A. National Accounts

The ROSC mission notes that, in the national accounts, the 1993 SNA residence criterion is not applied to local branches of foreign firms. The mission recommends the harmonization of resident institutional units between national accounts, monetary, and BOP statistics in accordance with 1993 SNA and BPM5.

The SARK is of the view that in the national accounts, the coverage of resident units is incomplete because in the balance of payments local branches of foreign companies are considered nonresidents.

Investigate the discrepancy with the BOP data, and implement procedures to reconcile the data sets on an ongoing basis.

The SARK and the NBK has started work in reconciling the national accounts and balance of payments data. The discrepancies between the two data sets, which are mainly due to the different revision schedules, will be explained in the methodological notes of the SARK and the NBK publications.

Make historical data series consistent for changes in the methodology.

The SARK has started work on reconstructing annual historical data for changes in the classification. It is planned that the national account series would be reconstructed as from 1994, and consistent annual data series will be disseminated by the end of 2004.

Implement measures to assess and adjust the national accounts source data and improve the completeness and accuracy of the business register.

We are not in complete agreement with mission’s assessment that the coverage of the register is not considered exhaustive. Nevertheless, the SARK has taken measures to further improve the completeness and the accuracy of the business register by improving coordination with the judicial and tax bodies.

Strengthen the statistical techniques used in the compilation of national accounts volume estimates.

Work is continuing on the improvement of the deflation techniques used in the compilation of calculations in constant prices on the basis of the production approach and the expenditure approaches.

Make use of the supply and use tables to reconcile the GDP estimates by production and expenditure approach.

The SARK is in the process of finalizing the supply and use tables for 2000. The supply and use framework will be used to reconcile the GDP estimates compiled by the production and the expenditure approach.

B. Consumer Price Index (CPI)

Include imputed rents of owner-occupied housing in the CPI.

The SARK recognizes that as the weight of housing cost is low in Kazakhstan due to cooperative housing facilities provided by the government, an attempt needs to be made to impute the cost of owner-occupied housing in the CPI in order to reflect the true cost of such ownership. The SARK will attempt to impute such costs in the CPI consistent with the recommendations of past Fund technical assistance missions in that the weight for owner-occupied housing will be derived from housing funds data (adjusted for possible underreporting) or from national accounts estimates. The SARK expects that the CPI will include a weight for imputed housing by the end of 2003.

C. Government Finance Statistics

In accordance with Decree of the President of the Republic of Kazakhstan No. 931 dated August 28, 2002 entitled “On Measures Aimed at Further Improvement of the Public Administration System of the Republic of Kazakhstan,” the public administration system has undergone certain changes.

Thus, the reorganization of the Ministry of Finance of the Republic of Kazakhstan involved its division into the Republic’s Ministry of Finance and the State Purchases Agency of the Republic of Kazakhstan, with transfer of budget planning functions and powers to the Ministry of the Economy and Budget Planning of the Republic of Kazakhstan as well as incorporation of functions of the reorganized Ministry of State Revenue of the Republic of Kazakhstan in the competency of the Ministry of Finance.

Functions involving the compilation and dissemination of data for government finance statistics remained with the Ministry of Finance. The State Budget Execution Organization Department is charged with maintaining statistics on data for state budget execution, and the State Debt and Credits Department is charged with maintaining statistics on data for government debt and state-guaranteed debt of the Republic of Kazakhstan.

The Ministry of Finance of the Republic of Kazakhstan provides the Ministry of the Economy and Budget Planning of the Republic of Kazakhstan with data on state budget execution so that it can perform the functions with which it is charged.

In association with the aforementioned changes, information on state purchases of goods, work, and services by government institutions that are administrators of programs using resources of the republican and local budgets will not be published in the Statistical Bulletin of the Ministry of Finance of the Republic of Kazakhstan. According to a letter from the State Purchases Agency of the Republic of Kazakhstan, it will be publishing that information independently.

With regard to the recommendations of the ROSC mission:

Disseminate data on consolidated general government that include all extrabudgetary funds and grants.

In order to expand the institutional scope of fiscal statistics, the National Bank of the Republic of Kazakhstan together with the Ministry of Finance of the Republic of Kazakhstan is creating a working group that will define a methodology for maintaining accounting records on NFRK operations with the aim of ensuring timely reflection of operations effected by the National Bank of the Republic of Kazakhstan for the NFRK at the Ministry of Finance of the Republic of Kazakhstan.

Disseminate financing data on central (Republican) government operations with foreign and domestic components within one month of the reference period.

Currently monthly data on state budget execution is posted at the end of the month following the reference month on the website of the Ministry of Finance on the Internet, and is also published in the Statistical Bulletin of the Ministry of Finance. Reflection of republican budget execution incorporates data on internal and external financing.

Improve the classification of financing items in accordance with the GFSM 1986, especially with respect to the classification of securities by type of holder.

In accordance with the Law of the Republic of Kazakhstan “On State and State-Guaranteed Borrowing and Debt,” external state debt is a component of state debt for external state loans and other debt obligations of the government, local executive authorities, and the National Bank of the Republic of Kazakhstan owed to nonresident creditors of the Republic of Kazakhstan, while internal state debt is a component of state debt for internal state loans and other debt obligations of the government of the Republic of Kazakhstan, local executive authorities, and the National Bank of the Republic of Kazakhstan owed to resident creditors of the Republic of Kazakhstan (Article 1 of the Law).

State loans are divided into internal and external depending on the loan capital market on which the borrowing takes place (Article 7 of the Law); in other words, debt obligations are classified depending on the type of loan capital market.

