The country lacks an integrated statistical framework that would take account of the various analytical and accounting linkages across macroeconomic statistics, and the relationships between regulatory tools, intermediate objectives, and policy goals. There is significant room to improve the methodological soundness, accuracy, and reliability of the statistics, for instance, by expanding the data sources for most sectors, as well as by strengthening data validation and statistical techniques for most datasets. Paraguay should improve the access to official statistics and metadata.

Abstract

The country lacks an integrated statistical framework that would take account of the various analytical and accounting linkages across macroeconomic statistics, and the relationships between regulatory tools, intermediate objectives, and policy goals. There is significant room to improve the methodological soundness, accuracy, and reliability of the statistics, for instance, by expanding the data sources for most sectors, as well as by strengthening data validation and statistical techniques for most datasets. Paraguay should improve the access to official statistics and metadata.

I. Overall Assessment

1. While noting some recent improvements, the mission that prepared this Report on the Observance of Standards and Codes (ROSC) identified shortcomings in Paraguay’s statistical practices and databases that have the potential for detracting from the accurate and timely analysis of economic and financial developments, and the formulation of appropriate policies. The country lacks an integrated statistical framework that would take account of the various analytical and accounting linkages across macroeconomic statistics, and the relationships between regulatory tools, intermediate objectives, and policy goals. The weaknesses in the statistical legislation, as well as the scarcity of resources and low priority given to statistical work are important impediments to the production and dissemination of timely, methodologically sound, and reliable statistics.

2. The mission identified the main weaknesses and made recommendations to further enhance Paraguay’s adherence to international statistical standards. In particular, (i) with the exception of the consumer price index, there is significant room to improve the methodological soundness of all official statistics, for example, by expanding their scope and adopting internationally accepted classification systems and basis for recording; (ii) the accuracy and reliability of the statistics also needs to be improved, for instance, by expanding the data sources for most sectors, as well as by strengthening data validation and statistical techniques for most datasets; (iii) the periodicity and timeliness of national accounts and government finance statistics do not fully meet international standards, and the intersectoral consistency of the macroeconomic statistics cannot be ascertained with the data disseminated to the public; and (iv) there are opportunities to improve the access to official statistics and metadata, as well as the services offered to the users by the data-compiling agencies.

3. Paraguay participates in the GDDS since September 21, 2001 and meets the recommendations for the coverage, periodicity, and timeliness of most data categories. However, there are some important exceptions, including (i) the lack of production indices and data on public and publicly guaranteed debt service schedule; (ii) limitations in the coverage of national accounts (data on national income and savings are not compiled), general government operations (data on local governments are not available), public and publicly guaranteed external debt (excludes short-term debt of the nonfinancial public sector), and monthly data on foreign trade (excludes goods not recorded by Customs); (iii) the periodicity of data for the consolidated central government operations (data on nonbudgetary operations are only disseminated on an annual basis); and (iv) the timeliness of annual GDP (data are disseminated only when data based on the income approach becomes available) and data on the consolidated central government operations. Only data for budgetary central government are disseminated on a monthly basis. Appendix I provides an overview of Paraguay’s dissemination practices compared to the GDDS.

4. In applying the IMF’s Data Quality Assessment Framework, July 2003 (DQAF), the remainder of this section presents the mission’s main conclusions. The presentation is done at the level of the DQAF’s quality dimensions, by agency for the first two dimensions and across datasets for the remaining four. Section II provides a summary assessment by agency and dataset based on a four-point scale. This is followed by staff recommendations in Section III. Practices compared to the GDDS are summarized in Appendix I. The authorities’ response to this report and a volume of detailed assessments are presented in separate documents.

5. Prerequisites of quality and assurances of integrity:

  • The compilation of statistics by the Central Bank of Paraguay (CBP) is based on a legal framework that broadly supports mandatory data reporting and the confidentiality of the reported data. While the resources are minimally adequate for the current statistical programs, they are insufficient to support important developmental work. The concentration of work in macroeconomic statistics at the CBP puts pressure on its resources and raises a fundamental issue of the appropriateness of a central bank to compile price statistics. The CBP maintains some informal contacts with data users, but there are no formal consultations with users to monitor the relevance of the statistics or to identify emerging data requirements. CBP authorities are aware that continued efforts are needed to improve the quality of the statistics, but more systematic data quality verification procedures need to be established. The CBP is a technical institution that has administrative autarky and normative autonomy, and CBP staff are independent in their choice of data sources, methods, and data dissemination policies, within the limits of available resources. Processes and activities in the workplace promote a culture of professionalism. The CBP is authorized to comment, clarify, and correct erroneous interpretations or misuse of statistics by users or by the media. The terms and conditions for compiling statistics are specified in the relevant laws, which are available to the public. Government officials outside the CBP have no access to the information until it is released to the general public. CBP regulations, which are well known by the staff, clearly specify the rights and responsibilities of CBP staff, including rules of conduct and disciplinary sanctions.

