Abstract
This Report on the Observance of Standards and Codes (ROSC) provides a review of Georgia’s data dissemination practices against the IMF’s General Data Dissemination System (GDDS), complemented by an in-depth assessment of the quality of the national accounts, consumer price index, producer price index, government finance, monetary, and balance-of-payments statistics. Georgia has made good progress in improving its statistics in a number of areas. Nonetheless, substantial shortcomings are present in some statistical practices and databases. Some of these shortcomings could be addressed with current resources.
RESPONSE TO SECTORAL RECOMMENDATIONS
I. National Accounts Statistics
Actions Taken
The SDS has allocated additional staff, computer and financial resources for the compilation of the national accounts estimates. However, the high staff turnover and the poor motivation due to low salaries continue to be a problem. Financial resources for conducting an agricultural census in 2004 are now available. The SDS has taken measures to improve the accuracy and the reliability of the national accounts data. The accuracy of the household income and expenditure data has been improved. The statistical techniques for compiling volume measures of GDP are now more sound as the double deflation techniques were introduced. Validation procedures for assessment of source data and intermediate data have been implemented.
The SDS has established a revision schedule for its annual and quarterly national accounts data and the users are now aware of the revision policy and practice. Since August 2002, the SDS has been disseminating quarterly GDP estimates by the expenditure approach. Quarterly national accounts data by the production and expenditure approaches are now disseminated through the monthly bulletin of the SDS. Steps have also been taken to improve the presentation of published national accounts data. The preliminary, revised and final annual national accounts data are now released through the newly created SDS website. The format of the presentation is significantly improved and includes the sequence of accounts, constant price estimates, deflators of GDP, shares, charts, and tables to facilitate the analysis. National accounts metadata is also available on the newly created web page of the SDS.
Actions Planned
Prerequisites of Quality—resources
Within the framework of the medium-term budget, the SDS will propose more staff and financial resources be allocated for national accounts compilation and for conducting some basic economic statistics surveys.
Integrity—transparency
The SDS will make a statement on its website that strict and unambiguous embargo arrangements apply to preliminary, revised and final national accounts data. The web page will note that prior access to these data for a period of not more than two working days prior to the release date will be given to {name agencies outside the SDS}. Users of the data will be asked to attribute the data to the SDS when they are used or reproduced.
Methodological Soundness—scope
The SDS will develop volume measures of GDP by expenditure approach. Accuracy and Reliability—source data
The SDS will take measures to further improve the accuracy of the national accounts source data. Value added estimates will be compiled for the South Osetia and the Abkhasia regions, based on the administrative data collected by the SDS. Attention will be given to improving the exhaustiveness of the business register and undertaking of census surveys to improve the benchmarking of national accounts estimates, as well as broadening the coverage of enterprise and household surveys.
Accuracy and Reliabiliy—statistical techniques
The SDS plans to further improve the soundness of the statistical techniques used—the constant price estimates, the measurement of the non-observed economy, and the estimation of consumption of fixed capital.
Accuracy and Reliability—assessment and validation of source data
The SDS plans to continue introducing improved procedures for assessment and validation of source data—for coverage, sampling and non-sampling errors, and response rates.
Accuracy and Reliabiliy—assessment and validation of intermediate data
The SDS plans to compile more detailed supply and use tables to facilitate allocating the discrepancy of GDP between the production and expenditure approaches.
Accessibility—metadata accessibility
The SDS plans to develop a document outlining the concepts, definitions, classifications, data sources, and statistical techniques used for the compilation of the national accounts estimates.
II. Consumer Price Index
Actions Taken
The SDS has improved the data accessibility through the use of its website. Since 2003, the monthly CPI is being disseminated electronically. The SDS has disseminated summary metadata on the concepts, definitions, classifications, data sources and techniques used for the compilation of the CPI. The scope of the CPI was improved to include the owner occupied dwelling services. The weights of the CPI are now based on the COICOP classification of expenditures.
Actions Planned
Legal and institutional framework—resources
Within the framework of the medium-term budget, the SDS will propose additional computer and financial resource and investigate means of electronic data transfer between the regional offices and the central office.
