GENERAL GOVENMENT SECTOR OF THE REPUBLIC OF ARMENIA Workshop on implementation of the 2008 SNA in EECCA countries and linkages with BPM6 and GFSM 2014 May 6-8, 2015, Istanbul, Turkey May 6-8, 2015, Istanbul, Turkey ՀԱՅԱՍՏԱՆԻ ՀԱՆՐԱՊԵՏՈՒԹՅԱՆ ԱԶԳԱՅԻՆ ՎԻՃԱԿԱԳՐԱԿԱՆ ԾԱՌԱՅՈՒԹՅՈՒՆ NATIONAL STATISTICAL SERVICE OF THE REPUBLIC OF ARMENIA

Structure of Presentation  Institutional structure: current state  Characteristics of main sources of information  Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014  Questions 2

Accounts of the General Government sector are compiled annually according to methodology of the 1993 SNA and GFS 2001: −Economic classification (by types of expenditures) −Functional classification (by types of economic activity) The General Government sector covers all public institutions and non-profit organizations (NPO) Transactions are recorded according to the cash-basis method; an accrual method is not applied yet. 3 Institutional Structure: Current State

4 The General Government sector combines institutional units which fulfill functions of the General Government as a primary activity, i.e. a provision of society with goods and services on non-market basis for their shared or individual use and redistribution of incomes through transfers. According to the level of regulatory authorities, the General Government sector includes: Central authorities: −all government subdivisions which exercise authority throughout economic area of the country. −administration of 10 regions (marzs) which do not have budgetary autonomy −extra-budgetary funds (pension fund), resources and their use are also included in the central government. Local government authorities Institutional Structure; Current State

5 General information is submitted by the Ministry of Finance (administrative register) as per: − Law on State Statistics of the Republic of Armenia −Law on Three-Year Statistical Work Program of the Republic of Armenia −Decision of the State Council on Statistics of the Republic of Armenia on the Procedure of the reporting of Statistical Information No.11 dated October 03, 2003 −Annual State Statistical Work Program Characteristics of Main Sources of Information

6 National accounts use consolidated data from quarterly and annual reports on implementation of the state and local authority budgets (GFS 2001): −Quarterly figures are presented in aggregated form −Annual figures contain data on expenditures per each functional section Additional sources: −Balance of Payment (BPM5, BPM6) −Report on key figures of business activities of the organizations −Report on financing of expenditures for maintenance of the State Social Security Service (Pension Fund) “National Accounts of Armenia” yearbook is published annualy. It contains a section of the general government sector (consolidated accounts, production account and generation of income account) by types of economic activity.

7 Characteristics of Main Sources of Information Government agencies are non-market producers Assessment of non-market output – an amount of current expenditures: −intermediate consumption −compensation of employees −other taxes on production (less other production subsidies) −consumption of fixed capital Intermediate consumption – cost of goods and services consumed within the accounting period.

8 Characteristics of Main Sources of Information Final consumption expenditures: −Individual consumption (healthcare, education, culture, social protection) −Collective consumption (protection of public order and environment, defense and security, management of the economy) Final consumption expenditures are determined by: −output of non-market services −plus expenses for purchase of consumer goods and services for transfer to the households Gross capital formation: −acquisition of equipment and valuables −capital construction −capital repairs −capital transfers

9 Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014 To improve statistics of the public administration sector within the context of implementation of 2008 SNA and GFSM 2014: −The arrangements have been performed −Recommendations obtained from the CIS Statistical Committee on an alignment of indicators of the government finance statistics (GFS2014) and the system of national accounts by a transient key method are considered −An implementation of model statistical classification of economic sectors recommended by the Eurasian Economic Commission is considered and performed −Trilateral interdepartmental agreement has been concluded between the National Statistical Service, Ministry of Finance and Central Bank of the Republic of Armenia for implementation of 2008 SNA new international standard into the statistics of national accounts ( ).

10 The Commission and interdepartmental working groups consisting of employees from NSS, MoF, CB, law enforcement authorities and State Committee on Property and Cadastre have been established. They develop the national strategic program on implementation of the 2008 SNA and GFS 2014 for next years, taking into account own resources and opportunities of international cooperation, and coordinate a process for implementation of this program: −Financial and insurance activities −General Government (expenditures for armaments and research and development) −External accounts −Non-observed economy Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014

11 −Imputed cost of living in owner-occupied dwelling-houses −Structure of non-financial assets −Input-output tables −Financial account Working groups develop new methodological documentation with indication of necessary sources of information, perform experimental computations to determine the changes affecting GDP. Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014

12 −Which sections of functional classification form an output of products in “Public Administration and Defense; Compulsory Social Security” branch (section O, NACE rev. 2) −Reserve fund of the government and local authorities (section 11 - Reserve funds, unrelated to main sections) −Lack of information on expenditures (by economic classification) by types of economic activity in local authority budgets. −Which items of operating expenditures of economic classification of the budget can form an output of non-market services in branches (for example: grants, subsidies) −Lack of data on depreciation charges in budget expenditures, what are the approximate limits of consumption of fixed capital (in % to output of products) Questions

13 −Whether a requirement on recording of all expenditures and revenues of the state budget in accounts of the public administration sector is mandatory as well as a resulted correspondence of an indicator of state budget deficit to an indicator of net lending / borrowing in national accounts in the public administration sector −Source of information on market services in “Public Administration and Defense; Compulsory Social Security” (section O, NACE rev.2), delimitation between payment for rendered services and tax collection −Implementation of the 2008 SNA is possible without implementation of GFSM Balance of payment is already compiled with accordance with the new version BPM6 −Implementation of accrual method when recording the transactions Questions

THANK YOU FOR YOUR ATTENTION Web page: NSSRA Web page: NSSRA Workshop on implementation of the 2008 SNA in EECCA countries and linkages with BPM6 and GFSM 2014 May 6-8, 2015, Istanbul, Turkey May 6-8, 2015, Istanbul, Turkey ՀԱՅԱՍՏԱՆԻ ԱԶԳԱՅԻՆ ՎԻՃԱԿԱԳՐԱԿԱՆ ԾԱՌԱՅՈՒԹՅՈՒՆ NATIONAL STATISTICAL SERVICE OF THE REPUBLIC OF ARMENIA