APPENDIX I Euro Area—Statistical Issues
Euro-area statistics have improved significantly since 1999, both in scope and timeliness. There is now a plethora of economic time series covering history and current developments available on the Eurostat and ECB websites; GDP flash estimates are published less than two months after the end of a quarter; and inflation flash estimates are available at the end of the reference month.
But considerable gaps remain, in particular on the income side of the national accounts, on labor markets, on external trade, and on the flow of funds:
Data for the income side of the national accounts either lag significantly or are nonexistent. As a result, private household behavior in particular is difficult to analyze. A lack of standardized data at the country level for many members seems to be the main obstacle.
On labor market data, better quality and sampling should help improve the statistics by 2005, when labor market surveys will be conducted every quarter throughout the area. A continuous labor force survey promises to provide better information on hours worked and detailed labor force breakdowns based on demographic characteristics and type of jobs. However, prospects for improving the timeliness of data on labor costs are dim. The publication delay has been reduced from 90 to 80 days after the end of the quarter and new regulations will only allow a reduction to about 70 days.
The link between balance of payments data at the country and area-wide level is still tenuous, owing to measurement problems regarding intra-area trade, transfers, and capital flows. Efforts to reconcile the discrepancies are underway. There is also a need to upgrade the quality and scope of extra-area trade data.
Annual flow-of-funds data for the area as a whole are now available, but the provision of more up-to-date information and, in particular, quarterly data would be useful. The ECB has indicated that procedures are being introduced that envision shortening the time lag for annual data to six months, from a current lag of nine months.
As regards fiscal data, a key input to fiscal surveillance under the SGP, a Code of Best Practice was adopted in 2003 to improve the timeliness and quality of data. However, large revisions to general government data remain frequent and continue to raise questions about data integrity. Moreover, the discrepancies between accrual- and cash-based fiscal data in some countries remain uncomfortably large. At the same time, the procedures leading to Eurostat decisions on fiscal accounting issues were streamlined and accelerated.
Including the trade policies of the European Union.
Based on the approach developed by the Coordinating Group on Exchange Rate Issues (CGER).
See Selected Issues paper “Why is Productivity Growth in the Euro Area so Sluggish?”
Adjusting for about three more-than-usual working days in 2004 would reduce the staff’s annual GDP growth forecast by ¼ percentage point.
For the latter view, see the 2004 CEPR report on Monitoring the ECB.
See Selected Issues paper “Global Rebalancing of Current Accounts: A Euro-Area Perspective.”
Staff’s own upward revisions of structural deficits illustrate this problem: while the May 2001 WEO estimated the area’s structural deficit in 2000 at ½ percent of GDP, the May 2004 WEO estimated the same deficit to have amounted to 1½ percent of GDP.
See Selected Issues paper “Enforcement and the Stability and Growth Pact.”
The Selected Issues paper “Implementing Lisbon: Incentives and Constraints” provides background and analyzes political economy aspects of structural reforms.
Recent OECD evidence suggests that while product markets of virtually all OECD countries have become more market friendly, the pace of reform has varied significantly across countries, and especially within the EU. See “Regulation, Productivity, and Growth: OECD Evidence” by Nicoletti and Scarpetta, Economic Policy, April 2003.
See Selected Issues paper “Changing Patterns of EU-China Trade.”
See appendix on Statistical Issues.