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IMF Country Report No. 19/18

ARGENTINA

TECHNICAL ASSISTANCE REPORT—REPORT OF THE TECHNICAL ASSISTANCE MISSION ON EXTERNAL SECTOR STATISTICS—APRIL 17–28, 2017

January 2019

This Technical Assistance report on Argentina was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed on July 2017.

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ARGENTINA

Report of the Technical Assistance Mission on External Sector Statistics

(April 17–28, 2017)

Prepared by Eduardo Rodríguez Tenés

July 2017

The contents of this report constitute technical advice provided by the staff of the International Monetary Fund (IMF) to the authorities of Argentina (the “TA recipient”) in response to their request for technical assistance. This report (in whole or in part) or summaries thereof may be disclosed by the IMF to IMF Executive Directors and members of their staff, as well as to other agencies or instrumentalities of the TA recipient, and upon their request, to World Bank staff and other technical assistance providers and donors with legitimate interest, unless the TA recipient specifically objects to such disclosure (see Operational Guidelines for the Dissemination of Technical Assistance Information http://www.imf.org/external/np/pp/eng/2009/040609.pdf). Disclosure of this report (in whole or in part) or summaries thereof to parties outside the IMF other than agencies or instrumentalities of the TA recipient, World Bank staff, other technical assistance providers and donors with legitimate interest shall require the explicit consent of the TA recipient and the IMF Statistics Department.

Contents

• Acronyms

• Executive Summary

• I. Introduction

• II. Progress, Pending Issues, and Recommendations Concerning the Compilation of ESS

  • A. Current Account and Capital Account

  • B. Financial Account and IIP

• III. Dissemination of ESS and Other Aspects of ESS Preparation in Argentina

• Appendices

• I. Action Plan from the November 2016 Mission with Implementation Status

• II. Participants in Mission Meetings

• III. Summary of Current and Capital Accounts under MBP5 and MBP6 Methodologies

• IV. Agreement Between the BCRA and the INDEC on the Exchange of Information and Release of Debt and DI Survey Data

• V. Quarterly Direct Investment Transactions and Holdings Reporting Form

• VI. Form for Use in Reporting Information on Reserve Transactions

• VII. International Investment Position for 2006–2016 Using the BPM6 Methodology

Acronyms

Executive Summary

At the request of the National Statistics and Census Institute (INDEC), a technical assistance mission on external sector statistics (ESS) visited Buenos Aires during April 17–28, 2017. This was a follow up to the November 2016 mission that evaluated the ESS methodology, information sources, and dissemination policy and made recommendations to improve quality, adapt the production of ESS to the methodology provided by the Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6), and support the quarterly compilation and dissemination of the International Investment Position (IIP) in accordance with the Special Data Dissemination Standards (SDDS).

The mission reviewed the implementation status of the tasks identified in the action plan prepared by the November 2016 mission; assisted compilers in preparing quarterly ESS in accordance with BPM6 guidelines for the next quarterly publication; and provided practical advice on the methodology to be used.

The first benchmark action of the action plan, “establish an effective procedure for exchange of information and reconciliation of data on the exchange balance and debt and direct investment surveys with the Central Bank of Argentina (BCRA),” was completed. The BCRA has been providing the INDEC National Directorate of International Accounts (DNCI) with detailed information on transactions in the unified foreign exchange market (MULC) and surveys of private sector external debt and direct investment. The two entities have begun comparing statistics to be released from July 2017 onward. The mission and the compilers held a meeting with the BCRA and agreed on a schedule for reconciliation of data compiled and the release and revision of statistics. The schedule will also provide, beginning in the fall of 2017 with respect to 2016 data, for transmittal to the IMF Statistics Department (STA) of Argentina’s contribution to the Coordinated Direct Investment Survey (CDIS) consistent with the IIP data. The BCRA confirmed the revision of external private debt and direct investment (DI) surveys in order to adapt them to the BPM6 methodology, and announced that it would begin collecting quarterly DI data in early 2018, starting with data for December 2017.