The latest issues of the Statistical Bulletin of the Ministry of Finance of the Republic of Kazakhstan contain additional remarks explaining the grounds for recording data on financing and debt obligations of the government of the Republic of Kazakhstan. The very next issue of the Statistical Bulletin of the Ministry of Finance of the Republic of Kazakhstan will contain a notice that information on the status of state debt of the Republic of Kazakhstan is published in the Statistical Bulletin of the National Bank of the Republic of Kazakhstan. In this context, it should be mentioned that the debt of the local executive bodies of the Republic of Kazakhstan will be published after the settlement of all debt obligations of the local executive bodies with the Ministry of Finance of the Republic of Kazakhstan.

Investigate data inconsistencies between GFS and BOP and monetary statistics in coordination with NBK’s BOP and statistics divisions, and implement procedures to reconcile data on an ongoing basis.

Staff of the NBK and the Ministry of Finance are investigating data inconsistencies between GFS and BOP and monetary statistics with the aim of improving accounting and methodology.

Publish data revisions policy.

In accordance with Law of the Republic of Kazakhstan entitled “On the Budget System,” revision of data on republican budget execution occurs after the completion of the accounting period, during which final transactions are effected for approved budget expenditures on investment projects not provided with financing in the fiscal year just ended, and on official transfers credited to budgets, which is reported in a timely manner in the Statistical Bulletin of the Ministry of Finance.

D. Monetary Statistics

Harmonize revisions practice with BOP/IIP and provide information on breaks in data series to the public.

The NBK recognizes the need for closer coordination in this area between monetary and balance of payments statistics, and the need to carefully document breaks in data series for the users of these statistics. The NBK plans to conduct a review of current practices as part of a wider review into discrepancies among Kazakhstan’s macroeconomic statistics (see below).

Investigate data inconsistencies with IIP and GFS in coordination with NBK BOP division and the MOF, and implement procedures to reconcile data on an ongoing basis. Coordinate with the SARK on work on the classification of international units of residents in banking statistics.

A coordinated effort with the other statistical agencies will be undertaken to identify the nature of existing data discrepancies and to examine possible procedures for reconciling data on an ongoing basis. The NBK will examine the possibility of distinguishing branch offices of nonresident companies for classification of institutional units in full correspondence with national accounts and balance of payments statistics.

Release data simultaneously to users according to a preannounce schedule.

Improvements planned for the NBK website will enable simultaneous private sector and government access to the monetary statistics.

Disaggregate data shown in the monetary survey. Require commercial banks to translate foreign currency denominated accounts into tenge equivalents using market exchange rates.

Information on the currency denomination of transferable and other deposits recorded in the monetary survey has been included in the NBK’s Statistical Bulletin to enable reconciliation with M1 and M2 money measures, and deposits of regional and local governments are now included in the definition of money. The NBK will investigate further the possibility of including additional disaggregated data on the NBK website. Both the NBK and commercial banks now value their foreign currency denominated assets and liabilities on a daily basis using the average weighted market exchange rate.

Timeliness of the analytical accounts of the central bank and the banking system with breakdown of data on public and private sectors, as well as data on the external position.

Improvements in the NBK’s website will facilitate release of these data in accordance with the requirements of the SDDS.

More detailed metadata on the definition and scope of line items in the monetary accounts could be developed and made available to the public.

Following design improvements, the NBK website will provide hyperlinks to the GDDS metadata published by the Statistics Agency of the Republic of Kazakhstan, and additional metadata will be developed for monetary statistics indicators. At the level of national publications of monetary statistics, NBK liabilities to the NFRK will be provided as a separate general article without breakdown by instruments. Data on the structure of NFRK assets will be disseminated to the public by the Ministry of Finance.

E. Balance of Payments

Begin reporting international reserves data based on the IMF’s reserves template.

The NBK is compiling the data required for completing the reserves template, and has started reporting on a trial basis to STA in January 2003. It plans to disseminate this information publicly by March 2003.

Investigate discrepancies between the BOP or IIP and national accounts, government finance statistics, and monetary accounts, respectively, and publish reconciliation tables.

Achieving reconciliation between the BOP and other accounts, and disseminating explanatory tables requires the cooperation of all the agencies involved in producing the macroeconomic accounts. The NBK has initiated discussions with the SARK and MOF to this end. Discrepancies between the BOP and monetary accounts are due, in part, to differences in frequency of publication, revision procedures, and definitions of residency. The NBK plans to regularly publish comments on causes of discrepancies between BOP and IIP data and other macroeconomic accounts and comparative tables for indicators with such discrepancies.

Release data simultaneously to users according to a preannounced schedule.

The NBK has announced a publication schedule for all data releases, and provision is being made for initial simultaneous electronic release to interested government officials, the media, and general public.

Harmonize the definition of resident institutional units between national accounts, monetary and BOP statistics in accordance with 1993 SNA and BPM5.

The NBK and SARK are coordinating a list of institutional units that present difficulties in the determination of residency. With the goal of assessing possible discrepancies between SNA and BOP data, there will be an exchange of consolidated information on those units and the results of the assessment will be included in the comments on discrepancies planned for publication.

Further develop, upgrade, and use the institutions’ websites to facilitate more timely and complete dissemination of statistics and metadata.

The NBK website is being upgraded for simultaneous electronic release of all datasets to all interested parties, to include a full list of hard copy publications with subscription instructions, metadata, and contact persons for user inquiries.

Establish a regular schedule of consultation with users.

The NBK will participate in a data users forum, open to the media and general public, at least annually.

Provide advance notice to users of major changes in methodology and data sources.

In NBK News, and on NBK’s website, major changes in methodology and data sources will be publicized in advance. Moreover, as a regular practice, when such changes are contemplated, they are discussed with representative respondents and major users.