I. Introduction

The Mexican authorities concur with the mission’s general findings on the quality of Mexican statistics: dissemination of data subject to the SDDS is in observance of all SDDS specifications, including data coverage, periodicity, and timeliness and the dissemination of advance data release calendars; the overall quality of statistics is good and the authorities are working to improve them; and the authorities maintain an open dissemination policy and make sufficient information available to the public in printed form and on the websites of the statistics-producing agencies.

Moreover, the Mexican authorities agree with the mission’s main findings regarding the different elements of the Data Quality Assessment Framework: the legal environment is generally adequate; all the agencies demonstrate professionalism and provide their staff with ethical guidelines; the selection of data sources and methods is governed by statistical considerations; the agencies’ statistical policies and practices are transparent; internationally accepted concepts and definitions have generally been applied or are being adopted; adequate source data are generally available; the periodicity and timeliness of the statistics are good; and statistics are disseminated simultaneously to all users in accordance with a calendar established in advance. The authorities agree with the need to provide detailed methodological notes on the compilation of the balance of payments and monetary statistics.

The lag between the mission’s report on the Data Module of the ROSC for Mexico and its date of publication has enabled many of the mission’s comments or recommendations for further improving the quality of Mexico’s macroeconomic statistics to be carried out (as noted in footnotes in the mission documentation); these comments and recommendations, therefore, no longer apply.

II. National Accounts

As part of its ongoing work in the compilation of national accounts, the Mexican authorities agree in general with the mission’s main findings: the adequate legal and institutional environment in which they unfold; the professionalism of human resources and the continuous implementation of training programs; the constant revision of work processes; the exhaustive utilization of data-processing technology to improve efficiency in the use of the resources; the extensive coverage of statistics and the open dissemination policy of information; the consistency of periodicity and timeliness with international standards; the simultaneous dissemination of statistics to all users in accordance with a calendar established in advance; the institution’s internal ethical code and the methodological soundness with which international standards are implemented.

The authorities also coincide with the mission’s assessment regarding the need to identify separately research and development expenditures, as well as the production of original literary or artistic works and the production of computer programs for internal use.

Regarding the mission’s comment on the non-adoption of the central product classification, Mexico has undertaken since 2000 an ambitious project with Canada and the US to establish a comparable set of business activity statistics. This set will complement the North American Industry Classification System (NAICS), which was implemented in 1997 after the subscription of the North American Free Trade Agreement (NAFTA) in 1994.

As the mission expresses in its report, the accuracy and confidence of the national accounts rests partially on monthly and annual sector surveys, as well as on 10-year censuses. In this context, the Mexican authorities have extended the conceptual coverage of these surveys since 2003 in order to obtain information about a greater number of variables that will be used in the development of the national accounts. New items include inputs, capital formation, and changes in stocks, among others.

Similarly, the frameworks for the existing surveys and censuses are being revised and adjusted to the System of National Accounts, 1993 (1993 SNA) in order to make them compatible with the informational requirements for the elaboration of macroeconomic indicators.

The supply-and-use tables that are compiled annually will be complemented for the period 1998-2003 with an input-output matrix. This matrix is already under development. The matrix will itemize intermediate consumption by main products and, as a result, will permit the disclosure of additional annual information that can be combined with the breakdown included in annual surveys.

Following the mission’s recommendations, the calculation of taxes on products at constant prices is being revised for both quarterly and annual statistics. The quarterly revisions will be applied as soon as a new change of base year is implemented. The annual revisions will follow the Denton method to align the estimates of the quarterly Gross Domestic Product with the values that are obtained on an annual basis.

Finally, the Mexican authorities expect to include periodic and systematic consultations with users of the national accounts system of Mexico in their regular survey activity.

III. National Consumer Price Index

Regarding the mission’s comment that the NCPI index weights, which are based on the results of the 1989 National Survey of Urban Household Income and Expenditure (ENIGH), exceed the international recommendation of updating them every five to seven years, Banco de Mexico in July 2002 changed the NCPI base to second half of June 2002 = 100.

IV. Balance of Payments Statistics

As described in the mission’s report, considerable progress has been made in moving from the fourth edition (BPM4) to the fifth edition of the Balance of Payments Manual (BPM5). The significant progress already achieved by Banco de México in the transition of the structure and classification of the balance of payments statistics makes it possible for the Banco de México to begin publishing official balance of payments statistics based on the BPM5 proposed methodology starting with the first quarter of 2003. Regarding more specific recommendations of the IMF mission, Banco de Mexico would like to highlight the following:

• Regarding the recommendation to include a finer breakdown of services in the current account, Banco de México has been working towards the identification of new information sources that would eventually allow to meet the BPM5 required breakdown. However, as of today, there is no information available on such items as construction services, information technology, and cultural and recreational services. Nevertheless, Banco de México considers that the current breakdown reasonably approximates the BPM5 required breakdown, and plans to incorporate new concepts into the services account of the balance of payments statistics as soon as new information becomes available.