The second benchmark action, “compile the 2010–2016 balance of payments financial account and quarterly IIP according to the BPM6 methodology, based on current information sources,” was also completed. The mission reviewed the results obtained, the principal modifications to the current and capital accounts, the classification of transactions and financial asset and liability positions, and the consistency of quarterly balance of payment transactions with the corresponding IIP balances. In July 2017, the DNCI plans to publish the quarterly series of balance of payments data adapted to the BPM6 methodology for 2006–2016 and first quarter 2017. During the first half of July 2017 it will disseminate annual IIP data for 2006–2015 and quarterly data for 2016 and first quarter 2017. Beginning in September 2017, both sets of statistics will be disseminated simultaneously on a quarterly basis with a maximum lag of 90 days, as prescribed by the SDDS.

The compilers had made progress on the third benchmark action, “update the information used to compile estimates of external assets of the nonfinancial private sector” (June 2017). In early April, the federal tax administration (AFIP) released the results of the tax amnesty program (sinceramiento fiscal), which identified US$93.3 billion in undeclared foreign assets. The current estimated value of resident private sector deposits and real property held abroad is slightly higher than indicated by the tax data, although it is within the same range. For holdings of foreign banknotes, the amount indicated in the IIP is far higher than the amount declared to the AFIP, as was assumed prior to learning the results of the tax amnesty. For investments, an interpretation of the amounts declared to the AFIP and comparison with ESS estimates would require greater detail than was provided by the AFIP. The mission and the compilers met with the AFIP to explore the possibility of obtaining additional details. While the data relating to the tax amnesty process is extremely confidential, the AFIP offered to provide the INDEC with detailed information on foreign assets declared on regular tax returns, which were required to include disclosures of previously unreported assets beginning in December 2016. That information will be available in June 2017.

In accordance with the November 2016 mission recommendations, the DNCI has begun to expand training for officials, focusing on IT tools to facilitate the use of large databases. It has also increased the number of directorate staff by one, another staff member is in the process of being hired, and a data processing expert has been hired under a temporary contract. Personnel training has continued to expand through the use of internal and external training courses.

The action plan presented below identified the most important actions required to produce quarterly ESS in accordance with the BPM6 and to improve data quality. Three benchmark actions were agreed to evaluate future progress with respect to ESS: (1) disseminate quarterly balance of payments data (2006–2016 and first quarter 2017) and quarterly IIP data (2016 and first quarter 2017) in July and August 2017, respectively, adapted to the BPM6 methodology; (2) maintain consistency between the ESS and the private sector debt and DI data disseminated by the BCRA; and (3) obtain data from the AFIP on foreign investment by resident corporations and individuals at the highest available level of detail (July 2017).

The mission would like to thank the INDEC staff for their cooperation and hospitality.

Action Plan

The mission agreed with the authorities on a work plan to implement the recommendations described in this report. The action plan, presented below, serves as a work plan detailing the main actions to be implemented; the associated performance indicators and timeframes; and external factors that could impact implementation of the actions. Appendix I to this report presents the action plan prepared by the November 2016 mission and indicates the implementation status of the proposed actions.

