1. Government Finance Statistics - A Global Perspective Session 2, Friday June 13
Claudia Dziobek, Division Chief, IMF
Eurostat Conference, The Accounts of Society, Luxembourg, June 12-13, 2014

2. “The global crisis demands bold initiatives to rescue the financial sector and boost aggregate demand. ... Since monetary policy is at the end of its rope, early, strong, and carefully thought-out fiscal policies are urgently needed. Time and action are of the essence if we are to avoid a contraction larger than any we’ve seen since the 1930s”
IMF Economic Counselor, Blog 2009

3. With the recent financial and economic crisis, demand for more timely, more comprehensive and comparable fiscal data has increased dramatically.
The global nature of the crisis and globally coordinated responses put the spotlight on data comparability.
This presentation documents the dramatic increase in demand for government finance statistics, some
bold responses by statisticians, and key challenges ahead.

4. Dramatic Increase in Demand for Fiscal Data: Some Examples
IMF’s Fiscal Monitor established in 2009
Debt Sustainability Analysis (DSA) modernized 2011
Debt Management Guidelines updated in 2014
Europe: “Six Pack” Council Directive /85/EU adopted in 2011
Africa: regional fiscal data harmonization s (EAC, WAEMU)

5. Fiscal Monitor Launched in 2009
Analysis of public finance developments
Update of fiscal implications of the crisis
Medium-term fiscal projections
Assessment of sustainable public finances
Published twice a year by the IMF
… presents a wealth of fiscal data and analysis and covers some statistical issues (e.g. SNA2008, pension obligations, fiscal data revisions during the crisis; public debt, nonfinancial assets.)
…challenges statisticians to provide more and timely fiscal data.

6. Central Government Gross Debt (% GDP)
Debt Sustainability Analysis for Market-Access Countries Modernized in 2011
D ++
Central Government Gross Debt (% GDP)
“Modernizing the framework for fiscal policy and public debt sustainability analysis (DSA) has become necessary, particularly in light of the recent crisis and rising sustainability concerns in some advanced economies. …”
‘Level of scrutiny’ trigger:
Is public debt over % of GDP?
Post crisis debt

7. Debt Sustainability Analysis (cont)
In 2011, the IMF adopted a risk-based approach to DSAs for all market-access countries
Data coverage to be based on internationally recognized statistical methodology
High risk state-run enterprises to be assessed
Gross and net debt may be assessed
Health and pension related issues to be addressed
Contingent liability module added

8. IMF Debt Management Guidelines Updated in 2014
Designed to assist policymakers to strengthen the quality of public debt management and reduce their country’s vulnerability to domestic and external shocks.
Institutional and instrument coverage to be specified
High priority: accurate debt recording and reporting systems
“This is required … for producing debt data and ensuring timely payment of debt service, … for improving the quality of budgetary reporting and the transparency of government financial accounts.”
“The management information system should capture all relevant cash flows, and should be fully integrated into the government's accounting system.”

9. EU “Six Pack” Raises the Bar for Fiscal Data
Council Directive 2011/85/EU on requirements for budgetary frameworks of the Member States  is part of the Enhanced Economic Governance package (so-called "six pack“ adopted by the European Parliament and Council in
Accounting system to be suitable for ESA general government data
Public availability of datasets that are highly relevant for fiscal monitoring
timely high-frequency data for all general government subsectors
bridge table between public accounts and ESA data
data on contingent liabilities and other indicators having potential impact on the fiscal stance  (guarantees, debt of public corporations, PPPs, pensions, nonperforming loans).

