Israel: Report on the Observance of Standards and Codes—Data Module, Response by the Authorities, Detailed Assessments Using the Data Quality Assessment Framework (DQAF)

This Report on the Observance of Standards and Codes—Data Module provides an assessment of Israel’s macroeconomic statistics against the Special Data Dissemination Standard complemented by an assessment of data quality based on the IMF’s Data Quality Assessment Framework, July 2003. The assessment reveals that Israel’s macroeconomic statistics are of generally high quality and are broadly adequate to conduct effective surveillance. However, some shortcomings may impede the accurate and timely analysis of economic and financial developments and the formulation of appropriate policy.


This Report on the Observance of Standards and Codes—Data Module provides an assessment of Israel’s macroeconomic statistics against the Special Data Dissemination Standard complemented by an assessment of data quality based on the IMF’s Data Quality Assessment Framework, July 2003. The assessment reveals that Israel’s macroeconomic statistics are of generally high quality and are broadly adequate to conduct effective surveillance. However, some shortcomings may impede the accurate and timely analysis of economic and financial developments and the formulation of appropriate policy.

I. Overall Assessment

1. Israel subscribed to the Special Data Dissemination Standard (SDDS) on April 23, 1996 and met all requirements on June 5, 2000. The country is generally in observance of the SDDS, meeting the specifications for coverage, periodicity, timeliness, and the dissemination of advance release calendars. Israel avails itself of one of its two flexibility options for the timeliness of the industrial production index and disseminates the data one week later than prescribed. While practices generally meet or exceed SDDS requirements, monitoring of the data releases indicates that there have been some delays in the dissemination of the monetary and financial statistics, particularly the analytical accounts of the central bank. The mission noted that Israel does not fully manifest the intra- and interagency coordination and communication that are the hallmarks of most SDDS-subscribing countries. This has placed an undue burden on the Central Bureau of Statistics (CBS) as the national coordinator. Appendix I provides an overview of Israel’s dissemination practices compared to the SDDS.

2. The Report on the Observance of Standards and Codes (ROSC)—Data Module contains the following main observations. Israel’s macroeconomic statistics are of generally high quality and are broadly adequate to conduct effective surveillance. Israel’s statistical managers are highly aware of all dimensions of data quality and are undertaking reforms—some at the cutting edge—to continue, among other things, to enhance data quality. However, some shortcomings may impede the accurate and timely analysis of economic and financial developments and the formulation of appropriate policy. Foremost among these are deficiencies in the timeliness, concepts and definitions, and classification of monetary statistics. There also is room to enhance source data for national accounts, producer prices, and government finance statistics. The agencies comprising the statistical system, especially the CBS, need adequate and sustained resources to improve the scope and timeliness of data compiled under their mandates commensurate with the substantial transformation of the Israeli economy. The increasing importance of the service industries and the decreasing significance of agriculture, among other developments, characterizes this transformation. The serviceability and accessibility of monetary statistics and, to some extent, producer prices and government finance statistics could benefit from further improvements. Section II provides a summary assessment by agency and dataset based on a four-part scale. This is followed by staff’s recommendations in Section III. The authorities’ response to this report and a volume of detailed assessments are presented in separate documents.

3. This report applies the July 2003 version of the IMF’s Data Quality Assessment Framework (DQAF) to present the mission’s main conclusions. The report organizes the mission’s findings by agency for the first two dimensions of the DQAF and across datasets for the remaining four dimensions of the DQAF.

4. Prerequisites of quality and assurances of integrity. Israel has strong legal and institutional frameworks that support the compilation and dissemination of statistics:

  • The Statistics Ordinance clearly mandates responsibility to the CBS for compiling and disseminating national accounts, prices, and government finance statistics. The ordinance requires the CBS to ensure the confidentiality of individual data providers and administer sanctions for noncompliance with reporting requirements. The CBS resources are increasingly stretched, particularly for compiling national accounts and government finance statistics, because of limited financial and inflexible manpower budgets. The constrained resource situation is likely to tighten further in the face of the measurement demands of a rapidly changing economy. This applies especially to the growth in the service industries, which should be monitored closely. The laws ensure the independence of the CBS. The mission found that the compilation and dissemination of the datasets it reviewed are based solely on statistical considerations and not subject to external influence. Management is highly sensitive to all dimensions of quality and is actively implementing a quality management system. The CBS actively promotes an environment of professionalism, transparency, and adherence to ethical standards.

