Work Undertaken by the IMF Statistics Department and the Committee in 2019
- Carlos Sanchez-Munoz, Paul Austin, Alicia Hierro, and Tamara Razin
- Published Date:
- February 2020
A. Strategic Direction of the Next Review of International Standards
8. The Committee agreed on a strategy for updating the ESS manual in coordination with national accounts (NA), by scoping out the key conceptual, methodological, and measurement issues pivotal to the IMF’s role in providing cutting-edge analysis and policy advice for its membership. The position paper discussed at the 2019 meeting describes the overarching framework around which the Committee’s research agenda will be structured linking it to the main policy priorities in a fast-changing global economic and financial environment. The Committee and the Inter-secretariat Working Group on National Accounts will establish a coordination mechanism for dealing with cross-cutting topics.
9. The main priorities identified in the position paper are globalization, digitalization, drivers from the evolution of financial and payments systems, and other issues in the research agendas of the national and international accounts. The strategy identifies areas of work in progress, including those of other IOs; and underscores that the aspiration of a one-statistical-standard-fits-all approach needs to be weighed against manifold (and sometimes competing) needs, especially concerning a varied statistical capacity across the IMF membership.
B. Globalization, Digitalization, and Financial Interconnectedness: Challenges for ESS
10. The Committee discussed ways of advancing the work in measuring the effects of globalization. With the increasing fragmentation of production across borders, more detailed data are needed to understand global value chains (GVCs). The Committee endorsed the development by the IMF and the OECD of a reporting template for GVCs data collection identifying two reporting levels with (i) core or minimum set of items for countries with low statistical capacity and (ii) extensions accomplishable for more statistically developed economies. For multinational enterprises, a framework should provide supplementary data that highlight their role in the current account.
11. The Committee endorsed a collection plan for data on special purpose entities (SPEs) and the need for the IMF to develop guidelines for compilers. In a complex global financial system, SPEs play an important role. In 2016, the Committee had mandated a Task Force on SPEs (TFSPEs) to develop a strategy to address existing data gaps. The work of the TFSPE resulted in an internationally-agreed definition of SPEs plus a typology of SPEs and plans to establish a data collection framework to identify separately SPE external transactions and positions. The implementation plan endorsed by the Committee at its 2019 meeting targets the release of annual data around end-2021 for reference year 2020. STA will develop operational guidelines to assist national compilers implement the SPE data collection.
12. The Committee endorsed the creation of a task force (TF) on intellectual property products (IPPs). The rising importance of IPPs in production processes, large transactions associated with the reallocation of IPPs within multinational groups, rapid development of high-end technological production and digital trade, and new forms of IPPs result in growing IPP transactions. Compilers face challenges in covering these data due to their complexity and intangible nature. The TF will develop guidance for IPPs compilation in coordination with NA, building on work done by the OECD and Eurostat.
13. The need for digital trade definitions and compilation guidance will be addressed with the launch of the OECD/WTO/IMF Handbook on Measuring Digital Trade (The Handbook). Digitalization is changing the way firms produce and market goods and services across borders, and its measurement is of critical importance. The Handbook sets out the conceptual framework and provides the definition of digital trade, and compilation guidance on digital trade measurement. For addressing data gaps, the Committee sought the IMF’s help for countries to gain access to e-commerce data from large digital platforms.
14. The work of the Task Force on Informal Economy (TFIE) established by the Committee in 2017 culminated with its final report and the launch of the informal economy (IE) Webpage. The coverage of the IE in ESS continues to be a challenge, particularly for low-income economies. The TFIE was established for addressing data gaps in covering informal, underground, and illegal activities in the international accounts; its work was centered on identifying “encouraged practices” in IE data compilation, building on the conceptual frameworks defined by different IOs. The webpage disseminates available information on the economies’ compilation practices enabling peer learning; and will be routinely updated to take account of practices shared by IMF member countries.
15. Reducing global and bilateral data asymmetries remains challenging. Asymmetries in the global balance of payments accounts signal a lack of statistical capacity in some countries to adequately measure the cross-border transactions, and have the potential to misguide policy making. The Committee agreed that further research is needed to tackle known and emerging triggers for these asymmetries and supported a more bilaterally focused approach for addressing statistical discrepancies. Some Committee members (in particular US, Germany, and the Netherlands) volunteered to study their bilateral asymmetries and report their results at the 2020 Committee meeting.
16. The Committee continued efforts to enhance the data needed to support analysis of financial interconnectedness. With the support of the Committee, STA undertook a proof of concept (PoC) of a potential centralized database hosted by the IMF enabling the exchange of information on main securities’ issuers and their institutional sector. The database would significantly contribute to disaggregating coordinated portfolio investment survey (CPIS) data by country and sector of securities’ issuers and holders (i.e., who finances whom). Based on the PoC’s successful outcome, STA invited CPIS reporting economies to participate in the centralized exchange of information and will take a final decision on whether to build up the database based on a critical mass of positive responses and a reasonable coverage of total CPIS assets.
17. In 2019, the Committee conducted a study on the feasibility of improving data availability on stock/flow reconciliation and IIP currency composition in the context of the IMF’s External Sector Report (ESR) to support external vulnerabilities analysis. The IMF’s initiative to compile and disseminate currency composition data was introduced in BPM6 and strongly recommended by the second phase of the G20 Data Gaps Initiative (DGI 2); however, its compilation remains challenging for many countries.7 Based on the study, a gradual approach is proposed allowing partial data reporting as well as lower-exigence requirements, particularly for countries with low statistical capacity. STA asked the Committee members representing External Balance Assessment (EBA)/ESR countries to report the requested data for the next collection round, launched in December 2019.8
C. Implementing the 2019 Research Agenda
18. The Committee’s work on the research agenda contributes to maintaining the relevance of ESS for new economic and financial developments until the revision of statistical manuals is launched. The list is not closed and STA will continue gathering research topics that require either clarification or more structural changes to the BPM6—including supplementary frameworks where feasible.
19. Several clarification notes on emerging methodological issues were prepared and posted on the BPM6 and Committee’s websites in recent years. As an outcome of 2019 Committee meeting discussions, clarification notes will be posted on the treatment of participations in the capital of IOs and respective income; negative equity in direct investment statistics; and recording of letters of credit in ESS. The proposed 2020 research agenda includes topics to be addressed before/for the 2020 Committee meeting such as the treatment of centralized currency unions in macroeconomic statistics; recording IPPs in ESS; and compiling statistics on greenfield investment and sustainable finance to better inform financial stability analysis, including potential risks from climate change.