<br>0.107<br>-0.113<br>-0.096<br>-0.002<br>0.017<br>-0.073<br>-0.080<br>-0.004<br>-0.005|0.651<br>0.644<br>0.616<br>0.609<br>0.631<br>0.645<br>0.682<br> <br>0.651<br>0.684<br>0.658<br>0.695|0.828<br>0.839<br>0.799<br>0.744<br>0.782<br>0.818<br>0.829<br>0.726<br>0.789<br>0.877<br>0.796|0.004<br>0.005<br>0.004<br>-0.004<br>-0.004<br>-0.007<br>-0.002<br>-0.006<br>-0.005<br>-0.004<br>-0.010|0.003<br>0.003<br>-0.034<br>-0.006<br>0.000<br>-0.004<br>-0.016<br>-0.057<br>0.050<br>0.060<br>0.013|-0.004<br>0.000<br>0.064<br>-0.018<br>-0.014<br>0.047<br>0.066<br>-0.002<br>-0.087<br>0.014<br>-0.020|-0.003<br>0.001<br>0.030<br>-0.003<br>-0.005<br>0.019<br>0.023<br>0.000<br>-0.020<br>0.001<br>-0.001|0.097<br>0.095<br>0.081<br>0.078<br>0.079<br>0.080<br>0.083<br>0.079<br>0.096<br>0.101<br>0.114|0.057<br>0.047<br>0.042<br>0.126<br>0.116<br>0.097<br>0.082<br>0.112<br>0.099<br>0.095<br>0.086|-0.016<br>-0.016<br>-0.074<br>-0.035<br>-0.018<br>*0.035<br>-0.036<br>-0.028<br>-0.005<br>-0.005<br>-0.008|

b) Constant 1980 pesos (% of GDP)

||Sp/Y|Sg/Y|Sf/Y|C/Y|Yd/Y<br>|NFS/Y|rS/Y|iF/Y|iDpr/Y|T/Y|OR/Y|infBM/Y|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|1980<br>1981<br>1982<br>1983<br>1984<br>1985<br>1986<br>1987<br>1988<br>1989<br>1990|0.177<br>0.196<br>0.169<br>0.122<br>0.161<br>0.191<br>0.193<br>0.107<br>0.165<br>0.238<br>0.149|0.082<br>0.048<br>-0.060<br>0.161<br>0.121<br>0.020<br>-0.011<br>0.159<br>0.155<br>0.009<br>0.106|0.013<br>0.042<br>0.110<br>-0.116<br>-0.112<br>-0.028<br>-0.036<br>-0.112<br>-0.149<br>-0.072<br>-0.068|0.651<br>0.642<br>0.630<br>0.623<br>0.621<br>0.627<br>0.636<br>0.619<br>0.623<br>0.639<br>0.647|0.828<br>0.839<br>0.799<br>0.744<br>0.782<br>0.818<br>0.829<br>0.726<br>0.789<br>0.877<br>0.796|0.004<br>0.005<br>0.004<br>-0.004<br>-0.004<br>-0.007<br>-0.002<br>-0.006<br>-0.005<br>-0.004<br>-0.010|0.003<br>0.003<br>-0.034<br>-0.006<br>0.000<br>-0.004<br>-0.016<br>-0.057<br>0.050<br>0.060<br>0.013|-0.004<br>0.000<br>0.064<br>-0.018<br>-0.014<br>0.047<br>0.066<br>-0.002<br>-0.087<br>0.014<br>-0.020|-0.003<br>0.001<br>0.030<br>-0.003<br>-0.005<br>0.019<br>0.023<br>0.000<br>-0.020<br>0.001<br>-0.001|0.097<br>0.095<br>0.081<br>0.078<br>0.079<br>0.080<br>0.083<br>0.079<br>0.096<br>0.101<br>0.114|0.057<br>0.047<br>0.042<br>0.126<br>0.116<br>0.097<br>0.082<br>0.112<br>0.099<br>0.095<br>0.087|-0.016<br>-0.016<br>-0.074<br>-0.035<br>-0.018<br>*0.035<br>-0.036<br>-0.028<br>-0.005<br>-0.005<br>0.008|
34

# Annex Ct Ouarterly and Monthly Private Consumption Series

In this annex we describe the sources of quarterly and monthly consumption series as well as the approach followed to identify some of their components. We also assess potential discrepancies by frequeacy of data. The Bank of Mexico provides quarterly indices of GDP and demand components on a regular basis. When those indices are applied to the 1980 figures of the national accounts we obtain quarterly demand components expressed in 1980 pesos. Although the quarterly GDP obtained in this way is not the official quarterly GDP (which is provided regularly by INEGI), the demand components of GDP computed by Banco de Mexico are the only available so far.

The total quarterly private consumption index published by the Bank of Mexico is actually computed (but not published) at a fairly disaggregated level. The disaggregation is provided in Table C.l. As shown in the table, the series comprises domestically produced private consumption, imported private consumption and a small item called net foreign purchases which correct for cross border net consumption (foreigners in Mexico and Mexicans abroad), normally associated with frontier transactions not correctly detected when computing the two mayor items. Domestically produced private goods are also disaggregated into agriculture consumption, industrial consumption (durables and non-durable, there the latter is further disaggregated into food and non-food), and services. The imported private consumption series is not disaggregated further by the Bank of Mexico. Nevertheless, we have been able to separate durable and non-durable private imports by applying the share of durable imports in total consumption imports (both expressed in US dollars) to the imported consumption series in 1980 pesos. The share of durable imports in dollars is a good proxy for the share of real imported durable consumption if the relative prices in dollars have not change significantly over the period (something which is not very likely). Table C.2 provides the series of dollar imports of private consumers employed to break down the imported consumption series in Table C.1. The share of quarterly durable imports (adding the months) over total quarterly imports, is used to separate durable and non-durable imported consumption. Table C.3 provides the quarterly series of durable, non durable and services.

# Comparison of Ouarterlv and Annual Series.

Here we compare of quarterly and annual consumption series. As mentioned in Annex A, quarterly information is likely to be more inaccurate than annual information. In order to evaluate possible mismeasuremenz errors at the quarterly level, we compare the annual (official) series from INEGI with the quarterly series by the Banco de Mexico. Table C.4 provides this information for the period 1980-90. We can see that in general the quarterly information does not deviate much from the official series. Although some underestimation of the consumption series is apparent in the last four years, which at most represents 3% of annual consumption in 1990. Conseauentlv the auarterly series of consumption from the Bank of Mexico can be used with hiah confidence.

# Comoarison of Monthly and Quarterly Consumption Series.

Although the Bank of Mexico does not produce a monthly version of its quarterly index, most of the basic information used to compute the quarterly series is available on a monthly basis. Officials in the Bank of Mexico kindly responded positively to our request for the monthly data and provided the series for consumption of domestically produced goods shown in Table C.5. To complete the series we have computed a series of imported consumption in 1980 pesos by deflating the dollar series in Table C.2 by a dollar price index of private imported goods. To separate durable and non-durable consumption we
35 use the same procedure described above for the quarterly information. We could not obtain a monthly version of the not foreign purchases serios, but the latter represents a negligible part of the quarterly series (see Table C.1).

Table C.6 compares the monthly and quarterly series of consumption. We can see that the domestic components are very close, always within the error order of 2%. This imolies that we have a fairly accurate monthly version of the domestic component of the auarterlv series. Our imported proxy, however, differs substantially from the quarterly series of the Banco de Mexico. Nevertheless, imported private consumption represents a very low share of total private consumption, between 2% and 6%. In short, total consumption based on monthly data does not differ too much from the quarterly series, particularly, when we leave aside the imported component.