Priority: A = High; M = Medium

Section	Priority	Activities	Quantifiable performance indicators	Timeframe	Comments/ External factors
II	A	Disseminate quarterly balance of payments data (2006–2017 and first quarter 2017) and quarterly IIP data (2016 and first quarter 2017) in accordance with the BPM6 methodology (benchmark action).	Quarterly data are disseminated.	July 2017 (balance of payments) August 2017 (IIP)	The INDEC statistics release schedule provides for this.
II	A	Maintain consistency between private sector debt and direct investment (DI) data released by the BCRA and the ESS (benchmark action).	The statistics released by the two entities are consistent.	Ongoing	A schedule was agreed during the mission for the exchange, dissemination, and revision of data.
II	A	Obtain the most detailed data available from the AFIP on foreign investment by resident corporations and individuals (benchmark action).	The amounts reported by the AFAIP are compared with the ESS and the estimates are revised if necessary.	August 2017	Action plan by the November 2016 mission, reformulated.
II	M	Include passenger sea and land transport companies in the survey of transport companies.	The companies are included in the external sector survey conducted by the National Directorate of External Sector Statistics (DNSE).	December 2017	The DNSE has prepared a form for this purpose and will conduct a pilot survey.
II	A	Include information on travel income and expenditure, calculated under the new procedure for allocation of International Tourism Survey (ETI) expenditure, chaining the historical series.	The balance of payments includes the new estimates.	June 2017	The entire 2006–2016 balance of payments series will have to be revised.
II	A	Establish a quarterly procedure to obtain DI data as part of the BCRA survey.	A quarterly survey of data is available for the largest companies.	December 2017	The BCRA confirmed that it planned to compile quarterly DI information starting with December 2017 data.
II	A	In cooperation with the BCRA, begin defining a new procedure for compiling information on foreign assets and liabilities of the private sector to replace the current surveys of private debt, DI, and the MULC in the medium term.		December 2017	This is a strategic medium-term action that will require close cooperation between the INDEC and the BCRA but should be started as soon as possible.
II	A	Include information on foreign assets of insurance companies (including technical reserves) and mutual funds in the ESS separately from those of the remaining other resident sectors (ORSs).	The ESS include this information.	June 2017	The DNCI has this information.
II	M	Identify the financial liabilities (loans) of other financial corporations (OFCs) once the changes being readied by the BCRA have been implemented, to adapt the debt survey to the BPM6 methodology. (December 2017).	The foreign liabilities of ORSs identify those of OFCs	December 2017	The BCRA has begun adapting the debt survey to the BPM6.
II	A	Finish the process of reconciling DI data (including rents) with the BCRA so that the contribution to the CDIS, the balance of payments, and the IIP are consistent beginning with December 2016 data.	The DI data included in the ESS are consistent with the contribution to the CDIS.	July 20177	The INDEC and the BCRA have begun the reconciliation process, which should be completed in July 2017.
II	A	In cooperation with the BCRA and information users, study the possibility of using and disseminating alternative estimates of the stock of DI liabilities that consider the change in price of the companies’ assets and the capitalization of DI companies listed on the stock exchange.		December 2017
II	M	Identify loans by nonresident DI companies to their resident direct investors in the BCRA debt survey and any loans by the largest resident DI companies to their nonresident direct investors.	Separate information for those loans is available.	December 2017	The BCRA confirmed that it will include the necessary details in the revision of the private external debt and DI survey.
II	M	Classify transactions between residents and nonresidents involving the purchase or sale of securities issued by Argentine residents in the foreign liabilities of the securities issuing sector (June 2017).	The transactions are correctly classified in the IIP.	June 2017	The information required for the reclassification is available.
II	M	Investigate potential information on financial derivatives transactions with nonresidents in the accounting data of other deposit-taking corporations (DTCs) (available from the BCRA) and the Rosario derivatives market.	Any relevant transactions in financial derivatives are identified.	June 2017	Subject to availability of information.
II	M	Continue discussions with the DNSE on the possible inclusion of information to obtain average import and export collection and payment times.	The possibility of collecting this information is being studied in the context of developing surveys of goods and services importers and exporters.	December 2017	Requires budget appropriation.
II	M	In the balance of payments information provided by the BCRA, include data on reserve transactions, broken down by instrument in a manner consistent with the IIP.	The reserves data in the balance of payments are consistent with the IIP.	June 2017	During the mission, the BCRA agreed to provide the necessary information.
III	A	Redefine the ESS revision policy to adapt it to information sources and procedures to be incorporated.	A new ESS revision policy is in place.	June 2017
III	A	Strengthen personnel training in the management of complex databases.		December 2017	This is an ongoing process for which work has already begun.
III	A	Prepare and disseminate ESS metadata including the changes introduced in the adaptation of ESS to the BPM6.	The new metadata are being released on the INDEC website.	July 2017