  • The legislation supports the collection, compilation, and dissemination of government finance statistics (GFS), budget, and accounting data by the Ministry of Finance (MOF). Nonetheless, the institutional responsibility for collecting, compiling, and disseminating GFS by a unit in the MOF is only defined by an internal provision. The laws also protect the confidentiality of the data and specify the obligatory character of data reporting. However, some decentralized entities and public corporations report data to the MOF with delays and the municipalities do not report data. Also, procedures for data sharing and coordination within the MOF and between the MOF and other data-producing agencies need to be improved. While there is some room to make more efficient use of the existing resources, these are clearly insufficient to compile comprehensive and timely fiscal data, especially if the MOF decides to migrate to the Government Finance Statistics Manual 2001(GFSM 2001). Also, regular procedures to consult with data users and to monitor the quality of the statistics need to be established. No official agency outside the MOF has access to data prior to publication, and there is no evidence of political influence on the selection of compilation methods or data output. However, the terms and conditions under which fiscal data are compiled are not made known to the public. The legislation provides clear guidelines on staff behavior and administrative procedures, which are made known to the staff.

  • The Statistical Law of 1942 created the organizational structure of the official statistical services and identified the Directorate General of Statistics, Surveys, and Censuses (DGSSC) as the principal statistical agency, with the responsibility for coordinating and integrating all official statistical activities. The Law specifies the mandatory character of data reporting and the confidentiality of the data. However, the central role that the Law confers to the DGSSC has not been put into effect due to its lack of autonomy and the low priority given to statistical activities by the national authorities. The scarcity of resources is so severe that most censuses and surveys are mainly financed by international agencies. The DGSSC concentrates mainly on the production of basic demographic and social statistics and indicators. The DGSSC authorities are aware that it is necessary to organize a national statistical system that is technically and operationally sound and efficient, and produces and disseminates objective and timely information. Their efforts focus on the adoption of a new National Statistics Law establishing the National Statistical System (NSS) and creating the National Statistics Institute (NSI).1

6. The methodologies for price indices and, to a lesser extent for monetary and balance of payments statistics, broadly follow international standards. However, there are important shortcomings in the methodological soundness of national accounts and government finance statistics. In general, there is room for improving the scope of all macroeconomic statistics. For example, the geographic coverage of the CPI and the coverage of economic activities in the PPI need to be expanded. For national accounts, the sequence of accounts for the total economy and the rest of the world account need to be compiled, and the scope of monetary statistics should be broadened significantly by including data for credit unions, a rather large and rapidly growing sector. The basis for recording national accounts, balance of payments, and GFS should be improved by, for example, fully adopting accrual accounting. Classification and sectorization systems, in general, do not follow rigorously international standards.

7. Accuracy and reliability elements are, for the most part, appropriately treated in the monetary statistics, but there is significant room for improvement in all other datasets. Source data are reasonably available for monetary statistics, but are not sufficiently developed for the national accounts, government finance, and balance of payments statistics. Despite recent improvements in data sources for national accounts, including the ongoing household survey, data for construction, a significant part of nonfinancial services, household consumption, and changes in inventories are insufficient. Also, the PPI basket is not fully representative of current national output. With the exception of data on budgetary operations, source data for fiscal statistics has limitations. Source data from customs and surveys are insufficient for the balance of payments. Validation of source data is adequate only for national accounts, monetary, and balance of payments statistics, while statistical techniques need to be improved for most datasets, in particular for national accounts. For example, the reference year for national accounts (1994) has become obsolete and there is excessive use of fixed intermediate consumption/output coefficients; CPI weights have not been updated during the past 13 years; sampling and nonsampling errors are not calculated and missing prices are not imputed in price statistics; and there is a need to monitor more closely the impact of informal activities. Except for prices and national accounts, the procedures for validating intermediate and final data are weak, and revision studies and analysis are mostly incipient in all statistical agencies.