Unlike the quarterly series, the monthly series in the Table C.6 does not go through the process of compatibilization of demand and supply described in Annex A, and therefore is likely to be more "noisy" than the quarterly data. (This could explain the high divergence of our imported proxy.)
# TABLE Cl: QUARTERLY PRIVATE CONSUMPTION SERIES (billons $ 1980)

## GOODS AND SERVICES CONSUMED IN DOMESTIC MARKET

## DOMESTIC CONSUMPnON GOODS

## IMPORTED CONSUMPTION GOODS

## INDUSTRIAL PRODUCTS

|AGRI-|DURA|NON-DURAB<br>B NO-|LE GOOD|S|SERVI|-<br>DURAB|NON<br>. DURAB|.||NET<br>FO-<br>REIN|G|
|---|---|---|---|---|---|---|---|---|---|---|---|
|YEAR CULT|GOOD|FOODS FOO|D TOTA|L TOTA|L CES|TOTAL GOODS|GOOD|S TOTAL|TOTAL|PUR|C TOTAL|
|1980.1 257.8|277.0|<br>539.0 772.3|1311.3|1588.3|914.8|2760.9<br>28.3|<br>22.4|50.7|2811.6|-27.3|2784.|
|1980.2 223.4|305.2|<br>548.3 764.7|1313.0|1618.2|913.5|2755.1<br>41.5|29.4|70.9|2826.0|-6.2|2819.|
|1980.3 253.3|291.0|<br>564.5 776.5|1341.0|1632.0|939.4|2824.7<br>61.4|<br>42.3|103.7|2928.4|15.4|2943.|
|1980.4 311.1|307.1|584.0 806.6|1390.6|1697.7|951.1|2959.9<br>71.0|<br>58.1|129.1|3089.0|<br>6.5|3095.|
|1981.1256.4|311.8|546.2 805.3|1351.5|1663.3|956.2|2875.9<br>41.5|34.9|76.4|2952.3|-4.6|2947.|
|1981.2 231.5|333.2|573.1 815.7|1388.8|1722.0|966.8|2920.3<br>43.9|30.3|74.2|2994.5|18.2|3012.|
|1981.3 268.1|324.6|614.8 828.5|1443.3|1767.9|992.1|3028.1<br>71.9|30.7|102.6|3130.7|37.6|3168.|
|1981.4 338.4|315.1|598.4 866.3|1464.7|1779.8|994.5|3112.7<br>77.0|41.0|118.0|3230.7|30.7|3261.4|
|1982.1 295.9|313.1|<br>586.1 843.1|1429.2|1742.3|992.3|3030.5<br>38.3|29.3|67.6|3098.1|-26.1|3072.0|
|1982.2255.8|<br>315.5|584.3 872.5|1456.8|1772.3|994.8|3022.9<br>33.8|22.4|56.2|3079.1|-17.1|3062.0|
|1982.3 268.5|278.3|<br>561.1 857.5|1418.6|1696.9|1006.4|2971.8<br>26.9|16.5|43.4|3015.|2-22.2|2993.0|
|1982.4 283.8|266.8|<br>566.8 844.0|1410.8|1677.6|994.5|2955.9<br>16.9|10.3|27.2|2983.1|-28.1|2955.0|
|1983.1 268.1|249.4|538.2 614.3|1352.5|1601.S|1006.9|2876.9<br>13.4|6.0|19.4|2896.3|-83.9|2812.4|
|1983.2 253.3|255.0|547.3 842.2|1389.5|1644.5|1008.8|2906.6<br>14.1|7.4|21.5|2928.1|-58.0|2870.1|
|1983.3 261.3|224.2|525.0 825.6|1350.6|1574.8|1024.9|2861.C<br>13.2|7.1|20.3|2881.3|-40.5|2840.8|
|1983.4341.3|227.9|493.3 852.2|1345.5|1573.4|1026.2|2940.9<br>8.7|7.3|16.0|2956.9|-45.7|2911.2|
|1984.1 284.1|232.1|521.6 863.2|1384.8|1616.9|1027.0|2928.0<br>13.4|11.2|24.6|2952.6|-63.9|2888.7|
|1984.2 265.7|<br>249.1|517.5 848.2|1365.7|1614.8|1017.2|2897.7<br>13.2|10.7|23.9|2921.6|-38.3|2883.3|
|1984.3 286.8|252.9|555.9 843.1|1399.0|1651.9|1029.5|2968.2<br>16.5|9.8|26.3|2994.5|-21.8|2972.7|
|1984.4 339.7|265.8|555.5 865.3|1420.8|1686.6|1034.7|3061.0<br>19.2|11.2|30.4|3091.4|-24.7|3066.7|
|1985.1278.4|270.7|548.6 892.1|1440.7|1711.4|1040.7|3030.5<br>18.5|11.3|29.8|3060.3|-40.6|3019.7|
|1985.2 283.6|280.6|572.3 885.2|1458.0|1738.6|1042.2|3064.4<br>19.8|14.3|34.1|3098.5|-16.3|3082.2|
|1985.3 301.0|276.9|597.9 874.6|1472.5|1749.4|1046.9|3097.3<br>20.8|11.8|32.6|3129.9|-18.9|3111.0|
|1985.4 349.0|288.5|579.5 912.4|1491.9|1780.4|1031.0|3160.4<br>21.9|15.2|37.1|3197.5|-33.1|3164.4|
|1986.1 287.5|247.8|518.7 921.6|1440.3|1688.1|1034.8|3010.4<br>19.4|9.2|28.6|3039.0|-51.1|2987.9|
|1986.2 271.4|276.4|560.0 927.6|1487.6|1764.0|1042.2|3077.6<br>16.1|7.1|23.2|3100.8|-35.9|3064.9|
|1986.3 293.3|245.9|550.9 885.2|1436.1|1682.0|1052.4|3027.7<br>17.8|7.2|25.0|3052.7|-30.1|3022.6|
|1986.4 344.0|228.7|544.2 905.0|1449.2|1677.9|1037.5|3059.4<br>18.8|11.6|30.4|3089.8|-45.6|3044.2|
|1987.1 288.9|229.7|504.1 911.3|1415.4|1645.1|1045.9|2979.9<br>12.1|7.3|19.4|2999.3|-72.4|2926.9|
|1987.2 277.9|263.4|534.7 900.3|1435.0|1698.4|1048.8|3025.1<br>13.6|6.8|20.4|3045.5|-44.5|3001.0|
|1987.3 307.1|257.9|558.1 872.7|1430.8|1688.7|1068.2|3064.0<br>13.8|7.3|21.1|3085.1|-30.8|3054.3|
|1987.4 359.4|273.2|584.3 911.4|1495.7|1768.9|1065.4|3193.7<br>20.4|12.3|32.7|3226.4|-40.5|3185.9|
|1988.1 288.7|252.2|520.5 882.6|1403.1|1655.3|1066.4|3010.4<br>19.5|7.2|26.7|3037.1|-55.7|2981.4|
|1988.2 287.8|276.4|533.9 894.0|1427.9|1704.3|1059.9|3052.0<br>33.0|10.5|43.5|3095.5|-21.1|3074.4|
|1988.3 299.8|270.3|554.1 863.7|1417.8|1688.1|1074.7|3062.6<br>40.3|14.7|55.0|3117.6|-6.3|3111.3|
|1988.4 339.0|292.8|610.0 932.4|1542.4|1835.2|1075.7|3249.9<br>52.2|24.2|76.4|3326.3|-1.6|3324.7|
|1989.1 279.4|272.3|572.3 931.2|1503.5|1775.8|1087.7|3142.9<br>44.3|22.6|66.9|3209.8|-21.7|3188.1|
|1989.2 273.2|300.4|621.6 945.9|1567.5|1867.9|1091.5|3232.6<br>57.8|28.9|86.7|3319.3|-13.6|3305.7|
|1989.3 296.5|299.5|610.6 932.9|1543.5|1843.0|1113.8|3253.3<br>47.7|28.2|75.9|3329.2|-5.3|3323.9|
|1989.4 305.2|316.2|618.5 970.4|1588.9|1905.1|1118.4|3328.7<br>70.6|37.5|108.1|3436.8|-8.9|3427.9|
|1990.1 279.4|285.8|605.4 978.0|1583.4|1869.2|1127.7|3276.3<br>56.0|31.5|87.5|3363.8|-19.9|3343.9|
|1990.2 273.2|332.6|631.8 975.0|1606.8|1939.4|1130.5|3343.1<br>70.2|29.5|99.7|3442.8|-1.1|3441.7|
|1990.3 314.6|332.3|638.9 970.1|1609.0|1941.3|1157.5|3413.4<br>74.3|41.5|115.8|3529.2|<br>6.3|3535.5|
|1990.4 323.5|348.4|679.8 1003|1682.6|2031.0|1157.5|3512.0<br>87.3|51.4|138.7|3650.7|12.7|3663.4|
37 TABLE C2: IMPORTED PRIVATE CONSUMPTION GOODS (thousand dollars)

