Abstract
This report examines the Observance of Standards and Codes on the Data Module for Turkey. Progress in data quality reflects the authorities’ commitment to set statistical development on a high and sustainable path, and to address remaining challenges. A cornerstone of this effort is the more robust framework established by the new Statistics Law of Turkey of November 2005. This law assigned compilation responsibilities for a broad range of official data, including macroeconomic statistics.
Response of the Authorities
The Authorities commend the meticulous work done for the preparation of this update of the 2001 Data ROSC. The Authorities also welcome the recommendations based on the ROSC framework and mission findings. The ongoing work of the Authorities regarding the recommendations and assessments provided in the Report are presented below.
I. National Accounts
The National Accounts Group has consisted of 7 teams and 53 staff in total including two new teams which were established in February 2009. (Production Approach-10 staff-, Expenditure Approach-5 staff-, Income Approach-4 staff-, Annual Accounts (SUT)- 9 staff-, and Institutional Sector Accounts -15 staff-, Regional Accounts-5 staff- and Methodology Team-5 staff-).
A major revision of the national accounts by recommendation of the 1995 ESA was released in March 2008. This revision covers the annual and quarterly estimates by the production and expenditure approach. The revised series for GDP by income approach will be published in 2009.
Household final consumption expenditure, external trade and investment in machinery and equipment are compiled according to the Classification of Individual Consumption by Purpose (COICOP). The work on the improvement of household final consumption expenditure needs to be continued under the project on the improvement of expenditure accounts and the improvements of quarterly national accounts.
The Seasonal Adjustments Working Group has been established to study seasonal adjustment. This group had training courses on methodological and practical application of seasonal adjustment.
A draft GNI (Gross National Income) inventory (chapters 1, 3, 7 and 9) which covers explanations of source data, methodology or statistical techniques has been completed.
Businesses (especially small businesses) tend to understate their turnover and gross output and to overstate their intermediate expenditure. The impact on value added can be very significant. To calculate the impact of the misreporting of income and expenses some investigation was done. A draft misreporting questionnaire has been designed and advice from suitable professional accountants is sought. The misreporting will be calculated with the results of these studies.
Regional GDP (Gross Domestic Product) data will be estimated at NUTS 2 level in current values by mixed methods.
Studies on institutional sector accounts are carried out under the project on annual institutional sector accounts. A working group in the framework of the compilation of government sector accounts was established by TurkStat in cooperation with the Central Bank, Ministry of Finance and Undersecretariat of Treasury. The main goal of this group is to prepare tables related to the general government accounts and EDP Notification Tables. There is a close cooperation among the institutions involved and the responsibilities of each of them are defined under the Statistical Official Programme 2007-2011.
The first results of the new quarterly survey of service industries were published in December 2008 including four years data.
Studies on GNI estimation are carried out by recommendations of 1995 ESA.
II. Price Statistics —Consumer Price Index
The Authorities acknowledge that the ROSC report reflects the current situation. It was useful for the Authorities to discuss current CPI and PPI methods including new techniques and problematic areas with the experts.
A new chained CPI was calculated in 2009. In the weighting structure of this index, net sales of durable goods are used. Moreover, a component for the price of fire insurance was added to the index in order to make the compilation of the HICP more convenient. Every year, additional quality control systems and improved techniques are developed. Moreover, the new CPI covers owner-occupied housing, commodities produced by households for own consumption and expenditures on commodities obtained through in-kind payments.
The results of 2005-2006-2007 HBS are used in calculations for the 2009 CPI. The new market basket has 449 items and 845 sub-items. The previous CPI had 454 items and 851 sub-items.
III. Price Statistics —Producer Price Index
In accordance with the official statistics program of Turkey, the updated PPI will include components for export and services. The ROSC report reflects a good summary of the PPI methodology currently in use for compilation based on product aggregations for domestic sales. Development of a PPI compiled by economic activity or industry is not foreseen in the near future.
IV. Government Finance Statistics
The Authorities consider that the assessments of the ROSC add value to their ongoing work on the Government Finance Statistics (GFS) including for improving the scope of general government and completing adjustments on the use of source data for local governments and social security institutions. The recent developments on these fronts are stated below:
To fully align classification of the general government sector with GFSM 2001 and to eliminate the differences in the data coverage for the purposes of government finance statistics a “Communiqué on General Public Sector Statistics” was published in the Official Gazette on February 04, 2009.
Expenditure and revenue data of the social security institutions during 2006-2008 on a cash basis were received and the preparation of the general government sector tables that are required by EUROSTAT has commenced.
The Treasury is responsible for the compilation, monitoring and dissemination of the long term public external debt statistics, including the local government external debt. Regarding the domestic debt, the responsibility of the Treasury is limited for the central government domestic debt statistics. For the general government sector and thus the local government sub sector, the Ministry of Finance is responsible for the compilation and dissemination of the financial accounts including the debt accounts, according to the public financial management and control law.
V. Balance of Payments
Based on the ROSC framework and IMF staff recommendations, contact information, revision policy, announcements about methodological changes, and announcements about future changes were added to the CBRT’s website for the balance of payments (BOP) and the International Investment Position (IIP) statistics during the time of the IMF mission in November 2008.
As it has been indicated by the Authorities of the CBRT during the ROSC mission, data on ‘Embassies and Consulates’ included in the Current Account / Services / Government Services item which are obtained from the banks’ records have been replaced by the results of the studies carried out by using the administrative records in the BOP Statistics for October 2008. Accordingly, the study results have been revised for 2007 and January-September 2008 on December 19, 2008.
