Working Group on Harmonization between Balance of Payments and National Accounts

Working Group in the ECLAC region on the Harmonization between Balance of Payments and National Accounts Statistics Eleventh Meeting of the Advisory Expert Group on National Accounts New York, 5-7 December 2017 Lourdes Erro* lerro@bcu.gub.uy Manager of Economic Statistics Area Central Bank of Uruguay * Opinions expressed here are those of the author and do not commit the Central Bank of Uruguay

Presentation Outline 1. Motivation 2. Working Group on the Harmonization of SNA and BOP 3. Activities carried out so far and planned activities 4. Survey: main results 5. Questions to the AEG

1. Motivation The underlying methodology and concepts for the national accounts (2008 SNA) and the balance of payments (BPM6) are consistent with each another. But: large differences remain in practice The Annual National Accounts Seminar for Latin America and the Caribbean, organized by ECLAC, 8-10 November 2016, Santiago, Chile, discussed the importance of the harmonization in practice. An initial evaluation of BoP and NA data showed that there are considerable inconsistencies in the region Countries expressed interest in further working to better understand the reasons for the inconsistencies and to improve these statistics

1. Motivation Discrepancies between BoP and NA Exports and Imports examples in Latin America (NA-BoP)/NA (%) Exports MERCOSUR without VENEZUELA ANDEAN COMMUNITY plus CHILE CENTRAL AMERICA MEXICO 2010 -0,9% -1,6% -0,3% 0,1% 2011 -1,1% -1,3% 0,2% -0,1% 2012 -1,2% -0,6% 0,7% 0,1% 2013 -1,5% -0,8% 3,7% -0,6% 2014 -2,0% 1,4% 2,9% -0,1% 2015 -2,2% 0,9% 5,0% -0,1% 2016 -1,5% -1,4% 1,6% -0,1% Imports MERCOSUR without VENEZUELA ANDEAN COMMUNITY plus CHILE CENTRAL AMERICA MEXICO 2010 4,6% 2,4% 2,5% -0,6% 2011 4,3% 2,2% 0,7% -0,5% 2012 4,2% 2,6% 1,3% -0,5% 2013 4,3% 2,9% -1,2% -0,4% 2014 3,9% 2,6% -1,2% -0,4% 2015 3,0% 1,8% -0,8% -0,3% 2016 4,8% 2,4% -0,5% -0,6% Note: prepared and presented during the Workshopon the harmonizationof BoP and SNA, Brazilia, June 2017

2. Working Group on the Harmonization BoP and NA MAIN OBJECTIVE: Address practical aspects of the adoption of SNA 2008 and BPM6 and arrive to practical recommendations for the harmonization of the BoP and SNA data. Specific objectives: Make a diagnosis based on a survey in the region Detect causes of non harmonization, specially in selected areas Propose ways to improve current practices Produce a document as a practical guidance for harmonization of the BoP and SNA data (Terms of Reference in Annex 1)

2. Working Group on the Harmonization BoP and NA Participants and accountability Colaboration from other Organisms Brasil (BP/NA) Colombia (BP/NA) Costa Rica (BP/NA) Annual Seminar on National Accounts (ECLAC) BoP-SNA_WG Nicaragua (BP/NA) Uruguay (BP/NA) COORDINATION AEG Technical Secretary: ECLAC Venezuela (BP/NA)

2. Working Group on the Harmonization BoP and NA PLAN OF ACTIVITIES Jun Dic 2017 Dic 2018 WORK IN 4 SUBGROUPS Workshop (training and organization) 1st. Report 2nd. Report Practical Guide of Harmonization (draft) Survey and Diagnosis (Plan of Activities in Annex 2)

3. Activities carried out so far and planned activities WORKSHOP on the Harmonization of BoP and SNA data (27-29 June 2017, Brazilia, Brazil) organized by ECLAC and UNSD with the participation of Eurostat and IMF Countries were trained on the integration of BoP and SNA Direction for further work was provided: Definition of the content of a Survey for diagnosis Setting up of 4 subgroups to work in 4 selected areas: General topics Goods and Services FISIM FDI A collaborative work platform was created by ECLAC: https://connections.unite.un.org/communities/service/html/communitystar t?communityUuid=3174e038-17ea-4d35-91b1-0bdd4e1c807d

3. Activities carried out so far and planned activities Work structure for special areas General topics of harmonization Methodological reference: flows in SNA and BoP to be consistent changes introduced in both manuals (i) define the problem (ii) summarize the theoretical treatment according to reference frameworks Statistical Base: business registers scope of statistical units statistical sources classifications and data treatment (iii) describe required adjustments of the basic statistics, scope and coverage, and reconciling processes to be carried out; Publication characteristics: publication formats timetables revision policy (iv) present practical examples of good country practices Mechanisms supporting harmonization: institutional framework strategic planning.

3. Activities carried out so far THE SURVEY Institutional responsibility CB (BoP & NA) CB (BoP) and NSO (NA) Total answers Without answer Total Number of countries 11 3 14 5 19 1) Manuals used as reference Manual used as reference BPM5 & 1993 SNA BPM5 & 2008 SNA BPM6 & 1993 SNA BPM6 & 2008 SNA Number of countries 1 2 5 6

3. Activities carried out so far THE SURVEY 2) Publication characteristics Lag with respect to estimated period (first release of annual data) 90 days 180 days Number of countries Frequency quarterly 14 13 3 annual 0 1 11 BP IIP RoW BP IIP RoW 14 13 3 0 0 11 preannounced calendars: 12 comprehensive revisions warned in advance to users: 10 discrepancies between BP and RoW explained to users: 2

3. Activities carried out so far THE SURVEY 3) Statistical sources and treatment of data (examples) Goods (BoP) Goods (RoW-NA) 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Registries Surveys Fin.Stat. SUT adjust Registries Surveys Fin.Stat. SUT adjust BoP data

3. Activities carried out so far THE SURVEY Services (BoP) Services (RoW-NA) 60% 80% 70% 50% 60% 40% 50% 30% 40% 30% 20% 20% 10% 10% 0% 0% Registries Surveys Fin.Stat. SUT adjust Registries Surveys Fin.Stat. SUT adjust BoP data 8 countries make adjustments for smuggling activities and non observed economy in RoW estimations only 3 countries take those figures in BoP statistics 8 countries carry out data conciliation in the framework of SUT in RoW estimations only 2 countries include these amendments in BoP statistics

3. Activities carried out so far THE SURVEY 4) Main sources of discrepancies: Statistical sources; 6,9% Revision cycles; 3,8% Other; 9,4% Methods of estimations; 38,8% Coverage; 10,0% Interpretations of manuals; 10,6% Vintages of manuals; 20,6%

4. Questions to the AEG Does the AEG agree that a preparation of a practical Guide on the Harmonization of BoP and SNA data would be useful? Does the AEG suggest additional considerations to be taken into account?