# NON BASIC

|YEAR|MONTH|BASIC<br>GOODS|DURABLES|NON<br>DURABLES|TOTAL|TOTAL|
|---|---|---|---|---|---|---|
|1980|JAN|2256|<br>36813|35289|72102|74358|
|1980|FEB|3626|<br>46315|33945|80260|83886|
|1980|MAR|3447|<br>49331|35691|85022|88469|
|1980|APR|4754|52184|33451|85635|90389|
|1980|MAY|3885|48668|37972|86640|90525|
|1980|JUN|3762|50216|35791|86007|89769|
|1980|JUL|4126|55567|37006|92573|96699|
|1980|AUG|4486|58908|37096|96004|100490|
|1980|SEP|3553|58612|45317|103929|107482|
|1980|OCT|5026|69703|60100|129803|134829|
|1980|NOV|4326|70690|51699|122389|126715|
|1980|DEC|5890|72997|62988|135985|141875|
|1981|JAN|4531|52711|49278|101989|106520|
|1981|FEB|4131|54522|50130|104652|108783|
|1981|MAR|5182|71228|50410|121638|126820|
|1981|APR|6053|66060|52403|118463|124516|
|1981|MAY|5363|70237|49700|119937|125300|
|1981|JUN|7452|75103|43531|118634|126086|
|1981|JUL|5499|77186|45878|123064|128563|
|1981|AUG|6853|97358|42503|139861|146714|
|1981|SEP|6797|128297|40935|169232|176029|
|1981|OCT|7505|105574|56109|161683|169188|
|1981|NOV|6798|79569|49598|129167|135965|
|1981|DEC|9327|95775|44008|139783|149110|
|1982|JAN|5853|58675|53554|112229|118082|
|1982|FEB|7058|60525|44438|104963|112021|
|1982|MAR|4555|62838|40871|103709|108264|
|1982.|APR|5304|59718|40489|100207|105511|
|1982|MAY|3031|48382|34182|82564|85595|
|1982|JUN|1950|53870|32351|86221|88171|
|1982|JUL|2079|42055|32984|75039|77118|
|1982|AUG|1532|40442|21960|62402|63934|
|1982|SEP|1525|26282|11653|37935|39460|
|1982|OCT|3085|23785|13658|37443|40528|
|1982|NOV|1351|11713|7095|18808|20159|
|1982|DEC|4599|13030|8933|21963|26562|
38

# (cont. TABLE C2)

|||BASIC|NON BAS|IC<br>NON|||
|---|---|---|---|---|---|---|
|YEAR|MONTH|GOODS|DURABLES D|URABLES|1lOTAL|TOTAL|
|1983<br>|JAN<br>|692|8188|4782|12970|13662|
|1983|FEB|683|9918|3602|13520|14203|
|1983<br>|MAR<br>|1502<br>|8299|3497|11796|13298|
|1983|APR|2242|7600|3212|10812|13054|
|1983<br>|MAY<br>|1347|1C148|5444|15592|16939|
|1983|JUN|1734|12745|7258|20003|21737|
|1983<br>|JUL<br>|3048|16472|7457|23929|26977|
|1983<br>|AUG<br>|2694<br>|12812<br>|6166|18978|21672|
|1983<br>|SEP<br>|^728|5727|5290|110i7|13745|
|1983<br>|OCT<br>|2310<br>|9088<br>|5376|14464|16774|
|1983|NOV|3138|8205|8592|16797|19935|
|1983<br>|DEC<br>|5443|10031|9077|19108|24551|
|1984|JAN|3056|7177|4227|11404|14460|
|1984<br>|FEB<br>|2765|9238|6727|15965|18730|
|1984<br>|MAR<br>|5526<br>|10678<br>|11588|22266|27792|
|1984|APR|4350|9784|10578|20362|24712|
|1984<br>|MAY<br>|5027<br>|12249|7591|19840|24867|
|1984|JUN|5992|10845|8686|19531|25523|
|1984<br>|JUL<br>|4632|10650|6829|17479|22111|
|1984|AUG|5257|15432|7834|23266|28523|
|1984<br>|SEP<br>|5877|11343|7399|18742|24619|
|1984<br>|OCT<br>|6631<br>|18480<br>|8499<br>|26979|33610|
|1984<br>|NOV<br>|6502|17282|11280|28562|35064|
|1984<br>|DEC<br>|7974<br>|18703|12038|30741|38715|
|1985<br>|JAN<br>|5646|13777|7217|20994|26640|
|1985<br>|FEB<br>|9923|14222|9133|23355|33278|
|1985<br>|MAR<br>|14992<br>|19410|12566|31976|46968|
|1985|APR|10844|18048|13449|31497|42341|
|1985<br>|MAY<br>|13884|19995|14182|34177|48061|
|1985<br>|JUN<br>|8246|15542|11235|26777|35023|
|1985|JUL|8743|20590|11491|32081|40824|
|1985<br>|AUG<br>|8732<br>|20891|11329|32220|40952|
|1985|SEP|8096|19921|12144|32065|40161|
|1985<br>|OCT<br>|10417<br>|29679<br>|15146|44825|55242|
|1985|NOV|10723|25098|18013|43111|53834|
|1985|DEC|9652|26658|23508|50166|59818|
39