On-going and forthcoming studies of the Authorities related to the IMF’s staff recommendations divided into “High Priority” and “Other” are explained below.
High Priority
Improve the coverage of noncash disbursements for government loans and nonbank external deposit assets; the recording of bonds issued abroad held by residents, financial derivatives, and equity/debt security assets; and further develop/improve surveys on FDI (quarterly) and services.
In order to improve the recording of bonds issued abroad held by residents, financial derivatives, and equity/debt security assets ongoing studies conducted by working groups have been accelerated. Regarding the coverage of noncash disbursements for government loans, authorities from the Undersecretariat of Treasury and the CBRT started to work on the issue. Stock figures for nonbank external deposit assets are obtained from BIS and used in IIP with a time lag. On the other hand, the use of flow figures from the same source or from other sources is under consideration. As an improvement on services, “Embassies and Consulates” data obtained from administrative records have been recently included in the “Government Services” item. Also, a survey was conducted for construction services item for 2007 figures and questionnaires for 2008 will be sent to respondents shortly. After the responses are evaluated, results will be used in BOP statistics accordingly. Conducting a quarterly inward FDI survey for IIP needs allocation of more staff resources.
Extend market valuation to all tradable debt instruments, and record on an accrual basis investment income in the BOP and external debt in the IIP.
Detailed work and close cooperation with the Treasury are needed for recording on an accrual basis investment income. In this context, a working plan will be formed by the Authorities and this issue will be kept under consideration in the near future.
Compile regularly a detailed BOP/IIP reconciliation table and publish a summary reconciliation table in 2009.
Currently, the detailed BOP/IIP reconciliation table is prepared but not on a regular basis and for internal use only. It has been decided to work on monthly reconciliation tables also for internal use. Consequently, based on the results of these studies, it is planned to disseminate a summary reconciliation table on an annual basis.
Allocate more staff resources to compilation of BOP and IIP for further expanding the set of supporting surveys and implementing the upcoming BPM6 in due course.
We totally agree with this recommendation. The ongoing studies can be accomplished properly by allocating more staff resources.
Other
Disseminate quarterly IIP data (as encouraged by SDDS) and comprehensive IIP metadata.
Dissemination of quarterly IIP data mostly depends on conducting a quarterly inward FDI survey. This project is constrained by lack of enough staff resources. Comprehensive IIP metadata are prepared and will be posted in the CBRT’s internet website in coming months.
Assess regularly the consistency of BOP/IIP statistics, including with data from trading partners (DOTS) and creditors’ data (JEDH).
After the ROSC mission, it has been decided that review studies on international data sources such as trading partners (DOTS) and creditors’ data (JEDH) will be conducted once a year based on year-end figures.
VI. Monetary Statistics
Inspired by the findings of ROSC study, contact information corresponding to each data series at the Electronic Data Dissemination System on the CBRT website has been added and a separate section for Money and Banking Statistics including information on methodology, revision policy, announcements on methodological changes and revisions was prepared in mid-December 2008 in order to improve our dissemination policy for better transparency purposes.
Ongoing and forthcoming studies of the Authorities related to the IMF’s staff recommendations divided into “High Priority” and “Other” are explained below.
High Priority
Bring the timeliness of the monetary survey and the analytical accounts of the banking sector in line with the SDDS prescription. To this end, move expeditiously, in collaboration with the BRSA, to streamline the reporting system without loss of necessary detail.
CBRT:
The extensive branch banking system in Turkey does not allow banks to complete the whole Reporting Package in less than 23 business days. Besides, the Reporting Package which is also used for supervisory purposes by the BRSA contains a large number of forms closely linked with each other, entailing to report as a block. However, CBRT is planning to cooperate with the BRSA on possible solutions to improve timeliness.
BRSA:
Under Banks’ Supervisory Package, the banks report plenty of forms within 23 business days to BRSA and CBRT. All these forms are obtained in a timely manner via strong electronic control systems that assure all forms are reported without delay and checking for errors by using internal and cross controls. To ensure accuracy of the data, BRSA also implements the penalty system for the delays on the submission of the forms and the lack of/or erroneous data in the forms. Due to these precautions, banks complete reporting forms with almost no errors within this 23-day period. Especially, the trial balance form is the base form which is closely related to the other forms in the package. Therefore, the trial balance form should be reported simultaneously with other forms to BRSA and, all information in these forms should be in compliance with each other. When considering the banks’ reporting infrastructure or potential in the short period, it seems difficult to shorten the reporting lag.
Identify and report separately financial derivatives in the “sectoral accounts.”
The study on inclusion of financial derivatives in MFS is initiated without delay. A working group is analyzing how to classify related entries in Banks’ Uniform Chart of Accounts into MFS. It is planned that financial derivatives will be identified and reported separately in the sectoral accounts in 2009.
Address discrepancies in inter-bank data.
Studies will continue for inquiring and diminishing the discrepancies in interbank data which arise from time difference and some misclassifications in banks’ report.
Other
Identify separately the MMFs that issue “Type B Liquid Funds” in the “Institutional Sector List” to facilitate appropriate classification by reporters.
We totally agree with the recommendation. MMFs that issue “Type B Liquid Funds” will be separately identified in the “Institutional Sector List” in 2009.
Adhere more closely to the terminology in the MFSM, particularly to describe financial instruments, and explain in footnotes any deviations, when warranted.
A study to improve sectoral and financial instrument breakdown in the disseminated data in a format and terminology closer to the MFSM will also be initiated in 2009.