Priority: A = High; M = Medium

View Table

Section	Priority	Activities	Quantifiable performance indicators	Timeframe	Comments/ External factors
II	A	Disseminate quarterly balance of payments data (2006–2017 and first quarter 2017) and quarterly IIP data (2016 and first quarter 2017) in accordance with the BPM6 methodology (benchmark action).	Quarterly data are disseminated.	July 2017 (balance of payments) August 2017 (IIP)	The INDEC statistics release schedule provides for this.
II	A	Maintain consistency between private sector debt and direct investment (DI) data released by the BCRA and the ESS (benchmark action).	The statistics released by the two entities are consistent.	Ongoing	A schedule was agreed during the mission for the exchange, dissemination, and revision of data.
II	A	Obtain the most detailed data available from the AFIP on foreign investment by resident corporations and individuals (benchmark action).	The amounts reported by the AFAIP are compared with the ESS and the estimates are revised if necessary.	August 2017	Action plan by the November 2016 mission, reformulated.
II	M	Include passenger sea and land transport companies in the survey of transport companies.	The companies are included in the external sector survey conducted by the National Directorate of External Sector Statistics (DNSE).	December 2017	The DNSE has prepared a form for this purpose and will conduct a pilot survey.
II	A	Include information on travel income and expenditure, calculated under the new procedure for allocation of International Tourism Survey (ETI) expenditure, chaining the historical series.	The balance of payments includes the new estimates.	June 2017	The entire 2006–2016 balance of payments series will have to be revised.
II	A	Establish a quarterly procedure to obtain DI data as part of the BCRA survey.	A quarterly survey of data is available for the largest companies.	December 2017	The BCRA confirmed that it planned to compile quarterly DI information starting with December 2017 data.
II	A	In cooperation with the BCRA, begin defining a new procedure for compiling information on foreign assets and liabilities of the private sector to replace the current surveys of private debt, DI, and the MULC in the medium term.		December 2017	This is a strategic medium-term action that will require close cooperation between the INDEC and the BCRA but should be started as soon as possible.
II	A	Include information on foreign assets of insurance companies (including technical reserves) and mutual funds in the ESS separately from those of the remaining other resident sectors (ORSs).	The ESS include this information.	June 2017	The DNCI has this information.
II	M	Identify the financial liabilities (loans) of other financial corporations (OFCs) once the changes being readied by the BCRA have been implemented, to adapt the debt survey to the BPM6 methodology. (December 2017).	The foreign liabilities of ORSs identify those of OFCs	December 2017	The BCRA has begun adapting the debt survey to the BPM6.
II	A	Finish the process of reconciling DI data (including rents) with the BCRA so that the contribution to the CDIS, the balance of payments, and the IIP are consistent beginning with December 2016 data.	The DI data included in the ESS are consistent with the contribution to the CDIS.	July 20177	The INDEC and the BCRA have begun the reconciliation process, which should be completed in July 2017.
II	A	In cooperation with the BCRA and information users, study the possibility of using and disseminating alternative estimates of the stock of DI liabilities that consider the change in price of the companies’ assets and the capitalization of DI companies listed on the stock exchange.		December 2017
II	M	Identify loans by nonresident DI companies to their resident direct investors in the BCRA debt survey and any loans by the largest resident DI companies to their nonresident direct investors.	Separate information for those loans is available.	December 2017	The BCRA confirmed that it will include the necessary details in the revision of the private external debt and DI survey.
II	M	Classify transactions between residents and nonresidents involving the purchase or sale of securities issued by Argentine residents in the foreign liabilities of the securities issuing sector (June 2017).	The transactions are correctly classified in the IIP.	June 2017	The information required for the reclassification is available.
II	M	Investigate potential information on financial derivatives transactions with nonresidents in the accounting data of other deposit-taking corporations (DTCs) (available from the BCRA) and the Rosario derivatives market.	Any relevant transactions in financial derivatives are identified.	June 2017	Subject to availability of information.
II	M	Continue discussions with the DNSE on the possible inclusion of information to obtain average import and export collection and payment times.	The possibility of collecting this information is being studied in the context of developing surveys of goods and services importers and exporters.	December 2017	Requires budget appropriation.
II	M	In the balance of payments information provided by the BCRA, include data on reserve transactions, broken down by instrument in a manner consistent with the IIP.	The reserves data in the balance of payments are consistent with the IIP.	June 2017	During the mission, the BCRA agreed to provide the necessary information.
III	A	Redefine the ESS revision policy to adapt it to information sources and procedures to be incorporated.	A new ESS revision policy is in place.	June 2017
III	A	Strengthen personnel training in the management of complex databases.		December 2017	This is an ongoing process for which work has already begun.
III	A	Prepare and disseminate ESS metadata including the changes introduced in the adaptation of ESS to the BPM6.	The new metadata are being released on the INDEC website.	July 2017

Priority: A = High; M = Medium