# (cont. TABLE C2)

# NON BASIC

|YEAR|MONTH|BASIC<br>GOODS|DURABLES|NON<br>DURABLES|TOTAL|TOTAL|
|---|---|---|---|---|---|---|
|1986|JAN|-3169|26858|11061|37919|34750|
|1986|FEB|6974|<br>21378|11774|33152|40126|
|1986|MAR|5706|<br>21299|10364|31663|37369|
|1986|APR|7184|<br>25438|11903|37341|44525|
|1986|MAY|6190|<br>21522|8615|30137|36327|
|1986|JUN|5769|<br>20730|9361|30091|35860|
|1986|JUL|6722|<br>27777|9355|37132|43854|
|1986|AUG|6559|<br>17821|8150|25971|32530|
|1986|SEP|5282|17599|7949|25548|30830|
|1986|OCT|4613|21135|10807|31942|36555|
|1986|NOV|4136|17544|10050|27594|31730|
|1986|DEC|6498|19718|15146|34864|41362|
|1987|JAN|3007|13679|80138|<br>21767|24774|
|1987|FEB|3410|15433|8505|23938|27348|
|1987|MAR|4383|<br>19128|12390|<br>31518|<br>35901|
|1987|APR|3321|<br>20439|8648|<br>29087|<br>32408|
|1987|MAY|4285|<br>18070|9866|<br>27936|<br>32221|
|1987|JUN|3832|<br>20219|10677|<br>30896|<br>34728|
|1987|JUL|3760|<br>20797|11622|<br>32319|<br>36079|
|1987|AUG|4031|<br>22977|10994|<br>33971|<br>38002|
|1987|SEP|3921|<br>23722|12855|36577|40498|
|1987|OCT|6360|<br>29071|14303|<br>43374|<br>49734|
|1987|NOV|9312|<br>29835|17553|<br>47388|<br>56700|
|1987|DEC|12073|<br>36451|25911|<br>62362|<br>74435|
|1988|JAN|6561|<br>27.83|11424|<br>38607|<br>45168|
|1988|FEB|7329|<br>39764|14577|<br>54341|<br>61670|
|1988|MAR|5677|<br>51240|17811|<br>69051|<br>74728|
|1988|APR|7987|<br>58404|22085|80489|<br>88476|
|1988|MAY|10025|<br>71175|19439|<br>90614|<br>100639|
|1988|JUN|20860|<br>79026|24888|103914|<br>124774|
|1988|JUL|38770|70605|28199|98804|137574|
|1988|AUG|43126|<br>84621|26987|111608|<br>154734|
|1988|SEP|40627|<br>74672|28495|103167|<br>143794|
|1988|OCT|41626|<br>88184|34498|122682|<br>164308|
|1988|NOV|36422|<br>116576|54099|170675|<br>207097|
|1988|DEC|46061|<br>116250|59995|176245|<br>222306|
40

# (cont. TABLE C2)

|||BASIC|NON BAS|IC<br>NON|||
|---|---|---|---|---|---|---|
|YEAR|MONTH|GOODS|DURABLES|DURABLES|TOTAL|TOTAL|
|1989|JAN|22833|<br>74396|38370|112766|<br>135599|
|1989|FEB|21251|<br>83443|46982|130425|<br>151676|
|1989|MAR|24809|<br>91819|42428|134247|<br>159056|
|1989|APR|26011|<br>108300|50386|158686|<br>184697|
|1989|MAY|29664|<br>106827|52803|15963C|<br>189294|
|1989|JUN|31116|<br>110822|59447|170269|201385|
|1989|JUL|27999|89911|53856|143767|171766|
|1989|AUG|29516|108746|66263|175009|204525|
|1989|SEP|24915|117306|66308|183614|208529|
|1989|OCT|34036|150132|80906|231038|265074|
|1989|NOV|30374|178524|85623|264147|294521|
|1989|DEC|32118|152687|89236|241923|274041|
|1990|JAN|26729|101042|60404|161446|188175|
|1990|FES|25690|100592|56045|156637|182327|
|1990|MAR|33560|116633|62243|178876|212436|
|1990|APR|24907|122934|56463|179397|204304|
|1990|MAY|30142|142755|621b5|204910|235052|
|1990|JUN|38248|184784|70875|255659|293907|
|1990|JUL|29183|155719|84472|240191|269374|
|1990|AUG|51876|155397|88954|244351|296227|
|1990|SEP|28941|152193|85360|237553|266494|
|1990|OCT|43195|211963|124282|336245|379440|
|1990|NOV|69677|223872|134247|358119|427796|
|1990|DEC|53210|192588|111255|303843|357053|
|1991|JAN|78483|145472|85324|230796|309279|
|1991|FEB|74775|147473|86168|233641|308416|
|1991|MAR|49131|154257|80416|234673|283804|
41

# TABLE C3: PRIVATE CONSUMPTION

(billions $ 1980)

||||NON-||
|---|---|---|---|---|
|YEAR<br>T|TAL<br>|URABLES|DURABLES||
|<br>|<br>|||SERVICES|
|1980.1|2784.3|305.29|<br>1564.21|<br>914.80|
|1980.2|2819.8|346.67|<br>2473.13|<br>913.50|
|1980.3|2943.8|352.36|<br>2591.44|<br>939.40|
|1980.4|3095.5|378.07|<br>2717.43|<br>951.10|
|1981.1|2947.7|353.33|<br>2594.37|<br>956.20|
|1981.2|3012.7|377.13|<br>2635.57|<br>966.80|
|1981.3|3168.3|396.50|<br>2771.80|<br>992.10|
|1981.4|3261.4|392.08|<br>2869.32|<br>994.50|
|1982.1|3072.0|351.45|<br>2720.55|<br>992.30|
|1982.2|3062.0|349.34|<br>2712.66|<br>994.80|
|1982.3|2S93.0|305.22|<br>2687.78|<br>1006.40|
|1982.4|2955.0|283.68|<br>2671.32|<br>994.50|
|1983.1|2812.4|262.78|<br>2j49.62|1006.90|
|1983.2|2870.1|269.13|<br>2600.97|<br>1008.80|
|1983.3|2840.8|237.38|<br>2603.42|1024.90|
|1983.4|2911.2|236.58|<br>2674.62|1026.20|
|1984.1|2888.7|245.53|<br>2643.17|1027.00|
|1984.2|2883.3|262.25|<br>2621.05|1017.20|
|1984.3|2972.7|269.45|2703.25|1029.50|
|1984.4|3066.7|284.99|2781.71|1034.70|
|1985.1<br>|3019.7<br>|2e9.21|2730.49|1040.70|
|1985.2|3082.2|300.36|2781.84|1042.20|
|1985.3|3111.0|297.6"|2813.33|1046.90|
|1985.4|3164.4|310.38|2854.02|1031.00|
|1986.1|2987.9|267.16|2720.74|1034.80|
|1986.2|3064.9|292.50|2772.40|1042.20|
|1986.3|3022.6|263.72|2758.88|1052.40|
|1986.4|3044.2|247.51|2796.69|1037.50|
|1987.1|2926.9|241.82|2685.08|1045.90|
|1987.2|3001.0|277.03|2723.97|1048.80|
|1987.3|3054.3|271.74|2782.56|1068.20|
|1987.4|3185.9|293.56|2892.34|1065.40|
|1988.1|2981.4|271.68|2709.72|1066.40|
|1988.2|3074.4|309.40|2765.00|1059.90|
|1988.3|3111.3|310.62|2800.68|1074.70|
|1988.4|3324.7|345.03|2979.67|1075.70|
|1989.1|3188.1|316.55|2871.55|1087.70|
|1989.2|3305.7|358.24|2947.46|1091.50|
|1989.3|3323.9|347.24|2976.66|1113.80|
|1989.4|3427.9|386.79|3041.11|1118.40|
|1990.1|3343.9|341.84|3002.06|1127.70|
|1990.2|3441.7|402.78|3038.92|1130.50|
|1990.3|3535.5|406.60|3128.90|1157.50|
|1990.4|3663.4|435.72|3227.68|1157.50|
42

# TABLE C4: COMPARISON OF ANNUAL AND QUATERLY PRIVATE CONSUMPTION SERIES (billons $ 1980)

|YEAR<br>ANNUAL|QUARTERL|Y|
|---|---|---|
|(1)|(2)|(1)y(2)|
|1980<br>2909|2910.85|0.999|
|1981<br>3123|3097.525|1.00i8|
|1982<br>3046|3020.5|1.008|
|1983<br>2883|2858.625|1.008|
|1984<br>2977|2952.85|1.008|
|1985<br>3083|3094.325|0.996|
|1986<br>3011|3029.9|0.994|
|1987<br>2984|3042.025|0.981|
|1988<br>3047|3122.95|0.976|
|1989<br>3220|3311.4|0.973|
|1990<br>3387|3496.125|0.969|
43