Integrity—transparency
The SDS will state on its website that strict and unambiguous embargo arrangements apply to the CPI data to ensure the simultaneous release to all users outside the SDS. The web page will note that prior access to these data for a period of not more than two working days prior to the release date will be given to {name agencies outside the SDS}. The policy statement will make it clear that users of the data should attribute the data to the SDS when they are used or reproduced
Accuracy and reliability—statistical techniques
The SDS plans to review the quality change assessment techniques used for applying quality adjustments to product prices
Accessibility—metadata accessibility
The SDS plans to develop a document on concepts, sources, and methods or other descriptive material about the CPI..
III. Producer Price Index
Actions Taken
The SDS has disseminated summary metadata on the concepts, definitions, classifications, data sources and techniques used for the compilation of the PPI. The annual PPI is being disseminated electronically.
Actions Planned
Legal and institutional framework—resources
Within the framework of the medium-term budget, the SDS will propose additional computer and financial resource and investigate means of electronic data transfer between the regional offices and the central office.
Integrity—transparency
The SDS will state on its web page that strict and unambiguous embargo arrangements apply to the PPI data to ensure the simultaneous release to all users outside the SDS. The web page will note that prior access to these data for a period of not more than two working days prior to the release date will be given to {name agencies outside the SDS}. The policy statement will make it clear that users of the data should attribute the data to the SDS when they are used or reproduced.
Accuracy and reliability—statistical techniques
The SDS plans to review the quality change assessment techniques used for applying quality adjustments to product prices
Accessibility—data accessibility
The SDS will make efforts to improve data accessibility through the use of the SDS web page and to disseminate the monthly index electronically.
Accessibility—metadata accessibility
The SDS plans to develop a document on concepts, sources, and methods or other descriptive material about the PPI. Metadata will be included on the SDS web page.
IV. Government Finance Statistics
Actions Taken
As mentioned in Part I of the ROSC, the MOF is undertaking a UNDP funded project to strengthen its statistical and data compilation capabilities. This includes (i) obtaining new computer equipment and software, (ii) developing an intranet service to ensure the free flow of information, (iii) creating a central GFS database, and (iv) establishing a GFS website.
To improve the dissemination and accessibility aspects regarding GFS, the MOF recently created its own website. Specific plans for items to be included on this website are included below.
A draft law (“Georgian Budget System”) was recently passed in Parliament. This law includes the principal recommendations of the IMF to address the shortcomings in GFS, which are in their ROSC—Data Module for Georgia. More specifics are included in the sections below, as relevant.
Actions Planned
Prerequisites of Quality—legal and institutional framework
The Macroeconomic Forecasting, Tax and Custom Policy and Financial Statistics Department in the MOF will be responsible for GFS compilation. The MOF will study ways to improve the legal mandate and/or measures to ensure timely reporting of detailed data by all local governments.
Prerequisites of Quality—resources
Within the framework of the medium-term budget, the MOF will propose that additional staff and financial resources be allocated to GFS compilation. The merging of the Ministry of Revenue and Ministry of Finance may free up additional resources for GFS compilation.
No additional resources will be made available to migrate to GFS Manual 2001.
Prerequisites of Quality—quality awareness
The MOF plans to document quality control processes in the GFS compilation process, and to communicate trade-offs between quality, timeliness, and degree of detail to GFS users. While this is not a significant issue, it will be dealt with in the context of the UNDP financed project.
Integrity—professionalism
The MOF recognizes user needs for detailed GFS that fully corresponds to international standards, as indicated in the draft budget law mentioned in “actions taken” above. This is in addition to compile “GFS” according to the budget laws for budget accountability and monitoring purposes.
Integrity—transparency
The MOF plans to state on its website and in publications where GFS is published (i) the terms and conditions under which GFS are compiled, and (ii) the approval process for GFS publication. Also included will be (i) a statement that there are no restrictions on access to GFS, and (ii) a statement that there is internal government access to GFS before publication.
The MOF (in cooperation with the SDS and NBG) will identify MOF as GFS compiler in all publications of any GFS data.
Methodological soundness—concepts and definitions
The MOF plans to bring revenue, expenditure, and financing concepts and definitions to comply with international standards, specifically the definition of expenditure. These plans are included in the budget law mentioned in “actions taken” above.
