The IMF's Statistical Systems in Context of Revision of the United Nations' A System of National Accounts
Chapter

9 Classification of International Transactions in Services, Income, and Unrequited Current Transfers

Author(s):
Vicente Galbis
Published Date:
September 1991
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Author(s)
Arie C. Bouter

During 1973–75 a small, representative group of national compilers was co-opted to assist, in the capacity of consultants, IMF staff in planning the fourth edition of the Fund's Balance of Payments Manual (BPM). This group reviewed in detail the classification of international transactions in services, income, and unrequited transfers in the third edition of the BPM and carefully weighed the merits of that and similar schemes in earlier editions of the BPM against the advantages of other schemes that could be substituted for them.1 From that review emerged the recommendations for the considerably abbreviated list of standard components set out in the fourth edition of the BPM (42 components for services, income, and unrequited transfers in the fourth edition compared with 206 components in the third edition). The recommendations were based on the suitability of the list for application by Fund member countries with different balance of payments structures, as well as disparate levels of development with respect to their statistical base. In view of those recommendations, the inability of some countries to provide separate data for even the 42 components called for in the fourth edition of the BPM, and the reductions in the budgets of some national statistical offices, the increase in the number of standard components recently requested by some users of the statistics must be carefully reviewed.

Table 1 presents a list of standard components of international transactions in services, income, and unrequited current transfers that have been suggested by IMF staff to replace those given in the fourth edition of the BPM.2 One of the suggestions is that investment income be broken down into interest and dividends, a breakdown that is indispensable for compiling debt service ratios. In addition, to enhance the analytical usefulness of the data, other investment income should be classified by domestic rather than by foreign sectors.

Table 1.Proposed Classification of Transactions in Services, Income, and Unrequited Current Transfers
Shipment, credit
Shipment, debit
Passenger services, credit
Passenger services, debit
Port services and other transportation, credit
Port services and other transportation, debit
Travel, credit
Travel, debit
Direct investment income
Reinvested earnings, credit
Reinvested earnings, debit
Distributed earnings, credit
Earnings of branches
Dividends
Interest
Distributed earnings, debit
Earnings of branches
Dividends
Interest
Other investment income, credit
Central bank
Dividends
Interest
Deposit money banks
Dividends
Interest
Other financial institutions
Dividends
Interest
General government
Dividends
Interest
Other sectors
Dividends
Interest
Other investment income, debit
Central bank
Deposit money banks
Dividends
Interest
Other financial institutions
Dividends
Interest
General government
Other sectors
Dividends
Interest
Government transactions n.i.e., credit
Compensation of employees
Nonresident households' personal expenditure
Other
Government transactions n.i.e., debit
Compensation of employees
Resident households' personal expenditure
Other
Other goods, services, and income, credit
Compensation of employees
Property income n.i.e.
Workers' personal expenditure
Banking services
Informational services
Other
Other goods, services, and income, debit
Compensation of employees
Property income n.i.e.
Workers' personal expenditure
Banking services
Informational services
Other
Unrequited current transfers, credit
General government
Other sectors
Workers' remittances
Other
Unrequited current transfers, debit
General government
Other sectors
Workers' remittances
Other
Note: “N.i.e.” indicates “not included elsewhere.”
Note: “N.i.e.” indicates “not included elsewhere.”

The Fund staff's proposal for distinguishing between factor income and other income, as well as for separately identifying unrequited current transfers, is in line with attempts to harmonize the classification of international transactions in the BPM and the United Nations' A System of National Accounts (SNA). Moreover, the breakdown of other goods, services, and income into banking services, informational services, and other services reflects the view that the growth in banking and informational services warrants the separate recording of these two categories of services.

Because the classification of international transactions in services and income in A System of National Accounts (SNA) is less detailed than that in the BPM, this paper refers only to the latter.

See the BPM, paragraphs 183-90, and the list of standard components of the balance of payments, p. 66. An alternative, more detailed classification of transactions in services and income was proposed by the Statistical Office of the European Communities (EUROSTAT) in “Classification of Exchanges in Invisibles (CEI),” Working Document for the Meeting of the Balance of Payments Working Party, BP 86-16, October 30–31 (Luxembourg, 1986).

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