# TABLE C5: GOODS AND SERVICES CONSUMED IN DOMESTIC MARKET (millons pesos 1980)

# INDUSTRIAL PRODUCTS

|||<br>|NON-DURA|BLE GOODS|||||
|---|---|---|---|---|---|---|---|---|
||AGRI-|DURAB.|||||SERVI-||
|YEAR|CULTUR|GOODS|FOOD|NON-FOOD|TOTAL|TOTAL|CES|TOTAL|
|Jan-80|230,979|273,521|786,874|533,698|1,320,572|1,594,092|912,467|2,737,538|
|Feb-80|211,938|268,335|772,156|536,963|1,309,119|1,577,455|914,512|2,703,905|
|Mar-80|330,483|297,630|771,995|562,150|1,334,145|1,631,775|917,421|2,879,679<br>|
|Apr-80|233,458|292,335|764,889|531,616|1,296,505|1,588,840|911,597|2,733,895|
|May-80|224,306|310,911|773,880|570,459|1,344,339|1,655,249|914,323|2,793,878<br>|
|Jun-80|212,436|320,694|770,570|557,346|1,327,917|1,648,611|914,580|2,775,627|
|Jul-80|238,903|315,671|772,904|574,888|1,347,791|1,663,463|939,504|2,841,869|
|Aug-80|251,663|298,738|796,873|574,463|1,371,335|1,670,073|950,131|2,871,867|
|Sep-80|269,334|267,620|776,415|564,046|1,340,461|1,608,081|928,565|2,805,980<br>|
|Oct-80|275,778|301,885|801,971|592,865|1,394,836|1,696,721|943,606|2,916,104|
|Nov-80|275,778|315,549|788,603|604,054|1,392,657|1,708,206|947,727|2,931.710|
|Dec-80|352,770|312,795|843,479|573,817|1,417,295|1,730,090|961,968|3,044,828|
|Jan-81|234,000|299,820|820,704|542,327|1,363,031|1,662,851|952,439|2,849,290|
|Feb-81|197,017|304,431|787,957|53',924|1,323,881|1.628,312|957,900|2,783,230|
|Mar-81|338,182|338,501|822,694|576,270|1,398,965|1,737,466|958,261|3,033,909|
|Apr-81|239,606|317,428|815,947|535.925|1,351,872|1,669,300|964,221|2,873,127|
|May-81|230,707|341,098|811,726|594,798|1,406,524|1,747,622|962,316|2,940,644|
|Jun-81|224,187|348,542|834,083|604,704|1,438,788|1,787.329|973,863|2,985,380|
|Jul-81|265,437|355,874|822,310|622,695|1,445,005|1,800,880|992,628|3,058,944|
|Aug-81|271,253|324,497|839,568|633,825|1,473,393|1,797,890|1,001,966|3,071,109<br>|
|Sep-81|267,610|301,845|838,926|608,316|1,447,241|1,749,086|981,706|2,998,403|
|Oct-81|295,427|315,184|855,519|613,799|1,469,318|1,784,502|985,572|3,065,500|
|Nov-81|295,427|325,221|867,683|620,013|1,487,696|1,812,917|994,558|3,102,901<br>|
|Dec-81|378,494|313,431|888,009|580,569|1,468,578|1,782,009|1,003,371|3,163,874|
|Jan-82|266,742|294,466|855,782|571,421|1,427,203|1,721,669|990,001|2,978,411|
|Feb-82|264,526|293,250|813,486|572,416|1,385,902|1,679,152|982,945|2,926,623|
|Mar-82|356,432|357,481|870,131|635,250|1,505,381|1,862,862|1.003,954|3,223,248|
|Apr-82|265,289|313,601|885,815|543,559|1,429,374|1,742,975|1,001,044|3,009,308|
|May-82|259,655|318,104|878,839|615,798|1,494,637|1,812,741|993,120|3,065,516|
|Jun-82|242,456|320,929|871,143|607,698|1,478,841|1,799,769|990,236|3,032,462|
|Jul-82|252,367|293,404|879,999|548,945|1,428,944|1,722,348|1,014,726|2,989,441|
|Aug-82|266,282|283,952|838,564|629,683|1,468,248|1,752,200|1,020,172|3,038,654|
|Sep-82|286,850|267,410|830,892|559,360|1,390,252|1,657,662|984,302|2,928,814|
|Oct-82|250,610|266,614|843,952<br>|581,055<br>|1,425,007<br>|1,691,621<br>|991,892<br>|2,934,124<br>|
|Nov-82|250,610|292,898|872,238|568,433|1,440,671|1,733,569|989,037|2,973,217|
|Dec-82|314,410|249,829|872,238|521,205|1,393,443|1,643,272|1,002,571|2,960,253|
44

# (cont. TABLE C5)

# INDUSTRIAL PRODUCTS

# NON-DURABLE GOODS

|YEAR|AGRI-<br>CULTUR|DURAB.<br>GOODS|FOOD|NON-FOOD|TOTAL|TOTAL|SERVI-<br>CES|TOTAL|
|---|---|---|---|---|---|---|---|---|
|Jan-83|<br>243,156|<br>242,876|<br>842,764|525,732|1,368,496|1,611,372|<br>999,791|2,854,31|
|Feb-83|222,416|<br>247,131|<br>802,331|549,560|1,351,890|1,599,022|1,006,132|2,827,570|
|Mar-83|<br>338,728|<br>267,771|814,325|550,810|1,365,136|1,632,907|1,014,777|2,986,41|
|Apr-83|263,389|<br>269,277|835,893|553,599|1,389,492|1,658,769|1,012,188|2,934,34|
|May-83|254,888|<br>258,096|846,361|551,177|1,397,538|1,655,634|1,008,370|2,918,892|
|Jun-83|<br>241,623|<br>251,410|862,955|554,493|1,417,448|1,668,858|1,005,843|2,916,324|
|Jul-83|250,582|231,273|842,511|548,854|1,391,366|1,622,639|1,032,539|2,905,75|
|Aug-83|260,995|239,274|849,189|545,327|1,394,516|1,633,790|1,037,441|2,932,22|
|Sep-83|272,324|216,074|803,444|519,234|1,322,S77|1,538,752|1,004,721|2,815,79|
|Oct-83|300,483|227,564|822,234|529,087|1,351,321|1,578,885|1,017,067|2,896,43|
|Nov-83|300,483|237,757|867,060|522,929|1,389,988|1,627,746|1,024,991|2,953,22|
|Dec-83|380,824|231,232|887,131|481,635|1,368,766|1,599,998|1,036,542|3,017,364|
|Jan-84|259,278|224,670|873,743|511,277|1,385,020|1,,o09,690|1,021,566|2,890,534|
|Feb-84|219,423|236,121|853,360|531,984|1,385,344|1,621,465|1,028,138|2,869,026|
|Mar-84|373,599|245,711|884,538|567,989|1,452,526|1,698,237|1,031,295|3,103,132|
|Apr-84|275,067|233,469|843,669|498,768|1,342,437|1,575,906|1,024,078|2,875,051|
|May-84|264,046|261,217|861,709|548,555|1,410,264|1,671,482|1,018,397|2,953,925|
|Jun-84|257,987|264,655|864,772|550,861|1,415,633|1,680,287|1,009,124|2,947,399|
|Jul-84|283,733|262,826|849,047|565,298|1,414,344|1,677,171|1,035,705|2,996,609|
|Aug-84|288,972|266,910|878,792|580,118|1,458,909|1,725,820|1,048,507|3,063,298|
|Sep-84|286,796|241,412|821,825|560,0C3|1,381,892|1,623,304|1,004,288|2,914,388|
|Oct-84|300,526|271,331|849,959|598,815|1,448,774|1,720,105|1,023,723|3,044,354|
|Nov-84|300,526|274,600|882,940|584,457|1,467,397|1,741 ,997|1,035,779|3,078,302|
|Dec-84|377,751|264,165|879,991|529,256|1,409,247|1,673,413|1,044,598|3,095,763|
|Jan-85|251,627|259,377|908,961|549,831|1,458,792|1,718,169|1,034,360|3,004,155|
|Feb-85|250,032|273,322|883,936|553,110|1,437,046|1,710,368|1,037,792|2,998,191|
|Mar-85|333,541|287,539|905,667|588,760|1,494,427|1,781,966|1,049,948|3,165,456|
|Apr-85|292,424|265,405|901,823|559,314|1,461,136|1,726,541|1,046,988|3,065,953|
|May-85|289,416|289,161|898,553|595,628|1,494,181|1,783,341|1,038,552|3,111,309|
|Jun-85|268,960|295,830|878,328|598,698|1,477,027|1,772,857|1,041,060|3,082,877|
|Jul-85|282,718|295,548|892,492|618,431|1,510,923|1,806,471|1.057,848|3,147,038|
|Aug-85|298,025|279,147|896,456|613,120|1,509,577|1,788,723|1,066,628|3,153,377|
|Sep-85|322,257|265,826|857,207|583,750|1,440,957|1,706,783|1,016,223|3,045,263|
|Oct-85|312,580|295,239|908,550|628,933|1,537,483|1,832,722|1,021,447|3,166,750|
|Nov-85|312,580|297,112|917,929|592,794|1,510,723|1,807,835|1,030,235|3,150,651|
|Dec-85|385,556|284,948|934,236|539,297|1,473,533|1,758,481|1,041,318|3,185,355|
45