• Regarding the identification of capital transfers, transfers currently incorporate workers’ remittances, donations, and pensions. Nevertheless, due to limitations in the compilation process, it is virtually impossible to distinguish current from capital transfers. However, given the general characteristics of the operations, Banco de Mexico presumes that capital transfers are not significant.

• Regarding the requirement to break down financial operations of the foreign branches of Mexican banks according to a residency criterion, this change will be incorporated in this year’s official balance of payments statistics.

Banco de México fully agrees with the mission’s recommendation on the need to disseminate complete metadata related to balance of payments statistics. Banco de México plans to publish this year on its website metadata related to balance of payments statistics. Banco de México will, first, include summaries of the methodology, which can be found on the IMF’s Dissemination Standards Bulletin Board, and, later in the year, will incorporate more detailed methodology on the balance of payments statistics.

Banco de México also concurs with the mission’s recommendation regarding the need to inform in advance of any change in methodology, information coverage, concepts, and classification and statistical techniques employed in the elaboration of balance of payments statistics. Banco de México plans to comply with these practices in 2003.

With respect to the mission’s recommendation of introducing a formal process of consultation with regard to users’ needs, Banco de México agrees with the usefulness of such a tool and plans to evaluate its establishment.

V. Monetary Statistics

In the area of monetary statistics, the IMF mission concluded that Banco de México has achieved a high degree of compliance with agreed international standards. The data module also helped to identify areas for improvement, mainly in the metadata of analytical releases, and the need to enhance the reported statistics. In particular the new surveys (central bank, ODC, and depository corporations) will be a useful tool for monetary analysis. The excellent coordination and cooperation between Banco de México and the IMF contributed to the release of the above-mentioned surveys and to the improvement in the timeliness of the data.

Regarding the mission’s comments on the delays in the submission of the reports of some ODCs, which according to the IMF mission prevents more timely dissemination of detailed monetary statistics, the delay has been further reduced by nine days. Moreover, Banco de Mexico expects that by the end of the second quarter of 2003 the data file will be transmitted to the IMF at the end of each month.

With respect to the mission’s comment that Banco de México does not make available to the public extensive documentation of the methodology currently employed in compiling monetary statistics, Banco de Mexico has already posted an extensive methodological note on its website.

On the mission’s comments that the information on the IMF’s website for the Dissemination Standards Bulletin Board should reflect recent changes in the ODCs source data or monetary aggregates and financial methodologies, Banco de México has already updated the metadata.

VI. Government Finance Statistics

In general, the mission reports that government finance statistics observe the dimensions associated with prerequisites and integrity, as well as those related to relevance, consistency, metadata accessibility, and assistance to users.

The mission’s evaluation of methodological soundness is based on the conceptual framework embedded in the Government Finance Statistics Manual (GFSM 1986) and not on the conceptual framework of public finances in Mexico, which is designed to facilitate the analysis of budgetary entries in accordance with Mexican regulations. In this context, the following elements should be highlighted:

• The balance definition, revenues minus expenditures, is the same in both conceptual frameworks. However, the classification of revenues and expenditures follows different criteria.

• The GFSM 1986 focuses its analysis on the Central and General Government classifications, while the Mexican budget focuses on the non-financial public sector classification. This result is attributable to the fact that fiscal policy in Mexico is not centered on governmental units but on the overall public sector. For instance, public entities absorb an important part of public debt, there is a significant dependency of Federal Government revenues on revenues of public entities such as PEMEX, and the implementation of investment projects in public entities is subject to Congress approval and not only to profitability criteria.

• Most importantly, Mexico provides monthly and annual information with the institutional coverage of the GFSM 1986 for the preparation of the publications International Financial Statistics and the Government Finance Statistics Yearbook, respectively. Thus, Mexican government finance statistics, consistent with international standards, are publicly available on a regular basis. The fact that the Mexican authorities follow national criteria in their official reports does not imply that internationally comparable statistics are not regularly disclosed.

Government Finance Statistics Follow-Up of Staff’s Recommendations

^1/Mexico currently avails itself of a flexibility option under the SDDS in this regard.