  • The Bank of Israel (BOI) is responsible for compiling and disseminating monetary statistics by tradition, but the current Bank of Israel Law does not specifically spell out this mandate. However, this law explicitly empowers the central bank to collect data and ensures the confidentiality of the reported data. Resources are broadly adequate to enable the central bank to undertake its current and development work programs. The BOI management is keenly aware of quality issues and is undertaking a major institutional review of its internal organization with the aim of becoming more efficient in discharging its duties while ensuring continued professionalism, transparency, and observance of ethical norms.

5. Methodological soundness. The Israeli macroeconomic statistics broadly follow internationally accepted standards and guidelines on concepts and definitions, scope, classification and sectorization, and basis for recording. The recording basis for monetary statistics generally follows the recommendations of the Monetary and Financial Statistics Manual (MFSM), but their classification/sectorization, concepts and definitions, and, to a lesser extent, scope, need to be improved. Government finance statistics are generally consistent with the System of National Accounts 1993 (1993 SNA) and the Government Finance Statistics Manual 2001 (GFSM 2001). They could benefit from strengthened interagency coordination aimed at improving the scope and basis for recording. The scope and recording basis for producer prices also could be improved. The national accounts follow the 1993 SNA, but the recording of GDP at market prices should be brought in line with international standards.

6. Accuracy and reliability. Macroeconomic statistics in Israel rate highly on accuracy and reliability. In large part, this reflects the efforts to assess source data and validate intermediate data and statistical outputs across datasets. The CBS needs additional resources to improve the source data for national accounts, producer prices, and government finance statistics. For national accounts and producer prices, priority should be given to obtaining more comprehensive and timely inputs. Similarly, for government finance statistics, more timely source data on central and local government operations would contribute to better inputs in the compilation of the consolidated general government accounts. Revision studies for national accounts and, to a lesser extent, producer prices would enhance their accuracy and reliability. Source data for monetary statistics are very accurate.

7. Serviceability. Production and dissemination of real and fiscal sector statistics (for which the CBS uses some estimates) in Israel meet SDDS periodicity requirements and are commendably timely. The BOI has initiated steps to consolidate responsibility for monetary statistics and to improve timeliness. Consistency across datasets is broadly adequate, although there still is room to improve monetary statistics. Most datasets follow the international good practice of providing clear and transparent information about revision schedules and the revisions themselves.

8. Accessibility. Overall, data and metadata are readily accessible, reflecting to a great extent recent efforts of the CBS to revamp its website and enhance responsiveness to inquiries by data users. The BOI is working to address current problems affecting users’ access to monetary data and metadata, including upgrading the BOI website.

9. Israel’s reorientation of monetary policy toward an inflation-targeting regime has significantly affected the use and relative importance of various types of macroeconomic statistics over the last few years. Principally, data requirements for the new regime’s policy design and monitoring have expanded beyond the traditional range of macroeconomic statistics to incorporate new forward-looking indicators of economic activity and prices. In particular, the BOI has increasingly focused on indicators such as productivity, price indices, market-based inflation and interest rate expectations, and information from professional forecasters. In addition, the BOI would like to see the CBS disseminate more timely real sector indicators to better support the inflation-targeting regime. Moreover, the BOI is taking steps to strengthen its statistical forecasting models for assessing the inflationary outlook, among other things, to reduce placing too much emphasis on market-derived indicators. To support this growing demand for economic information, it is important to review and revise appropriately the current allocation of resources for data compilation and dissemination within the BOI and other data-producing agencies. Finally, consistent with the views of the IMF Executive Board,1 the authorities are encouraged to expand the coverage of the forward-looking data that support the monetary regime in Israel on their national websites and the Dissemination Standards Bulletin Board (DSBB), including the addition of relevant metadata.2

10. With regard to government finance statistics, the Ministry of Finance (MOF) was not directly assessed. However, its data are a significant source for the annual consolidated general government accounts compiled by the CBS. The mission met with officials at the MOF to discuss the accounting reforms being implemented in such areas as standardization, accrual-based financial reporting, and the application of information technology to fiscal management and reporting practices. The MOF (accountant general) is midway through implementing the “Merkava” project, which is aimed at, among other things, improving information on the assets and liabilities of the government, developing balance sheets for central government ministries, and preparing accrual-based financial statements commensurate with international standards. The authorities are to be commended for their proactive efforts in improving fiscal transparency and accountability, as well as plans to harmonize the financial management information system being developed with the GFSM 2001. The mission noted the synergies that are possible between the MOF’s work and the CBS’s concurrent implementation of the GFSM 2001 framework for compiling annual consolidated general government accounts. Many of the recommendations contained in the detailed assessments directly relate to fully exploiting these synergies (see the section on government finance statistics in Volume III, Detailed Assessments Using the Data Quality Assessment Framework). Foremost among these is the creation of an interagency working group that would have a mandate—and timetable—to address the following areas: basis of recording, classifications, coverage, periodicity, and timeliness.