10. Africa: Fiscal Data Harmonization Efforts
West African Monetary Union (WAEMU)
In 2009, common fiscal reporting format including balance sheet based on GFSM 2001 was adopted
Full implementation starting 2017
Donor support and regional government finance statistics advisor since 2007
East African Monetary Union project (EAMU)
Convergence criteria
fiscal deficit and gross public debt
based on the GFSM 2001/2014 methodology
high-frequency and annual GFS data by 2017
Donor support and government finance statistics advisors in the region since 2014

11. Responses to Increased Data Demand Steps to Strengthen Fiscal Data
IMF Staff Reports: internationally comparable fiscal tables (GFSM)
G-20 Data Gaps Initiative launched in 2009
Statistical Manuals updated (GFSM 2014)
Government Finance Statistics Advisory Committee created
International Public Sector Accounting (IPSASB) – cooperation intensified
Fiscal Transparency Code and Assessments upgraded 2013
Research and Communication to explain statistical concepts, motivate reporting

12. IMF Staff Reports Good progress …
Over time, all IMF staff reports are to present fiscal tables in globally comparable format (Government Finance Statistics Manual, GFSM).
IMF Executive Board decisions (2010, 2013)
Staff Reports Including a GFSM Presentation of Fiscal Data

13. IMF Staff Reports reflect countries’ limited capacity
Countries Reporting Data on Government Balance Sheets 8 12 24 13 23 29 25 16 18 10 20 30 40 50 60 70
2004 GFSY
2008 GFSY
2013 GFSY
Full balance sheet
Financial balance sheet
Liabilities only 46 51 71
Source: Government Finance Statistics Yearbook (GFSY)

14. G-20 Data Gaps Initiative
The G-20’s Working Group on Reinforcing International Co- operation and Promoting Integrity in Financial Markets asked the IMF and the Financial Stability Board (FSB) Secretariat to explore information gaps and provide appropriate proposals for strengthening data collection
IMF and the FSB Secretariat presented a report in November with 20 recommendations to close information gaps in the areas of:
Risk in Financial Sector
Cross Border Financial Linkages
Vulnerability
Communication of Official Statistics: Principal Global Indicators (PGI) created

15. G-20 Data Gaps Initiative Government Finance Statistics
Recommendation 17. “The IMF to promote timely and cross-country standardized and comparable government finance data based on the accepted international standard, the Government Finance Statistics Manual 2001 (GFSM 2001).
Template for Best Practices on the PGI website:
Quarterly General Government, Integrated Stocks and Flows
Dissemination on a timely basis with appropriate detail.
Recommendation 18. “The World Bank, in coordination with the IMF, and consulting with the Inter-Agency Task Force on Finance Statistics (TFFS), to launch the public sector debt database in 2010.”
CHART

16. G20 Data Gaps Initiative PSDS Created in 2010
Quarterly Public Sector Debt Statistics Online Database (QPSDS
Currently over 70 countries report quarterly gross debt, promoting consistent data across international organizations based on Public Sector Debt Statistics methodology
Can be accessed at

17. Methodological Manuals have been updated
Government Finance Statistics Manual 2014
Comprehensive set of integrated accounts
Harmonized with SNA 2008 and ESA 2010
Supporting Manuals
Public Sector Debt Statistics: Guide for Compilers and Users (2011)
Developing Country Guide (2011)
Quarterly Guide for Government Finance Statistics (2013)

18. Government Finance Statistics Advisory Committee (GFSAC)
GFSAC created in 2009 for global consultation on update of GFSM in line with 2008 SNA
Two meetings held in Washington
GFSAC with broader mandate to advise on development of government finance statistics to be launched by the IMF in 2015 (membership by invitation)

19. Methodological guidance is well developed and globally comparable

20. Government Finance Statistics and IPSASB
Accounting data - key source of government finance statistics
Harmonization with internationally recognized accounting standards intensified since the crisis.
IMF represented in International Public Sector Accounting Standards Board (IPSASB)
IPSASB represented in GFS Advisory Committee
Partnership resulted in:
GFSM 2014, Appendix 6
IPSASB Consultation Paper, IPSASs and
Government Finance Statistics Reporting Guidelines

21. Updated Fiscal Transparency Code (2013)
Update reflects lessons of the crisis and greater emphasis on statistical methodology:
broader institutional coverage of fiscal reports,
more comprehensive information about government balance sheets,
more frequent and timely fiscal reporting,
better analysis of fiscal risks,
sub-national entities and public corporations,
improved consistency between fiscal forecasts, in-year fiscal reporting, and year-end fiscal data.
Six country assessments have been conducted jointly by the Fiscal Affairs and Statistics Departments under the new framework

22. Research to Explain Statistical Concepts ‘What Lies Beneath: The Statistical Definition of Public Sector Debt’

23. Research … to Showcase Stock Flow Adjustments
A Complete View:
Includes “Other Economic Flows”
A Partial View:
Gross Debt minus Deficit
Discrepancies are significantly lower where stock-flow residual is correctly measured!

