Conceptual linkages between the different parts of macroeconomic statistics

1. Agenda item 4a Conceptual linkages between the different parts of macroeconomic statistics Kurt Wass EFTA Statistical Office 7th SPECA Project Working Group on Statistics 27 – 30 August 2012, Issyk-Kul, Kyrgyzstan

2. Conceptual linkages between the different parts of macroeconomic statistics • The system of macroeconomic statistics is developed in different parts that are tailored to meet different needs in the macroeconomic policies concerning issues like; • Balance of payment surplus or deficit • Economic growth and activity level • Income and distribution • Fiscal position • Money and credit measures • However, the various parts of the system of macroeconomic statistics are to a large extent harmonized, and are based on the same basic concepts to provide decision makers information that is as far as possible mutually consistent. 2

3. Conceptual linkages between the different parts of macroeconomic statistics Four main parts of the system: • System of National Accounts, SNA 2008 (ESA 1995/2010) • all economic activity in economy, including production, consumption, capital formation, income distribution, etc. • Balance of Payments and International Investment Position, (BPM6 2009) • interactions with rest of the world • Government Finance Statistics, GFSM 2001 (2012) • economic activity and impact of government on economy, and sustainability of governments’ fiscal policies • Monetary and Financial Statistics, MFSM 2000 • financial system, financial assets and liabilities

4. Conceptual linkages between the different parts of macroeconomic statistics • Harmonization of macroeconomic statistics: • Residence • Domestic economy and institutional sectors • Stock and flows • Accounting rules • Valuation • Boundary conditions • Integrated accounts

5. Conceptual linkages between the different parts of macroeconomic statistics Distribution of income accounts Production account Generation of income account Primary distribution of income account Current accounts GDP Secondary distribution of income account Income accounts Redistribution of income in kind account Use of income account Saving Capital transfers & Non-financial assets Other economic flows Opening balance sheet Closing balance sheet SNA Net lending/borrowing Balance sheet Accumulation accounts Financial assets & liabilities

6. Conceptual linkages between the different parts of macroeconomic statistics Current Account Recording transactions in goods, services, income, and current transfers Current account balance Capital Account Recording transactions in capital transfers and non-produced non-financial assets BoP/IIP Net lending/borrowing IIP Statement Opening balance sheets for financial assets & liabilities Financial Account Recording trans- actions in financial assets & liabilities Other changes in assets acct. (IIP) Reconciling Changes in IIP with transactions in Financial Acct. IIP Statement Closing balance sheets for financial assets & liabilities

7. Conceptual linkages between the different parts of macroeconomic statistics Revenue Expense Opening balance sheet Closing balance sheet Net operating balance Change in net worth OEF Net Worth Net Worth Non-financial assets Non-financial assets Non-financial assets Non-financial assets GFS Change in net financial worth OEF Net financial worth Net financial worth Net lending/borrowing Financial assets Financial assets Financial assets Financial assets Liabilities Liabilities Liabilities Liabilities Stocks Stocks Transactions Other flows

8. Conceptual linkages between the different parts of macroeconomic statistics Opening balance sheet Closing balance sheet Change in net financial worth OEF Net financial worth Net financial worth Net lending/borrowing MFS Financial assets Financial assets Financial assets Financial assets Liabilities Liabilities Liabilities Liabilities Stocks Stocks Transactions Other flows

9. Conceptual linkages between the different parts of macroeconomic statistics Transactions Transactions Transactions export G&S import G&S income transactions current transfers Revenue account Production account Current account GDP (value added) Expense account Income accounts Current account balance Operating balance Saving capital transfers transactions in NPNFA Non-financial assets Capital transfers & Non-financial assets Capital account SNA ESA GFS BoP MFS Transactions Financial assets & liabilities Financial assets & liabilities Financial assets & liabilities Financial assets & liabilities Net lending / borrowing

10. Conceptual linkages between the different parts of macroeconomic statistics Similarities 2001 GFS 2008 SNA 2000 MFS 2009 BOP/IIP Structure of Accounts X X * X Sectorization (5 Institutional sectors) X X X X Time of Recording (accrual) X X X X Valuation (market prices) X X X X Double Entry Accounting X X** X X Residency (center of economic interest and economic territory) X X X X * The MFS focuses only on financial assets and liabilities ** The SNA uses quadruple entry accounting

11. Conceptual linkages between the different parts of macroeconomic statistics • The parts of the macroeconomic statistical system are to a large extent conceptually harmonized, but discrepancies are in observed in practice. • Differences due to issues related to: • data sources • coverage of units • classifications of stocks/flows • valuation • time of recording, accrual adjustments etc. • lack of cooperation between producers, often in different government agencies • Implementation of the revised manuals (SNA, BPM, GFS) should be used as an opportunity to harmonize and synchronize also in practice the major parts of macroeconomic statistics, hence providing a more mutually consistent economic picture enabling better policy decisions.