Government Finance Statistics Follow-Up of Staff’s Recommendations

1. Ensure that the statistical agencies are required, as well as authorized, to disseminate to the public macroeconomic statistics for which they are responsible.	A proposal modifying the SHCP By-laws to make the Government Finance Statistics Department and the Press Office responsible for the dissemination of government finance statistics has been submitted to the appropriate authorities.
2. Introduce a mechanism in the information system to facilitate derivation of government finance statistics directly and automatically from budgetary accounts.	Since February 2002, with the implementation of the Sistema Integral de Administración de Fondos Federales (SIAFF), most of the expenditure statistics of the Federal Government are automatically generated.
3. Routinely compile and disseminate statistics for the various levels of government (including consolidated central government and general government) following classification and presentation formats recommended in the GFSM 1986.	In April 2002, the SHCP added to its website the document Balance Fiscal en México: Definicion y Metodología, which presents a detailed and integral definition of the different precepts related to the financial obligations of the public sector. Mexico provides monthly and annual information with the institutional coverage of the GFSM 1986 for the preparation of the publications International Financial Statistics and the Government Finance Statistics Yearbook, respectively. Nonetheless, starting June 2003, the SHCP’s website will include a section with public finance information following the classification and presentation formats recommended by the IMF. Similarly, the information based on the traditional methodology will be complemented with additional tables to facilitate its analysis.
4. Consider adoption of the GFSM 2001 and develop a migration path for compiling and disseminating statistics in accordance with its guidelines.	The Ministry of Finance is currently evaluating the adoption of the GSFM 2001 and analyzing the appropriate strategy for gradually migrating to this new conceptual framework.
5. Establish procedures for informing users about data revision studies.	The Ministry of Finance’s web page will report data revisions, as well as the main methodological modifications, when considered appropriate.
6. Compile and disseminate more timely statistics on state and local governments.	Starting 2003, INEGI implemented the Monthly Statistics of State Public Finances, which will allow the Ministry of Finance to compile revenue, expenditure, and financing information for state governments in a timelier manner.
7. Improve the timeliness of statistics on central government and general government operations with a view to complying with SDDS requirements.1/	An effort will be made to reduce the existing lag in the availability of data on general government operations. Monthly data on central government operations will continue to be released 30-35 days after the end of the reference month (as opposed to the 30 days established in the SDDS). This policy allows the Ministry of Finance to comply with its different information disclosure obligations on only one dissemination date.

^1/Mexico currently avails itself of a flexibility option under the SDDS in this regard.

View Table

Government Finance Statistics Follow-Up of Staff’s Recommendations

1. Ensure that the statistical agencies are required, as well as authorized, to disseminate to the public macroeconomic statistics for which they are responsible.	A proposal modifying the SHCP By-laws to make the Government Finance Statistics Department and the Press Office responsible for the dissemination of government finance statistics has been submitted to the appropriate authorities.
2. Introduce a mechanism in the information system to facilitate derivation of government finance statistics directly and automatically from budgetary accounts.	Since February 2002, with the implementation of the Sistema Integral de Administración de Fondos Federales (SIAFF), most of the expenditure statistics of the Federal Government are automatically generated.
3. Routinely compile and disseminate statistics for the various levels of government (including consolidated central government and general government) following classification and presentation formats recommended in the GFSM 1986.	In April 2002, the SHCP added to its website the document Balance Fiscal en México: Definicion y Metodología, which presents a detailed and integral definition of the different precepts related to the financial obligations of the public sector. Mexico provides monthly and annual information with the institutional coverage of the GFSM 1986 for the preparation of the publications International Financial Statistics and the Government Finance Statistics Yearbook, respectively. Nonetheless, starting June 2003, the SHCP’s website will include a section with public finance information following the classification and presentation formats recommended by the IMF. Similarly, the information based on the traditional methodology will be complemented with additional tables to facilitate its analysis.
4. Consider adoption of the GFSM 2001 and develop a migration path for compiling and disseminating statistics in accordance with its guidelines.	The Ministry of Finance is currently evaluating the adoption of the GSFM 2001 and analyzing the appropriate strategy for gradually migrating to this new conceptual framework.
5. Establish procedures for informing users about data revision studies.	The Ministry of Finance’s web page will report data revisions, as well as the main methodological modifications, when considered appropriate.
6. Compile and disseminate more timely statistics on state and local governments.	Starting 2003, INEGI implemented the Monthly Statistics of State Public Finances, which will allow the Ministry of Finance to compile revenue, expenditure, and financing information for state governments in a timelier manner.
7. Improve the timeliness of statistics on central government and general government operations with a view to complying with SDDS requirements.1/	An effort will be made to reduce the existing lag in the availability of data on general government operations. Monthly data on central government operations will continue to be released 30-35 days after the end of the reference month (as opposed to the 30 days established in the SDDS). This policy allows the Ministry of Finance to comply with its different information disclosure obligations on only one dissemination date.

^1/Mexico currently avails itself of a flexibility option under the SDDS in this regard.