24. Government and Other Sectors of the Economy
Research … Institutional Structure of Government Starting with the National Accounts Sectors
Government and Other Sectors of the Economy
General Government Sector (GL3)
Nonfinancial Corporations Sector
Financial Corporations Sector
Households Sector
Nonprofit Institutions Serving Households Sector

25. GL3 – General Government
GL2 – Central Government
State Government: States and provinces
GL1 – Budgetary Central Government: Judiciary, legislature, ministries, presidency, and government agencies.
Extra-budgetary units/accounts
Local Government: Municipalities
Social Security Funds1:
National social security
1 In some countries, social security funds are not part of the central government in terms of legal arrangements. However for comparability in the Government Finance Statistics Yearbook they are included outside GL1 and inside GL2.

26. Research: Fiscal policy analysis is often limited to budget data for developing countries
Budgetary Expense as a Percentage of General Government Expense
(Unconsolidated 2012)

27. Research: The Significance of Extrabudgetary Units in Central Government
The Number of Extrabudgetary Units for Selected Countries
Note:
these are not included in Budgetary Fiscal data

28. Research: Even central government data are only a partial view of government
Central Government Expense as a Percentage of General Government Expense
(Unconsolidated 2012)

29. General Government Assets and Liabilities
Research: The Role of Nonfinancial Assets in Debt and Deficit Management
General Government Assets and Liabilities
(Percent of GDP)
We found:
1. As governments face tight fiscal conditions, attention turns to their holdings of NFAs – Can they be sold to reduce debt? Can they be better managed? What is international practice?
2. To address those policy concerns, the Fund recently produced a paper of international comparisons of governments’ NFA holdings.
3. This was a hot enough issue to inspire a front page story in the Economist – “The 9 Trillion Dollar Sell-off.”
4. The paper had to cobble together data from different sources, and identified a wide range of gaps and variation in methods. If governments aren’t even measuring their NFAs, it suggests they may not yet be properly managing those assets.

30. Some Success in Motivating Countries to Report to the IMF’s Global Database
Number of Countries Reporting Data for the GFSY (in GFSM format)
Source: Government Finance Statistics Yearbook GFSY)

31. Additional Information for Assessing Fiscal Vulnerabilities and Risk
Moving Beyond General Government A next horizon in public finance statistics
GFSM and Fiscal Transparency Code Place more emphasis on Public Sector – but data are not available for many countries
General Government Sector
Nonfinancial Corporations Sector
Financial Corporations Sector
Households Sector
Nonprofit Institutions Serving Households Sector
Public Sector
Private
Additional Information for Assessing Fiscal Vulnerabilities and Risk

32. Conclusions and What’s Next ?
Surge in demand for fiscal data – will not go away.
Global statistical community has taken major steps to address fiscal data requirements since the financial crisis.
Methodological frameworks are in place.
Globally comparable, timely, and accessible data are lagging:
Quarterly general government data (released within a quarter)
Balance sheet data: full instrument/institutional coverage of debt and assets
Source data: Linking budget data with government finance statistics
Data on pension, health, and other functions of government
Further down the road: Data on the public sector

33. What Next ?
Focus on dissemination of government finance statistics, especially general government
Persuade all countries to invest in government finance statistics and produce comprehensive, timely, internationally comparable fiscal data
Continue to foster link between fiscal policy and data dissemination
Continue to develop link between accounting and statistics
Government Finance Statistics Advisory Committee for global initiatives