8. Serviceability of the assessed macroeconomic statistics is broadly satisfactory, as confirmed by the results of a user survey conducted in the context of this assessment. With the exception of national accounts and GFS, data in all other assessed areas are compiled and disseminated with the periodicity and timeliness recommended by the GDDS. However, publicly available information does not permit the reconciliation of the statistics across sectors and there is some room to improve the consistency of data within each dataset and over time. Regular procedures and closer interagency coordination will be required to enhance the intersectoral consistency of macroeconomic statistics. While statistical agencies have well established revision policies and practices for most datasets, these are not communicated to the public. Preliminary and revised data are not always identified in all publications.

9. There are opportunities to improve accessibility of all official statistics, for example, by adopting advance release calendars and making the download of statistics from the official websites more user friendly. Metadata are adequate for most datasets, but the information posted on the DSBB for national accounts needs to be updated and the metadata for GFS need to be enhanced. The metadata posted on the IMF’s DSBB should be updated more regularly. Statistics are released simultaneously to all users, and unpublished nonconfidential data are made available upon request. Assistance to users could also be improved for most datasets, for example, by providing sector-specific contact information.

10. At the request of the authorities, Paraguay’s current data dissemination practices were also reviewed against the requirements of the Special Data Dissemination Standard (SDDS).2 The following points about the coverage, periodicity, and timeliness prescriptions of the data dimension highlight some significant issues to be addressed prior to Paraguay’s subscription to the SDDS:

  • In the real sector, (i) national accounts need to be compiled with quarterly periodicity and disseminated no more than three months after the end of the reference period; (ii) production indices need to be compiled with monthly periodicity and timeliness; (iii) labor statistics (employment, unemployment, and wages/earnings), currently compiled only on an annual basis and disseminated with a five-month lag, need to be compiled with quarterly periodicity and disseminated no more than three months after the end of the reference period.

  • In the fiscal sector, (i) data on the operations of the consolidated general government needs to be compiled on an annual basis and disseminated within six months of the end of the reference period; (ii) data on consolidated central government operations needs to be compiled on a monthly basis and disseminated not later than one month after the end of the reference period; (iii) data on central government debt needs to be compiled on a quarterly basis and disseminated within three months of the end of the reference period. Currently, only data for the budgetary central government are compiled on a monthly basis and data on central government debt are compiled only on an annual basis.

  • Most data categories in the financial sector meet the SDDS coverage, periodicity, and timeliness prescriptions. The only exception is the timeliness of data on the analytical accounts of the central bank, which are disseminated four weeks after the end of the reference period, instead of the two weeks required by the SDDS.

  • In the external sector, most data categories also meet the coverage, periodicity, and timeliness requirements of the SDDS. The exceptions are the timeliness of (i) balance of payments statistics, currently six months vis-à-vis the required three months; (ii) data on official reserve assets, currently disseminated four weeks after the end of the reference month, against the one week required by the SDDS; and (iii) external debt data, currently disseminated with a lag of six months instead of the required three months. Furthermore, the CBP would need to compile the Template on International Reserves and Foreign Currency Liquidity with a monthly frequency and disseminate it not more than a month after the end of the reference period.

11. Appendix III in the accompanying document presents a more detailed description of Paraguay’s practices regarding coverage, periodicity, and timeliness of data compared to the SDDS. By developing and forcefully implementing an action plan, Paraguay should be able to meet most, if not all, of the remaining requirements for SDDS subscription within two to three years. A priority should be to advance the level of GDDS participation by updating and expanding the metadata on compilation and dissemination practices, as well as the plans for improvement, posted on the IMF’s Dissemination Standards Bulletin Board (DSBB).

II. Assessment byAgency and Dataset

12. Assessment of the quality of six macroeconomic datasets—national accounts, consumer price index, producer price index, government finance, monetary, and balance of payments statistics—were conducted using the DQAF July 2003. In this section, the results are presented at the level of the DQAF elements and 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 2ac. 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 3af.

Table 1.

Paraguay: Data Quality Assessment Framework July 2003—Summary Results

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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.

Paraguay: Assessment of Data Quality—Dimensions 0 and 1—Central Bank of Paraguay

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Table 2b.

Paraguay: Assessment of Data Quality—Dimensions 0 and 1—Ministry of Finance

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Table 2c.