# ont. TABLE C5)

# INDUSTRIAL PRODUCTS

||AGRI-|DURAB.|NON-DUR|ABLE GOODS|||SERVI-||
|---|---|---|---|---|---|---|---|---|
|YEAR|CULTUR|GOODS|FOOD|NON-FOOD|TOTAL|TOTAL|CES|TOTAL|
|Jan-86|<br>260,035|<br>250,985|<br>948,960|<br>520,015|1,468,975|1,719,959|1,028,403|3,008,398|
|Feb-86|242,758|<br>254,159|<br>925,242|525,911|1,451,153|1,705,312|1,031,766|2,979,836|
|Mar-86|<br>359,707|<br>247,944|914,341|<br>529,055|<br>1,443,396|<br>1,691,339|<br>1,044,231|<br>3,095,277|
|Apr-86|<br>281,396|<br>275,086|958,308|<br>577,453|<br>1,535,761|<br>1,810,847|<br>1,042,226|<br>3,134,469|
|May-86|275,366|<br>293,314|939,692|<br>557,220|<br>1,496,912|<br>1,790,226|<br>1,040,865|<br>3,106,458|
|Jun-86|257,438|<br>276,705|908,726|<br>567,368|<br>1,476,094|<br>1,752,799|<br>1,043,509|<br>3,053,746|
|Jul-86|281,497|262,528|905,499|<br>574,682|<br>1,480,180|<br>1,742,709|<br>1,064,927|<br>3,089,132|
|Aug-86|292,317|250,669|909,866|<br>553,829|<br>1,463,695|<br>1,714,364|<br>1,062,292|<br>3,068,972|
|Sep-86|306,086|240,264|866,906|<br>549,357|<br>1,416,262|<br>1,656,527|<br>1,029,982|<br>2,992,594|
|Oct-86|306,085|236,425|888,805|<br>586,812|<br>1,475,617|<br>1,712,042|<br>1,033,180|<br>3,051,307|
|Nov-86|306,085|227,897|906,429|<br>565,100|<br>1,471,529|<br>1,699,426|<br>1,037,536|<br>3,043,047|
|Dec-86|382,843|240,504|950,180|<br>514,331|<br>1,464,511|<br>1,705,015|<br>1,041,784|<br>3,129,641|
|Jan-87|264,361|220,946|927,653|479,183|1,406,836|1,627,783|1,038,742|2,930,886|
|Feb-87|224,717|227,682|923,927|<br>501,997|<br>1,425,924|<br>1,653,607|<br>1,043,703|<br>2,922,026|
|Mar-87|377,622|257,272|922,064|561,791|1,483,854|1,741,127|1,055,255|3,174,004|
|Apr-87|287,734|253,874|900,976|522,891|1,423,867|1,677,741|1,055,045|3,020,520|
|May-87|278,036|267,985|936,673|548,512|1,485,185|1,753,169|1,048,170|3,079,375|
|Jun-87|267,929|285,247|913,758|565,570|1,479,328|1,764,575|1,043,185|3,075,689|
|Jul-87|299,708|274,451|900,925|565,041|1,465,966|1,740,417|1,074,314|3,114,439|
|Aug-87|307,041|259,447|884,874|<br>566,159|<br>1,451,033|<br>1,710,480|<br>1,080,280|<br>3,097,801|
|Sep-87|311,852|259,547|887,521|591,861|1,479,382|1,738,929|1,050,006|3,100,786|
|Oct-87|318,839|271,527|902,146|<br>624,267|<br>1,526,413|<br>1,797,940|<br>1,060,990|<br>3,177,769|
|Nov-87|318,839|282,132|917,135|604,171|1,521,305|1,803,437|1,066,886|3,189,163|
|ec-87|398,816|286,073|956,077|<br>559,349|<br>1,515,426|<br>1,801,499|<br>1,068,324|<br>3,268,639|
|an-88|278,700|248,426|916,282|<br>512,897|<br>1,429,179|<br>1,677,605|<br>1,059,700|<br>3,016,005|
|Feb-88|253,900|259,771|885,899|<br>542,917|<br>1,428,816|<br>1,688,587|<br>1,066,100|<br>3,008,587|
|Mar-88|333,500|269,166|888,464|547,949|1,436,413|1,705,579|1,073,400|3,112,479|
|Apr-88|291,100|270,935|918,918|545,086|1,464,004|1,734,939|1,063,600|3,089,639|
|May-88|302,800|286,066|922,810|534,354|1,457,164|1,743,230|1,059,000|3,105,030|
|un-88|269,400|295,154|897,167|<br>573,498|<br>1,470,665|<br>1,765,819|<br>1,057,100|<br>3,092,319|
|Jul-88|281,700|271,557|857,310|<br>545,526|<br>1,402,836|<br>1,674,393|<br>1,078,300|<br>3,034,393|
|ug-88|290,40C|279,231|907,150|<br>589,457|<br>1,496,607|<br>1,775,838|<br>1,088,400|<br>3,154,638|
|Sep-88|327,300|285,113|882,314|<br>571,550|<br>1,453,864|<br>1,738,977|<br>1,057,400|<br>3,123,677|
|Oct-88|298,2W|295,990|878,667|633,339|1,512,006|1,807,996|1,069,600|3,175,796|
|ov-88|344,400|312,923|971,766|651,031|1,622,797|1,935,720|1,076,000|3,356,120|
|ec-88|374,400|292,449|987,184|589,469|1,576,652|1,869,101|1,081,500|3,325,001|
46