II. Assessment by Agency and Dataset

11. In this section, the results are presented for each element of the DQAF using a four-point rating scale (Table 1). Assessments of the prerequisites of data quality and the assurances of integrity (Dimensions “0” and “1” of the DQAF) are presented in Tables 2ab. For each dataset, the assessment of methodological soundness, accuracy and reliability, serviceability, and accessibility (Dimensions “2” to “5” of the DQAF) are shown in Tables 3ae.

Table 1.

Israel: Data Quality Assessment Framework July 2003—Summary Results

article image
Practice observed: current practices generally in observance meet or achieve the objectives of DQAF internationally accepted statistical practices without any significant deficiencies. Practice largely observed: some departures, but these are not seen as sufficient to raise doubts about the authorities’ ability to observe the DQAF practices. Practice largely not observed: significant departures and the authorities will need to take significant action to achieve observance. Practice not observed: most DQAF practices are not met. Not applicable: used only exceptionally when statistical practices do not apply to a country’s circumstances.
Table 2a.

Israel: Assessment of Data Quality—Dimensions 0 and 1—Central Bureau of Statistics

article image
Table 2b.

Israel: Assessment of Data Quality—Dimensions 0 and 1—Bank of Israel

article image
Table 3a.

Israel: Assessment of Data Quality—Dimensions 2 to 5—National Accounts

article image
Table 3b.

Israel: Assessment of Data Quality—Dimensions 2 to 5—Consumer Price Index

article image
Table 3c.

Israel: Assessment of Data Quality—Dimensions 2 to 5—Producer Price Index

article image
Table 3d.

Israel: Assessment of Data Quality—Dimensions 2 to 5—Government Finance Statistics

article image
Table 3e.

Israel: Assessment of Data Quality—Dimensions 2 to 5—Monetary Statistics

article image

12. With the assistance of the authorities—and to complement the Fund’s assessment of the quality of official statistics produced by Israel—the mission conducted an informal survey of key users of macroeconomic statistics. Questionnaires were sent to 40 users with 18 responses received from academics, banks, public and private sector analysts, and consulting companies. Users were asked to evaluate the coverage, periodicity, timeliness, dissemination practices, accessibility, and overall quality of the official statistics.

13. Data users informed the mission that there had been recent improvements in data production and dissemination, particularly in the CBS website and the bureau’s timely responses to inquiries. However, they noted that there was room to improve the BOI and the MOF websites and the two agencies’ services in response to inquiries. They were also concerned about the scope and dissemination of monetary as well as the MOF’s central government tax and expenditure data, the timeliness of the consumer price index (CPI) and other real sector data, the lack of good-quality data on some service industries, and the large revisions in national accounts, including trade statistics. There was also a widespread view that, given the substantial ongoing transformation of the Israeli economy, the CBS faced a daunting task to cope with the growing statistical demands, exacerbated by severe manpower and financial budget constraints. Respondents also indicated that while ad hoc funding arrangements with various national institutions had alleviated some of these constraints, the situation was not sustainable without a longer-term solution.

III. Staffs Recommendations

14. Based on the review of Israel’s statistical practices, discussions with the data-producing agencies, and responses from data users (see Appendix III of the Detailed Assessments volume), the mission has a set of recommendations. They are designed to increase further Israel’s adherence to internationally accepted statistical practices and would, in the mission’s view, enhance the analytical usefulness of Israel’s statistics. Some additional technical suggestions are included in the Detailed Assessments volume.

Cross-cutting recommendations

  • The CBS, together with the BOI, the MOF, and other relevant agencies, should improve coordination and, among other things, establish working groups on standardizing statistical production (e.g., fully adopting the 1993 SNA and migrating to the GFSM 2001 framework for compiling policy-relevant fiscal data). The mandate and modus operandi of such working groups should be formalized so as to better exploit possible synergies in statistical processes, including the design of the websites.

  • Urgent action is needed to provide additional staff to the CBS to discharge its mandate in terms of current and future work programs. In addition, adequate funding needs to be secured to ensure that IT resources promote efficient execution of its statistical responsibilities.

  • Investigate options for further streamlining the responsibilities for statistical operations of the CBS with a view to freeing up resources to meet the emerging demands for new statistics.

