Work Undertaken by the IMF Statistics Department and the Committee in 2017
- International Monetary Fund. Statistics Dept.
- Published Date:
- February 2018
A. Globalization and Financial Interconnectedness: Challenges for ESS
8. There is continued internal and external interest in enhancing data on capital movements to support analysis of spillovers and interconnections. As part of the efforts to enhance the Coordinated Portfolio Investment Survey (CPIS), STA proposed at the 2016 Committee meeting a centralized exchange of information across economies to improve the sectorization of nonresident issuers. Such information would be key to gauge risks and vulnerabilities on a from-whom-to-whom basis with data on securities broken down by (i) economy and sector of the holder (who finances), and (ii) economy and sector of the issuer (who is financed). Following the STA proposal, two Committee members—ECB and the US Federal Reserve Board—conducted a pilot exercise to exchange data on securities and issuer sectors. The pilot proved that, for the initiative to be operationally successful, the exchange should be based on as standardized information as possible. In addition, the initiative would require removing any legal obstacles for the data exchange. Countries without individual securities’ information would be invited to provide the sector of a limited number of the national issuers accounting for the largest cross-border positions. The Committee agreed that STA will launch a survey among CPIS reporters to gauge interest in the project and evaluate the cost and benefits of such a centralized database.
9. The G-20 Data Gaps Initiative (DGI) Phase II called for an examination of the feasibility of increasing the reporting frequency of the CPIS. At its 2016 meeting, the Committee supported the proposed CPIS enhancements on frequency, timeliness, and scope. STA has been taking steps for moving to quarterly CPIS by 2019 and initiated an internal assessment of these proposals, including to identify their technical and resource requirements. STA, in consultation with the Committee, continued work on updating the second edition of the CPIS Guide and created a CPIS Guide Update webpage on the CPIS portal.
10. As part of the efforts to improve the quality of from-whom-to-whom direct investment data, the OECD and the IMF conducted a cooperation program to compare bilateral direct investment data and metadata reported to both IOs. Data are generally consistent despite different data requests. Some differences due to data vintages were identified and resolved. Whereas further harmonization in data requests by IOs would be desirable, the Committee agreed it is not a priority.
11. With respect to globalization, the Global Value Chains (GVCs) pose particularly challenges in compiling and interpreting the traditional ESS indicators. The expansion of GVCs leads to increasing trade in intermediate products, intra-group trade, foreign direct investment, as well as to new forms of trade finance. In addition, one area requiring further investigation concerns the treatment of factory-less goods production and its delineation from/relationship to merchanting and manufacturing services transactions.
12. To advance the work and overcome the challenges, the OECD will create and lead, in coordination with STA, and with the participation of interested Committee members, a Working Group to identify components in the balance of payments framework that are relevant to develop indicators on GVCs. In addition, STA will prepare a proposal on how to measure trade finance focusing on Fintech-related modalities for discussion at the next Committee meeting, and the United Nations will lead the work on the Handbook on GVCs Accounting.
13. Preliminary Report of the Task Force on Special Purpose Entities (TFSPEs). The Committee had set up the TFSPEs in 2016 to develop an IMF statistical strategy for addressing existing data gaps on special purpose entities (SPEs), and assess the data collection approach and the need to disseminate internationally-comparable statistics. During the first year of its two-year mandate, the TFSPEs conducted a fact-finding exercise among its members and prepared a preliminary report on the progress made and conclusions reached. The key preliminary recommendations are to (i) adopt a definition and a typology of SPEs consistent with other statistical domains, and (ii) separately identify SPEs cross-border transactions and positions in IMF statistics. The Committee supported the preliminary findings and recommendations of the TFSPEs, and endorsed its work program or the second year of the mandate.
14. Digital economy. There are concerns about whether digital trade is accurately and comprehensively reflected in macroeconomic statistics. Various steps towards developing a conceptual and measurement framework are currently being undertaken by various international organizations (IOs) and the “digital trade” topic is high on the G-20’s agenda. In 2017, the OECD and IMF conducted a stocktaking survey that revealed that a number of countries are already exploring a variety of pilot studies for data compilation. The Committee suggested to carefully consider the perimeter of digital trade, and, more broadly, of the digital economy, in order to avoid considering a large majority of transactions as digital, and to ensure that various policy needs are met. More work led by the OECD and the IMF was deemed necessary and both institutions will present a draft Handbook on Digital Trade at the 2018 Committee meeting.