The MOF plans to reclassify their existing cash data into the GFS Manual 2001 classification framework. There are no plans to move to accrual accounting in the medium term.
Methodological Soundness—scope
Starting with the 2003 fiscal year, own revenues and expenditures from these own revenue sources are included in the data.
Methodological Soundness—classification/sectorization
The MOF plans to expand the degree of detail for all GFS tables, eliminating non-standard items (especially from economic classification of expenditure), and reclassifying some current and capital expenditures, as well as amortization of foreign financing (currently classified as lending minus repayments) to their appropriate GFS categories.
These plans are included in the budget law mentioned in “actions taken” above.
Accuracy and Reliability—source data
All planned reforms included in the new budget law (mentioned in “actions taken” above) relating to the State Treasury Department—the main data source for compiling GFS—will bring the recording of revenues, expenditures, and financing data closer in line with international standards.
Specifically, the new budget law include clear guidelines for the State Treasury Department to (i) improve details of extrabudgetary funds’ data in order to allow full consolidation and analysis of data; (ii) improve level of detail and classifications of local governments source expenditure classifications to comply with international standards; and (iii) improve the availability of subsidies and other current transfers in order to compile a complete economic classification of expenditures for budgetary data.
Serviceability—relevance
The MOF plans to seek, on a formal basis, feedback from users on relevance and usefulness of GFS. This will be done through the publication of GFS on its website, where feedback from users will be solicited.
Serviceability—consistency
At present, due to lack of resources, the MOF does not plan to compile a consistent GFS time series. GFS compilers are, however, aware of changes from one year to another, and can assist users in this regard if questions arise.
For future dissemination of GFS, the MOF plans to provide explanations in the publications for GFS inconsistencies and non-comparability of the data.
Serviceability—revision policy and practice
The MOF recognizes that revisions to data need to be visible. The MOF plans to publish monthly data in addition to cumulative year-to-date data (i.e., state intention to do so and by when). Preliminary data and final data will be clearly identified.
The MOF plans to include a statement on its planned website and in other publications of GFS about its policy to make public the results of studies and analysis of data revisions, if any.
Accessibility—data accessibility
The MOF plans to improve the presentation of aggregated GFS, currently disseminated in SDS and NBG publications, by (i) including more details and changing the analytic framework to conform with international standards; and (ii) including monthly data in addition to cumulative year to date data, for example, one or two months’ historical data with latest month.
The MOF plans to release GFS on a pre-announced schedule. This will be announced on the MOF’s website, as well as on the SDS website.
The MOF plans to make GFS available to all users outside central government at the same time. This will be achieved by publishing all GFS on its website, according to the pre-announced schedule.
The MOF plans to publicize on its website, and on the SDS website, that non-confidential, nonpublished data are available to users upon request.
Accessibility—metadata
Due to lack of resources, the MOF does not plan compile detailed metadata on their GFS compilation in the medium term. However, the MOF plans to compile aggregated metadata on concepts and definitions of GFS compiled and disseminated in Georgia.
Accessibility—assistance to users
The MOF plans to publicize the contact persons for various subject fields of GFS on its website, and in other hard copy publications.
V. Monetary Statistics
Actions Taken
Starting with the annual bulletin of monetary and banking statistics of 2002, the NBG disseminates the monthly data both in Excel files and Acrobat format.
Actions Planned
Prerequisites of Quality—legal and institutional environment
The NBG will study the possibility of concentrating the compilation work of monetary statistics in only one unit or, alternatively, of establishing a procedure to ensure the regular resolution of methodological differences between the two sets of data currently produced.
Methodological soundness—concepts and definitions
The NBG will publish monetary data consistent with the MFSM (as reported by NBG to the IMF’s Statistics Department) together with a supplementary set of key data that are used for monitoring the financial program with the IMF, if needed.
Methodological soundness—scope
The NBG will collect information on quantitatively significant1 nonbank depository corporations to expand the coverage of the depository corporations survey, and complete the collection of information additional to the chart of accounts for commercial banks to comply with the sectoral classification of financial instruments recommended by the MFSM.