  • Improve the coverage and timeliness of annual business surveys used for compiling national accounts and price indices. In particular, surveys generating more detailed information on the composition of intermediate consumption in the manufacturing and service industries are needed. Furthermore, the range of price indices for compilation of constant price estimates should be extended.

National Accounts

  • Bring the recording of GDP at market prices into accordance with international standards by including net taxes on imports and excluding subsidies received by exporters.

Consumer and Producer Price Indices

  • Consider disseminating the CPI earlier and separating it from the WPI. Although price data exceed the SDDS requirements, advancing the release of the CPI will better serve the users’ needs in an inflation-targeting environment. Moreover, it could serve to strengthen the integration of input and output producer prices and give more prominence to the producer price index (PPI). More resources are needed for the latter.

  • Update the WPI weights more frequently and provide additional metadata on the index (e.g., how the weights are derived at each level of aggregation and how establishment and product samples are drawn and maintained).

  • Undertake more research to ensure that imputed prices are appropriate for industries with high turnover of product models and industries with products from unique projects. Further, investigate uncontrolled quality characteristics pertaining to the rental index calculation used for the housing component of the CPI.

Government Finance Statistics

  • The CBS should establish and lead an interagency working group to identify deficiencies in data-collection programs for government finance statistics source data and propose recommendations and an action plan, as relevant. The bureau should coordinate activity—through formalized and regular contacts—to improve the coverage, classification, and recording of the data on all central government units in line with its ongoing migration toward full implementation of the GFSM 2001 framework.

  • Validate and incorporate, in collaboration with the MOF, the data obtained from the ongoing adjustments being made for accrual accounting in the context of the “Merkava” project. Further, incorporate findings in the annual general government accounts compiled by the CBS through the construction of detailed bridge tables adopting GFSM 2001 definitions of revenue and expense, nonfinancial assets, and financial assets and liabilities.

  • Accelerate ongoing work aimed at compiling the financial account of the general government so as to allow for improved validation and consistency of the data derived from the nonfinancial accounts of the consolidated general government sector. This work should be coordinated with the activities of the MOF and the BOI.

  • Supplement the current 1993 SNA-based presentation of consolidated general government accounts by publicly disseminating the existing time series that have been compiled according to the presentation prescribed in the GFSM 2001 on the CBS website.

Monetary Statistics

  • Include in the BOI statistical program, with the highest priority, a project for the (a) compilation of monetary statistics in accordance with the MFSM methodology; (b) timely provision of monetary statistics and metadata to the IMF for updating the DSBB; and (c) preparation of the new Standardized Report Forms (SRFs) for the submission to the IMF of monetary statistics published in International Financial Statistics. SRFs should serve as an effective tool in promoting international standards.

  • Ensure that the text of the new BOI Law under preparation (a) clearly authorizes the central bank to compile and disseminate monetary and financial statistics; (b) broadens the authority of the BOI to collect data not only from the depository corporations subsector, but also from all other financial institutions in Israel for statistical purposes; and (c) cross-references the Statistical Ordinance’s Secrecy Clause to facilitate sharing of confidential data among the statistical agencies.

  • Apply, on an ongoing basis, for the participation of BOI staff in the courses and seminars on monetary statistics offered by the IMF.

  • Revise the design of the BOI and CBS websites, as well as other dissemination media, including the posting and publication of methodological notices and clear warnings. This would help users access monetary statistics easily and prevent any confusion on which dataset better meets their needs. Especially, designate only one comprehensive and internally consistent dataset as “monetary statistics” and adopt other names for the other datasets.


Table 4.

Overview of Practices Regarding Coverage, Periodicity, and Timeliness of Data Compared to the SDDS

article image
Notes: for periodicity and timeliness: (D) daily; (WD) working days or business days; (W) weekly or with a lag of the number of week(s) shown from the reference date; (M) monthly or with a lag of the number of month(s) shown from the reference date; (Q) quarterly or with a lag of the number of quarter(s) shown from the reference date; (SA) semiannual; (A) annual; (NLT) not later than; and (…) not applicable.

Given that the data are broadly disseminated by private means, the timeliness with which official data are disseminated is not time-critical.


See The Acting Chair’s Summing Up, Fifth and Sixth Reviews of the Fund’s Data Standards Initiatives (BUFF/03/116, 07/15/03 and BUFF/05/178, 11/04/05).


The SDDS provides for the dissemination of forward-looking indicators as an encouraged category—a data category that is not prescribed, but is recommended—for enhancing the transparency of economic performance and policy.