# (cont. TABLE C5)

# INDUSTRIAL PRODUCTS

||AGRI-|DURAB.|NON-DURA|BLE GOODS|||SERVI-||
|---|---|---|---|---|---|---|---|---|
|YEAR|CULTUR|GOODS|FOOD|NON-FOOD|TOTAL|TOTAL|CES|TOTAL|
|Jan-89<br>|<br>273,000<br>|<br>283,647<br>|<br>952,895|<br>573,309|1,526,204|1,809,850|1.085,600|3,168,450|
|Feb-89|288,400|<br>278,651|<br>930,153|<br>591,226|1,521,379|1.800,030|1,083,700|3,172,130|
|Mar-89|<br>336,700|<br>276,076|<br>951,641|579,126|1,530,768|1,806,843|1,093,800|3,237,343|
|Apr-89|<br>272,600|<br>292,165|<br>965,235|622,402|1,587,637|1,879,802|1,088,100|3,240,502|
|May-89|280,300|<br>306,394|962,233|619,901|<br>1,582,134|1,888,528|1,095,500|3,264,328|
|Jun-89|266,700|326,969|972,839|654,219|1,627,058|1,954,027|1.090,900|3,311,627|
|Jul-89|<br>288,600|303,093|945,349|611,875|1,557,224|1,860,317|<br>1,112,300|3,261,217|
|Aug-89|292,800|327,026|974,843|644,506|1,619,349|1,946,375|1,128,700|3,367,875|
|Sep-89|308,000|295,788|952,741|615,037|1,567,778|1,863,566|1,100,400|3,271,966|
|Oct-89|272,700|331,343|957,420|652,940|1,610,360|1,941,703|1,109,200|3,323,603|
|Nov-89|307,100|338,955|1,020,094|668,128|1,688,221|2,027,177|1,118,400|3,452,677|
|Dec-89|335,900|308,922|989,232|572,076|1,561,307|1,870,230|1,127,600|3,333,730|
|Jan-90|276,500|276,464|1,026,526|594,286|1,620,813|1,897,276|1,122,800|3,296,576|
|Feb-90|202,500|285,035|953,904|602,280|1,556,184|1,841,219|1,127,400|3,171,119|
|Mar-90|361,600|318,244|1,021,953|653,209|1,675,161|1,993,405|1,132,000|3,487,905|
|Apr-90|289,100|295,965|983,576|595,281|1,578,857|1,874,822|1,135,100|3,299,022|
|May-90|289,900|348,037|1,007,554|669,229|1,676,783|2,024,820|1,130,500|3,445,220|
|Jun-90|288,000|376,515|1,001,641|662,015|1,663,656|2,040,172|1,125,900|3,454,072|
|Jul-90|316,300|349,583|987,606|654,004|1,641,610|1,991,193|1,160,500|3,467,993|
|Aug-90|311,800|345,243|1,018,700|674,482|1,693,182|2,038,425|1,175,200|3,525,425|
|Sep-90|315,700|304,983|968,382|626,065|1,594,447|1,899,431|1,136,800|3,351,931|
|Oct-90|285,000|363,249|1,002,755|733,421|1,736,176|2,099,425|1,147,500|3,531,925|
|Nov-90|325,100|365,020|1,030,468|733,946|1,764,414|2,129,435|1,153,800|3,608,335|
|Dec-90|360,300|349,846|1,018,610|617,546|1,636,156|1,986,002|1,171,200|3,517,502|
|Jan-88|278,700|248,426|916,282|512,897|1,429,179|1,677,605|1,059,700|3,016,005|
|Feb-88|253,900|259,771|885,899|542,917|1,428,816|1,688,387|1,066,100|3,008,587|
|Mar-88<br>|333,500|269,166|888,464|547,949|1,436,413|1,705,579|1,073,400|3,112,479|
|Apr-88|291,100|270,935|918,918|545,086|1,464,004|1,734,939|1,063,600|3,089,639|
|May-88|302,800|286,066|922,810|534,354|1,457,164|1,743,230|1,059,000|3,105,030|
|Jun-88|269,400|295,154|897,167|<br>573,498|<br>1,470,665|<br>1,765,819|<br>1,057,.00|<br>3,092,319|
|Jul-88|281,700|271,557|857,310|545,526|1,402,836|1,674,393|1,078,300|3,034,393|
|Aug-88|290,400|279,231|907,150|<br>589,457|<br>1,496,607|<br>1,775,838|<br>1,088,400|<br>3,154,638|
|Sep-88|327,300|285,113|882,314|571,550|1,453,864|1,738,977|1,057,400|3,123,677|
|Oct-88|298,200|295,990|878,667|<br>633,339|<br>1,512,006|<br>1,807,996|<br>1,069,600|<br>3,175,796|
|Nov-88<br>|344,400|312,923|971,766|651,031|1,622,797|1,935,720|1,076,000|3,356,120|
|Dec-88|374,400|292,449|987,184|589,469|1,576,652|1,869,101|1,081,500|3,325,001|
47 COMPARSION OF QUARTERLY ANJ;MONTHLY (millons $ 1980) TABLE C6:

||QUAR-||<br>|QUARTER<br>|LY|MONTHLY<br>||||
|---|---|---|---|---|---|---|---|---|---|
||TERLY<br>|MONTHLY||DOMES-||DOMES-||DOMES-||
|<br> <br>|<br> <br>PRIVATE<br>CONSUM.|<br>PRIVATE<br>CONSUM.|<br>|TIC<br>I<br>GOODS<br>|MPL,ED<br>GOODS|TIC<br>I<br>GOODS|MPORTED<br>GOODS|TIC<br>GOODS|IMPORTED<br>GOODS|
|YEAR|(1)|(2)|(lY(2)|(4)|(5)|(6)|(7)|(4Y(6)|(5Y(7)|
|19S0.1|2784300|2847870|0.978|2760900|50700|2773707|74163|0.995|0.684<br>|
|1980.2|2819800|2847327|0.990|2755100|70900|2767800|79527|0.995|0.892|
|1980.3<br>|2943800<br>|2927077<br>|1.006<br>|2824700<br>|*03700<br>|2839906<br>|87171<br>|0.995<br>|1.190<br>|
|1980.4|3095500|3077752|1.006<br>|2959900<br>|129100<br>|2964214<br>|113538<br>|0.999<br>|1.137<br>|
|1981.1|2947700|2982521|0.988|2875900|76400|2888809|93712|0.996|0.815|
|1981.2|3012700|3034396|0.993|2920300|74200<br>|2933050<br>|101348<br>|0.996<br>|0.732<br> <br>|
|1981.3|316W300|3163609|1.001<br>|3028100<br>|102600<br>|3042819<br>|120790<br>|0.995<br>|<br>0.849<br> <br>|
|1981.4|3261400|3232031|1.009|3112700<br>|118000<br>|3110758<br>|121273<br>|1.001<br>|<br>0.973<br>|
|1982.1|3072000|3131476|0.981|3030500|67600|3042761|88715<br>|0.996<br>|0.762<br>|
|1982.2|3062000|3108255|0.985|3022900|56200|3035762|72493<br>|0.996<br>|0.775<br>|
|1982.3|2993000|3032603|0.987|2971800|43400|2985637|46967|0.995|0.924|
|1982.4|2965000|2978647|0.992|2965900|27200|2955865|22782|1.000|1.194<br>|
|1983.1|2812400|2900106|0.970|2876900|19400|2889433|10673|0.996|1.818|
|1983.2|2870100|2936422|0.977|2906600|21500|2923187|13235|0.994|1.624<br>|
|1983.3|2840800|2900374|0.979|2861000|20300|2884593|15781<br>|0.992<br>|1.286<br>|
|1983.4<br>|2911200<br>|2970976<br>|0.980<br>|2940900<br>|16000<br>|2055673<br>|15303<br>|0.995<br>|1.046<br>|
|1984.1<br>|2888700<br>|2969346<br>|0.973<br>|2928000<br>|24600<br>|2954231<br>|15116<br>|0.991<br> <br>|1.627<br>|
|1984.2|2883300|2943928|0.979|2897700|23900|2925458|184,70|<br>0.991<br>|1.294<br>|
|1984.3<br>|2972700<br>|3009849<br>|0.988<br>|2968200<br>|26300<br>|2991432<br>|18418<br>|0.992<br>|1.428<br>|
|1984.4|3066700|3099214|0.990|3061000|30400|3072806<br>|26408<br>|0.996<br>|1.151<br>|
|1985.1<br>|3019700<br>|3082275<br>|0.980<br>|3030500<br>|29800<br>|3055934<br>|26341<br>|0.992<br>|1.131<br>|
|1985.2|3082200|3117348|0.989|3064400|34100|3086713|30635<br>|0.993<br>|1.113<br>|
|1985.3|3111000|3145012|0.989|3097300<br>|32600<br>|3115226<br>|29786<br>|0.994<br>|1.094<br>|
|1985.4|3164400|3209174|0.986|3160400|37100|3167585|41589|0.998|0.892|
|1986.1|2987900|3055630|0.978|3010400|28600|3027837|27793|0.994|1.029|
|1986.2|3064900|3127006|0.980|3077600<br>|23200<br>|3098224<br>|28782<br>|0.993<br>|0.806<br>|
|1986.3|3022600|3076448|0.982|3027700|25000|3050233|26216|0.993|0.954<br>|
|1986.4<br>|3044200<br>|3101339<br>|0.982<br>|3059400<br>|30400<br>|3074665<br>|26674<br>|0.995<br>|1.140<br>|
|1987.1|2926900|3030022|0.966|2979900|19400|3008972|21050|0.990<br>|0.922<br>|
|1987.2|3001000|3081679|0.974|3025100|20400|3058528|23151|0.989<br>|0.881<br>|
|1987.3|3054300|3130883|0.976|3064000|21100|3104342|26541|0.987|0.795|
|1987.4|3185900|3253568|0.979|3193700|32700<br>|3211857<br>|41711<br>|0.994<br>|0.784<br>|
|1988.1|2981400|3087197|0.966|3010400|26700|3045690|41507|0.988|0.643<br>|
|1988.2|3074400|316686|0.971|3052000|43500<br>|3095683<br>|71144<br>|0.986<br>|0.611<br>|
|1988.3|3111300|3201706|0.972|3062600|55000|3104236<br>|97470<br>|0.987<br>|0.564<br>|
|19884|3324700|3417215|0.973|3249900|76400|3285639|131576<br>|0.989<br>|0.581<br>|
|1989.1<br>|3189100<br>|3290270<br>|0.969<br>|3142900<br>|56900<br>|3192641<br>|97629<br>|0.984<br>|0.685<br>|
|1989.2|3305700|3397107|0.973|3232600<br>|86700<br>|3272152<br>|124954<br>|0.988<br>|0.694<br>|
|1989.3|3323900|3427339|0.970|3253300|75900<br>|3300353<br>|126986<br>|0.986<br>|0.598<br>|
|1989.4|3 27900|3549033|0.966<br>|3328700<br>|108100<br>|3370003<br>|179030<br>|0.988<br>|0.604<br>|
|1990.1<br>|3343900<br>|3441818<br>|0.972<br>|3276300<br>|87500<br>|3318533<br>|123285<br>|0.987<br>|0.710<br>|
|1990.2<br>|3441700<br>|3554334<br>|0.968<br>|3343100<br>|99700<br>|3399438<br>|154897<br>|0.983<br>|0.644<br>|
|1990.3|3535500|3622916|0.976|3413400|115800|3448450|174466|0.990|0.664|
|<br>1990.4|<br>3663400|<br>3792816|0.966|3512000|138700|3552587|240229|0.989|0577|
**Policy Research Working Paper Series**

||**Title**|**Author**|**Date**|**Contact**<br>**for paper**|
|---|---|---|---|---|
|WPS 842|Capital Flows to South Asia and<br>ASEAN Countries: Trends,<br>Determinants, and Policy Implication|Ishrat Husain<br>Kwang W. Jun<br>s|January 1992|S. King-Watson<br>31047|
|WPS843|How Financial Markets Affect Long-<br>Run Growth: A Cross-Country Study|Ejaz Ghani<br>|January 1992|A. Nokhostin<br>34150|
|WPS844|Heterogeneity, Distribution, and<br>Cooperation in Common Properly<br>Resource Management|Ravi Kanbur|January i992|WDR Office<br>31393|
|WPS845|Inflation Stabilization in Turkey:<br>An Application of the RMSM-X Model|Luc Everaert<br>|January 1992|B. Mondestin<br>36071|
|WPS846|Incorporating Cost and Cost-<br>Effectiveness Analysis into the<br>Development of Safe Motherhood<br>Programs|Larry Forgy<br>Diana M. Measham<br>Anne G. Tinker|January 1992|0 Nadora<br>31091|
|WPS847|Coping with the Legacies of<br>Subsidized Mortgage Credit in<br>Hungary|Silvia B. Sagari<br>Loic Chiquier|January 1992|M. Guirbt<br>35015|
|WPS848|How EC 1992 and Reforms of the<br>Common Aaricultural Policy Would<br>Affect Developing Countries' Grain Tr|Merlinda D. Ingco<br>Donald 0. Mitchell<br>ade|February 1992|P. Kokila<br>33716|
|WPS849|Financial Structures and Economic<br>Development|Ross Levine|February 1992|W. Pitayatonakarn<br>37666|
|WPS850|Fiscal Adjustment and the Real<br>Exchange Rate: The Case of Bangla|Kazi M Matin<br>desh|February 1992|D. Ballantyne<br>38004|
|WPS851|Sources of World Bank Estimates<br>of Current Mortality Rates|Eduard Bos<br>My T Vu<br>Patience W. Stephens|February 1992|0. Nadora<br>31091|
|WPS852|How Health Insurance Affects the<br>Delivery of Health Care in Developing<br>Countries|Joseph Kutzin<br>Howard Barnum|February 1992|0. Nadora<br>31091|
|WPS853|Policy Uncertainty, Information<br>Asymmetries, and Financial<br>Intermediation|Gerard Capnio|February 1992|W. Pitayatonakatn<br>37664|
|WPS854|Is There a Case for an Optimal Export<br>Tax on Perennial Crops?|Takamasa Akiyama|February 1992|G. llogon<br>33732|
|WPS855|Sovereign Debt: A Primer|Jonathan Eaton|February 1992|S. King-Watson<br>31047|
# **Policy Research Working Paper Series**

||**Title**|**Author**|**Date**|**Contact**<br>**for paper**|
|---|---|---|---|---|
|WPS856|Latin American Women's Earnings<br>and Participation in the Labor Force|George Psacharopoulos<br>Zafiris Tzannatos|February 1992|L. Longo<br>39244|
|WPS857|The Life Insurance Industry in the<br>United States: An Analysis of Econo<br>and Regulatory Issues|Kenneth M. Wright<br>mic|February 1992|W. Pitayatonakarn<br>37664|
|WPS858|Contractual Savings and Emerging<br>Securities Markets|Dimitri Vittas|February 1992|W. Pitayatonakarn<br>37664|
|WPS859|Macroeconomic Management and<br>the Black Market for Foreign Exchan<br>in Sudan|Ibrahim A. Elbadawi<br>ge|February 1992|V. Barthelmes<br>39175|
|WPS860|The Restrictiveness of the Multi-<br>Fibre Arrangement on Eastern<br>European Trade|Refik Erzan<br>Christopher Holmes|February 1992|G. llogon<br>33732|
|WPS861|Private Saving in Mexico, 1980-90|Patricio Arrau<br>Daniel Oks|February 1992|S. King-Watson<br>31047|
|WPS862|Higher Education in Egypt|Alan Richards|||