Jordan: Report on the Observance of Standards and Codes (ROSC)—Data Module Response by the Authorities

This Report on the Observance of Standards and Codes (ROSC) provides a review of Jordan’s data dissemination practices against the IMF’s General Data Dissemination System (GDDS), complemented by an in-depth assessment of quality of national accounts, consumer and producer price indices, and government finance, monetary, and balance-of-payments statistics. The assessment reveals that Jordan participates in the GDDS and meets the recommendations for the coverage, periodicity, and timeliness of most data categories. Jordan’s macroeconomic statistics also broadly meet the periodicity requirements of the SDDS.

Abstract

This Report on the Observance of Standards and Codes (ROSC) provides a review of Jordan’s data dissemination practices against the IMF’s General Data Dissemination System (GDDS), complemented by an in-depth assessment of quality of national accounts, consumer and producer price indices, and government finance, monetary, and balance-of-payments statistics. The assessment reveals that Jordan participates in the GDDS and meets the recommendations for the coverage, periodicity, and timeliness of most data categories. Jordan’s macroeconomic statistics also broadly meet the periodicity requirements of the SDDS.

Overview

The authorities (the Department of Statistics, the Ministry of Finance, and the Central Bank of Jordan) express appreciation for the IMF’s data module ROSC report on Jordan. The authorities welcome in particular the thorough analysis and balanced recommendations of the report in order to improve Jordan’s statistical database and achieve the country’s goal in meeting the requirements of the Special Data Dissemination Standard in due course.

Response to Recommendations

A. National Accounts

The Department of Statistics (DOS) thanks the IMF staff responsible for the assessment of the statistics produced by DOS and welcomes all recommendations mentioned in the report. In this regard, DOS provides the following comments:

(1) DOS is committed to produce good, reliable, and accurate national accounts. The Department is trying to recruit qualified staff in the National Accounts Division to improve the GDP estimates by the expenditure approach and supply and use tables, which can help in identifying discrepancies between the estimates of GDP using the three approaches.

(2) DOS is aware of the important role of publishing the detailed metadata on sources and methods to enhance the accessibility of national account data. It is expected that DOS will release reports on annual and quarterly national accounts within two months. The reports will include, beside the estimates, detailed information on the compilation methodologies and definitions for the variables and classifications used.

(3) It is planned in the short term to publish the national accounts statistics in a more detailed manner.

(4) The results of the household Income and expenditure survey initiated in 2002 will be used to improve the GDP estimates by expenditure approach by estimating the household final consumption using data from the survey instead of determining it as a residual.

(5) DOS is planning to conduct a workshop in December 2002 on the link between national accounts and business accounting where technical papers will be presented. The outcome of the workshop will help in designing new questionnaires for all of the economic surveys, which would facilitate data collection for compiling the financial accounts and balance sheets.

(6) Providing users with volume measures of the expenditure components of GDP is one of the concerns. DOS is working on compiling price indices for exports and imports, which are considered to be an essential element in compiling GDP estimates by the expenditure approach at constant prices. DOS will start compiling volume measures for expenditure components of GDP, as it finishes with compiling the external trade indices. This will be a prerequisite for meeting the ISWGNA minimum requirements.

(7) DOS is planning to compile wage indices, which will be used in compiling the expenditure components of GDP (Government expenditure).

B. Consumer and Producer Price Indices

The results of the household income and expenditure survey are expected to be available for use in the mid–2003. The results of this survey will be used in 2004 to re–weigh the CPI in line with 1993 SNA, which will also include the owner occupied dwelling services. In this regard, DOS has to ask for technical assistants from experts in this field.

Increasing the coverage of the PPI to include agriculture, construction, and other major economic activities implies that DOS will have to commit itself to compile the extended PPI on a monthly basis for the subsequent years. Performing this task requires the availability of additional resources for the subsequent years. The extension of the PPI will start as soon as additional resources become available and there is a guarantee to get those resources in the subsequent years.

The National Accounts Division is considered the major user for the PPI; the available PPI meets part of the Division’s needs. For other PPI users, DOS is asking for feedback on any of its products. The demand for PPI of construction is increasing and thus it will take the priority when DOS decides to perform this task.