Paraguay: Assessment of Data Quality—Dimensions 0 and 1—Directorate General of Statistics, Surveys, and Censuses

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Table 3a.

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

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Table 3b.

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

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Table 3c.

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

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Table 3d.

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

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Table 3e.

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

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Table 3f.

Paraguay: Assessment of Data Quality—Dimensions 2 to 5—Balance of Payments Statistics

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13. In order to complement the Fund’s assessment of the quality of official statistics produced by Paraguay, the mission conducted an informal survey of key users of macroeconomic statistics. Questionnaires were sent to a broad range of users who were asked to evaluate the coverage, periodicity, timeliness, dissemination practices, accessibility, and overall quality of the official statistics. Half of the 80 targeted users submitted responses.

14. On a five point scale (1 = poor and 5 = excellent), the average rating for the overall quality of official statistics for all sectors was 3.0. A majority of the respondents felt that the statistics were reliable, expressed satisfaction with their methodological soundness, and believed that Paraguay’s statistics were comparable to statistics disseminated by neighboring countries. Respondents also indicated that they were generally satisfied with the level of coverage and detail as well as the periodicity. However, most felt that timeliness needed to be improved and advance release calendars made public.

15. Several respondents suggested that the range of economic statistics be expanded by compiling, for example, short-term indicators of economic activity and statistics on tourism. Also, it was suggested that economic censuses be conducted on a more frequent basis, while others expressed the desirability of having more frequent data on labor statistics and a CPI with broader coverage.

16. A more detailed analysis of the Users’ Survey and the tabulated results are included in Appendix V of the accompanying document Detailed Assessments Using the Data Quality Assessment Framework (DQAF).

III. Staff’s Recommendations

Based on the review of Paraguay’s statistical practices, discussions with the data producing agencies, and responses from data users (see Appendix V of the Detailed Assessments volume), the mission presents a set of recommendations. They are designed to further increase Paraguay’s adherence to internationally accepted statistical practices and would, in the mission’s view, enhance the analytical usefulness of Paraguay’s statistics. The recommendations are subdivided into “High priority” and “Other key recommendations.” While all the high priority actions listed below should be treated as such, the cross-cutting recommendations need to be addressed with the greatest priority. More detailed technical suggestions are included in the Detailed Assessments volume for each dataset.

Cross-cutting Recommendations

High Priority

  • Give higher priority to statistical functions in the data-compiling agencies, and promote actively the adoption of a new National Statistics Law and a national statistical plan.

  • Provide adequate financial, staff, and computer resources, as well as targeted training, for statistical activities.

  • Strengthen data sources across all datasets, including through the conduct of surveys and censuses.

Other key recommendations

  • Establish regular mechanisms for enhancing intersectoral data consistency.

  • Establish regular procedures to consult with users to help identify emerging data requirements and to obtain feedback on the relevance of official statistics.

  • Adopt advance release calendars for all statistics.

  • Strengthen data revision policies and practices and make them known to the public.

  • Enhance data and metadata accessibility of all datasets, including the formats for disseminating the data.

  • Provide sector-specific contact information for all datasets.

  • Reassess the treatment of multiterritory enterprises (e.g., Itaipú and Yacyretá) in line with the ongoing discussions in the context of the 1993 SNA/BPM5 review.3

National Accounts

High Priority

  • Advance the project to compile quarterly national accounts at current and constant prices.

  • Compile a Volume Index of Industrial Production and improve the coverage and quality of volume measures for construction, commerce and service activities.

  • Conduct the programmed economic census and establish a regular program of economic surveys covering manufacture, trade, and service activities.

  • Program and conduct the special economic surveys required for updating the national accounts 1994 reference year.

  • Compile in the medium term the 1993 SNA’s institutional sector accounts.

  • Estimate the level of generated income of the informal sector and changes in its relative importance. Assess the usefulness of the annual household survey for this purpose.

  • Improve the timeliness of GDP to less that nine months, as recommended by the GDDS.

Other key recommendations

  • Compile, in the short term, an integrated economic account for the total economy and the rest of the world account, in order to meet the minimum requirements established by ISWGNA.

  • Resume the compilation of supply/use tables, discontinued in 1997

Consumer Price Index

High Priority

  • Update the CPI basket on the basis of the results from the 2005/2006 HBS.

  • Formulate a general plan for compiling a new reference base, following international standards.

Other key recommendations

  • Improve statistical techniques for the imputation of missing prices.