B. Emerging Issues and Implementing the 2017 Research Agenda
15. There is an increasing need for developing an appropriate strategy for addressing existing data gaps in the coverage of the informal economy in ESS.
16. Challenges in Covering the Informal Economy in ESS. The informal economy covers a broad typology comprising informal, underground, and illegal activities. Its coverage in ESS poses numerous challenges, including the lack of a consistent measurement framework across countries and the cost of data collection. The Committee agreed to establish a task force on the informal economy centered on identifying best practices in compilation methods, building on the existing conceptual framework.
17. 2017 Research Agenda. The Committee members’ active work on the research agenda contributed to maintaining the relevance of ESS concerning new economic and financial developments. The progress in advancing the research agenda was facilitated by the new Committee’s working procedures, which enable more continuous communication by electronic means throughout the year.
18. At the 2017 meeting, the Committee discussed the statistical treatment to be applied to (i) currency swap agreements between central banks, (ii) international mobile money transfer services, (iii) letters of credit, (iv) precious metals accounts, and (v) the reserve position in the IMF.
19. The increasing importance of currency swap agreements between central banks underscored the need for uniform statistical treatment; the IMF, in coordination with the Committee, will finalize a clarification note on the statistical treatment of these instruments and post it on the BPM6 and Committee’s websites. To advance the work on developing guidance in compiling data on international mobile money transfer services, a pilot survey will be launched by three Committee members to collect data from telecommunication companies on cross–border mobile money transfers. The OECD and the IMF will consider the pilot results in the broader discussion on digital economy.
20. Discussions on the statistical treatment of letters of credit proposed by the Committee members revealed that, for preparing a methodological guidance note, further investigations are needed on how such transactions are recorded in banks’ accounting. The Committee agreed on the guidance proposed by the IMF for recording transactions and positions related to allocated and unallocated precious metals accounts, as well as on the classification of reserve position in the IMF. The next step will be to post clarification notes on the BPM6 and Committee’s websites.
21. STA will continue gathering research topics that require either clarification or more structural changes to the BPM6.6
C. Progress in Other Initiatives
22. During 2017, STA continued the work on implementing the strategy for compiling ESS in countries with low statistical capacity (CLSCs). The strategy, endorsed by the Committee at its 2016 meeting, includes a prioritization of the balance of payments and IIP components to be compiled, aimed at reducing the reporting burden, while ensuring minimum data requirements needed for surveillance and policy making. During the first six months of the fiscal year 2018, technical assistance missions in ESS were conducted in nine targeted CLSCs. Besides working on the prioritized balance of payments and IIP components, the missions focused on strengthening data sources and inter-agency cooperation as well as integrating data collection frameworks.
23. To respond to users’ requests for data to support balance sheet analysis, the BPM6 introduced enhancements to the IIP including the reporting of currency composition of financial assets and liabilities; reporting of remaining maturity of debt liabilities; and reporting of data for other financial corporations. With Committee’s support, STA approached economies that already compile currency composition data to encourage their reporting to STA. As a result, ten economies started reporting these data to STA.7
24. Following the IMF’s Executive Board decision to include the Chinese renminbi (RMB) in the basket of currencies of the Special Drawing Right, effective October 1, 2016, and the approval for the separate identification of reserves in RMB in the IMF’s survey on Currency Composition of Official Foreign Exchange Reserves (COFER), the RMB joined the currencies identified in the survey. The first COFER survey results that separately identified the RMB were released on March 31, 2017.
25. Following the 2016 Committee meeting agreement to coordinate international initiatives on bilateral asymmetries and explore synergies in direct investment data sharing, a workshop on CDIS bilateral asymmetries was organized by STA, in coordination with the Bundesbank with the participation of IOs and selected Committee members. The workshop hosted discussions on best practices and facilitated the bilateral exchange of information on direct investment data with a view to reducing bilateral asymmetries and providing valuable input into Recommendation 20 of the DGI-2 on promoting international data sharing.
26. Recent discussions on the future role of the Interagency Task Force on Finance Statistics led to the IMF proposal to the Committee to add to its mandate the methodological work related to external debt statistics. The Committee members supported the initiative and the IMF will follow the formal procedure to present this proposal to the United Nations Statistical Commission.