C. Government Finance Statistics

The Ministry of Finance (MOF) is committed to good quality statistics. It thanks the IMF staff for its assessment and recommendations of Jordan’s government finance statistics (GFS) and provides the following comments:

(1) In order to achieve the levels of the Special Data Dissemination Standards and General Data Dissemination Standards, the MOF needs to prepare the following special pre–requisites:

  • The expansion of the dissemination of GFS for statistical data required for MOF’s bulletin, covering the extra budgetary 17 autonomous agencies on an annual basis. Meanwhile, cooperation continues between the Central Bank of Jordan and the Social Security Corporation, in addition to cooperation between the DOS and local governments (100 municipalities).

  • A division to be established at the MOF with the primary responsibility of compiling comprehensive GFS and acting as a focal point for the public feedback and queries.

  • A telecom network linking directly the above mentioned public enterprises to the MOF for flexible and faster flow of the data required for the bulletin.

  • Computer hardware and software with special statistical systems.

  • Training among MOF staff, promoting professionalism for compiling statistical data.

For the above mentioned prerequisites, the MOF would highly appreciate receiving IMF technical assistance in training, equipment, and expertise.

(2) There is a possibility of separating the government guaranteed debt from the outstanding public debt in order to be in line with international standards.

(3) Several pages could be added to the bulletin regarding time series of detailed revenues and expenditures for the past 12 months. It is also possible to publish a manual concerning the detailed technical descriptions of concepts, sources, and methodology sufficient to allow experts to assess GFS.

(4) The inconsistency in the external financing (including loans and grants) published in the bulletin of the MOF, Central Bank of Jordan, and Department of Statistics, could be minimized and reconciled by using regular consistency checks among GFS, monetary, balance of payments, and national accounts data.

(5) The classification requested by the IMF regarding “Expenditure by Function” and “Debt by Instrument” could be implemented by using the Oracle computer system, which the MOF is in the process of installing.

(6) The MOF publishes GFS data on a cash basis, except for the data regarding the rescheduled interest, which are published on a commitment basis upon the request of the IMF.

(7) Our classifications regarding tax and non-tax revenues are not in line with the IMF classifications, because these categories of data were mandated in the budget law and other relevant laws.

D. Monetary Statistics

The Central Bank of Jordan (CBJ) will improve, in due course, the quantity and quality of its monetary data in accordance with the guidelines of the Monetary and Financial Statistics Manual (MFSM) for the year 2000. In this regard, the CBJ is planning to undertake the following procedures:

(1) Cooperating with the DOS in categorizing private sector data into “households,” “other non–financial corporations” and “nonprofit institutions serving households.” This is necessary to ensure that CBJ classification is the same as the one used by DOS in compiling SNA statistics. Furthermore, this step involves redesigning bank returns by CBJ and adjusting software programs used by licensed banks.

(2) Coordinating with the Ministry of Finance to set up a regular mechanism, which allows, to a great extent, consistency between government finance statistics and monetary and financial statistics.

(3) Consulting with licensed banks regarding the impact of reclassifying financial derivatives as an item in the balance sheet instead of the recent classification as an off–balance–sheet item. The CBJ intends to include financial derivatives in the monetary survey.

(4) For the purpose of improving quality awareness of monetary statistics, the CBJ will conduct surveys for users to identify their emerging data requirements. Moreover, a contact person will be identified both in the CBJ publications and on its website.

E. Balance of Payments Statistics

The CBJ recognizes the need to substantially improve Jordan’s balance of payments statistics (BOP), including the eventual publication of the international reserve template and the international investment position. We would like to request technical assistance in the form of a long–term balance of payments advisor who can help the staff of the CBJ as follows:

(1) To implement the fifth edition of the Balance of Payments Manual (BPM5);

(2) To coordinate with DOS in setting up surveys for a better coverage of services; and

(3) To prepare the groundwork for publishing, in due course, the international reserve template and the international investment position.

In order to make the work of the advisor effective, the CBJ will coordinate with DOS to make sure that the combined effort of our BOP section and DOS staff will be adequate to carry out the required tasks.