  • Assess CPI data sources and calculate the variance or sampling errors to guide the new CPI sample design.

Producer Price Index

High Priority

  • In the short term, update the PPI using data from the supply and use tables for the most recent year, based on the new national accounts series.

  • Formulate a general plan to expand industrial activity coverage, compiling updated weights and reference base following international standards.

  • In the future, base PPI updates on the results of a program of regular censuses and surveys.

Other key recommendations

  • Improve statistical techniques for the imputation of missing prices.

  • Assess PPI data sources and calculate the variance or sampling errors to guide the new PPI sample design.

Government Finance Statistics

High priority

  • Ensure data reporting by local governments and all nonfinancial public corporations.

  • Compile and disseminate GFS for the consolidated central government and the general government with the breakdown recommended by the international guidelines.

  • Ensure that the ISFM produces all data and detail required to compile timely GFS.

  • Establish mechanisms for assessing and monitoring response errors and misreported data in the data sources.

Other key recommendations

  • Establish a plan and timetable for adopting the GFSM 2001.

  • Prepare and disseminate metadata for GFS.

Monetary Statistics

High Priority

  • Implement the Data Integration Project, which will allow electronic transmission of data from the Bank Superintendence and Accounting Department to the Monetary Studies Division.

  • Expand the coverage of the ODC survey by including deposit-taking cooperatives.

Other key recommendations

  • Update on a regular monthly basis the time series posted in an Excel format on the CBP website.

  • Accelerate the dissemination of monetary data by posting them on the CBP website as soon as they become available, in advance of the publication of Informe Económico.

Balance of Payments Statistics

High Priority

  • Design and conduct sample surveys (based on a comprehensive business register) to capture data for items currently excluded in balance of payments statistics.

  • Review and update the statistical technique to estimate unrecorded trade. Seek advice from experts with broad experience in the calculation of unrecorded trade.

Other

  • Sign an agreement with Customs to facilitate access to freight data by carriers’ residence and related data included in SOFIA (fiscal customs database).

  • Reclassify exports and imports of the maquila sector from merchandise goods to goods for processing, and assess whether source data are in line with BPM5 guidelines for adequate classification and valuation.

  • Compile data on interest on public sector external debt on an accrual basis rather than on a due-for-payment basis, including adequate counter-entries in the financial account.

APPENDIX I

Paraguay: Practices Compared to the GDDS Coverage, Periodicity, and Timeliness of Data

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Note: Periodicity and timeliness: (D) daily; (W) weekly or with a lag of no more than one week from the reference data or the closing of the reference week; (M) monthly or with a lag of no more than one month; (Q) quarterly or with a lag of no more than one quarter; (A) annually; (N/A) not available; and (N/R) not relevant.Italics indicate encouraged categories.

National income and savings are not compiled.

Data for subsectors of central government are available, but not consolidated.

Data for local governments are not compiled.

Data for subsectors of central government are available, but not consolidated. A detailed breakdown is available only for external debt data, which are compiled on a monthly basis and disseminated two months after the end of the reference period.

Monthly information are compiled only for the central administration. The data are disseminated two months after the end of the reference period.

Data for GDP by production and expenditure approaches are available not later that nine months after the end of the reference period, but are only disseminated when data for the income approach are available.

Coverage is limited to the metropolitan area of Asuncion.

Coverage of industries is limited.

Data are compiled and disseminated in the financial report prepared by the Accounting Unit of the MOF.

The coverage excludes data of credit unions.

Dissemination as part of a high-frequency (e.g. monthly) publication.

With partial coverage. Excludes nonfinancial public sector short-term debt (not included in the DMFAS database).

Partial coverage of the nonfinancial private sector debt.

Partial coverage. Excludes goods not recorded by Customs (e.g., energy, smuggling, and shuttle trade).

1

The issues described in this paragraph do not affect the rating of dimension 0.1 (Legal and institutional environment) of National Accounts, since these are compiled by the Central Bank of Paraguay.

2

A detailed description of the SDDS can be found on the IMF’s Data Standards Bulletin Board (DSBB) on the Internet at http://www.dsbb.imf.org. A summary is presented in Appendix II of the accompanying Detailed Assessments document.

3

The BPM5 update, planned for 2008, will recommend splitting multiterritory enterprises (single enterprises with large operations in two or more territories but with unidentifiable branches) into separate units, prorated on the basis of equity shares and other factors.