In the medium term, the NBG will collect information on insurance companies and pension funds to expand the coverage of the financial corporations survey.
VI. Balance of Payments Statistics
Actions Taken
The SDS has introduced an advance release calendar for balance of payments statistics for the year ahead that indicates no later than dates for the dissemination of preliminary, revised, and final quarterly and annual balance of payments statistics. The advance release calendar will be placed on the SDS website. The calendar will indicate that there will be a simultaneous release of data to all users with no prior access by those in Government. The calendar will indicate that the data will be initially disseminated via a press release and the SDS website, and subsequently published in the NBG’s Quarterly Bulletin and in the SDS Statistical Yearbook. The SDS now disseminates annual balance of payments data on its website. The Balance of Payments Division has recently been allocated two new computers.
Actions Planned
Prerequisites of Quality—legal and institutional environment
The SDS will propose balance of payments statistical surveys for inclusion in the State Program of Statistics to be undertaken under the full mandate of the Law on Statistics. Subject to a decision by the Government regarding increased penalties for nonresponse, the SDS will apply the penalties selectively and give them publicity.
Subject to the State Department of Customs being made responsible for compiling trade statistics consistent with international standards for the coverage and valuation of goods crossing the customs frontier, the SDS will work with the State Department of Customs to reconcile bilateral discrepancies with the customs authorities in the major partner countries.
Prerequisites of Quality—resources
Within the framework of the medium-term budget, the SDS will propose that additional staff and financial resources be allocated to balance of payments compilation.
Integrity—transparency
The SDS will include a statement on the SDS website that states that strict and unambiguous embarge arrangements apply to new or revised balance of payments data to ensure the simultaneous release to all users outside the SDS. Users of the data will be asked to attribute the data to the SDS when they are used or reproduced.
To enhance the transparency of balance of payments data, the SDS will indicate on the SDS website that, because of budget constraints, balance of payments data are compiled largely from administrative data sources (i.e., data collected by other Government agencies for other purposes). It will be noted on the website that some of these data sources, such as customs data for merchandise trade, are seriously deficient for balance of payments purposes, and that efforts are being made to improve these data sources and develop new ones, which will be reflected in revised balance of payments estimates in the future.
Accuracy and Reliability—source data
The SDS plans to introduce a program of balance of payments statistical surveys comprising a general balance of payments survey covering all large enterprises aimed at collecting information on their major nonmerchandize balance of payments transactions; a specialized survey for inward foreign direct investment; and specialized surveys for services receipts (i.e., services provided to nonresidents) for transport, communication, construction, and insurance. Priority will be given to the specialized survey of inward direct investment.
Accuracy and Reliability—statistical techniques
The SDS is developing new statistical techniques to estimate shuttle trade, income and expenditure of residents working abroad, and workers’ remittances.
Serviceability—relevance
The SDS is planning to establish an advisory group to assess the relevance of balance of payments statistics within the framework of official economic statistics. As a first step, the advisory group will establish a process of review to assess how well user needs are being met. The membership of the advisory group will include those agencies consulted in the ROSC User Survey.
Serviceability—consistency
The SDS is developing a sources and methods guide to better inform balance of payments compilers of compilation practices.
Serviceability—revision policy and practice
The SDS will include a revision policy statement for balance of payments statistics on the SDS website. The statement will indicate that SDS intends to periodically undertake studies to document the reasons for the direction and size of revisions to published balance of payments data, and will post these studies on the SDS website. Preliminary, revised, and final data will be noted. The first of these studies, which will provide a study of revisions made to balance of payments statistics over recent years. is currently under way.
Accessibility—data accessibility
The SDS will post summary and detailed quarterly and annual balance of payments data on the SDS website. The format of the presentation will address as wide an array of user needs as possible and will include a detailed statement that corresponds to the recommendations of the fifth edition of the Balance of Payments Manual.
Accessibility—metadata accessibility
The SDS is developing a document outlining the sources and methods used for balance of payments compilation as an aide to users. This will be an abbreviated version of the document being prepared for compilers.
Those with deposits or substitutes of deposits representing more than 5% of the total deposits in the current coverage of depository corporations.