Integrating the BOP in the National
Accounts
By Hazel Corbin
Eastern Caribbean Central Bank
Seminar on Developing a Programme for Implementation of
2008 SNA and Supporting Economics Statistics in CARICOM
Region
Kingston, Jamaica
January 30 to February 1, 2013
Outline of Presentation






Background
BOP Data Sources
National Accounts Tables
Compiled
Links between BOP and NA
Current Practices
Future Plans
MEMBERS OF THE ECCB
Anguilla
Antigua & Barbuda
St Vincent &
the
Dominica
Grenadines
ECCB
St Lucia
Grenada
St Kitts & Nevis
Montserrat
3
Background

BOP compilation for ECCU member countries
began in 1980’s and started as a manual exercise

TA was received from World University Services of
Canada (WUSC), the Centre from Latin American
Monetary Studies (CEMLA) and the Central Bank
of Argentina to automate the process

BOP estimates for member countries are compiled
on an annual basis with technical assistance from the
Eastern Caribbean Central Bank (ECCB)
Background



BOP Estimates are compiled in accordance with
BPM5
Plans are in place to implement BPM6, presently
receiving TA from CARTAC to review survey
forms
Conceptually the BOP accounts are closely linked
to the SNA and there is virtually complete
concordance between manuals
Categories of BOP:

The BOP is comprised of two major categories of
accounts:
I.
Current Account
II.

Capital and Financial Account
The ECCB separates the Financing because it is
easier to see for analysis purposes but Financing is
actually part of the Financial Account of the Capital
and Financial Account
6
BOP Data Sources








Surveys of establishments
ECCB Monetary Survey
Government Fiscal Data
Government Debt Statistics
Trade Statistics
Other Government Departments
Interviews
Estimation
7
Major Sources of the BOP: Surveys
1.
Accommodation
establishments
8.
Statutory bodies and public
corporations
2.
Insurance companies and
agencies
9.
Airport and Seaport authority
3.
Airlines
10. Development banks
4.
Express delivery services
11. International direct investment
enterprises
5.
Shipping agencies
12. Funding and technical
assistance agencies
6.
Oil importing companies
13. Embassies of foreign
governments
7.
Central Government
14. Charitable and non-profit
organizations
8
National Accounts Of ECCU
Member Countries

The national accounts consists mainly
of:





GDP by Economic Activity in current and
constant prices
Tables on the Expenditure of GDP in
current prices
Supply and Use Tables
Quarterly GDP Index
Other macro-economic indicators
Links between BOP and NA

BPM5 and SNA 93 and by extension, BPM6
and 2008 SNA follow similar concepts of:



Residency - both invoke the concepts of
economic territory and center of economic interest
Valuation – market price is the primary concept
for valuation
Time of Recording – the BOP and the national
accounts are constructed in principle on an accrual
basis
Links between BOP and NA



BPM6 is now fully consistent with SNA
The income account of BOP is now called the
primary account
The current transfers account is now the
secondary income account
Links between BOP and NA

The linkage of the BOP and the SNA are
reinforced by the fact that in almost all
countries the BOP data are compiled first and
subsequently incorporated into the national
accounts
Links between BOP and NA


The SNA coverage of exports of goods and
services is identical to the BOP coverage
In BOP, exports and imports of services are
disaggregated in more detail to provide data
for analysis and policy decisions- particularly
for negotiations in international trade in
services needed for international agreements
Links between BOP and NA


Flows reflected in BOP affect in some ways
the activities of the total economy
Activities relating to production, generation
and distribution of income, consumption and
accumulation could be affected by BOP
transactions
Links between BOP and NA


Apart from income flows generated domestically and
included in gross value added or GDP there are
income flows to or from the rest of the world.
These flows constitute additional sources of income:





Compensation of Employees
Property Income
Taxes on Production and Imports
Current Taxes on Income and Wealth
Other Current Transfers
Links between BOP and NA

They are included in the measurement of



Gross National Income
Gross Disposable Income
National Saving- the balancing item between Disposable
Income and final consumption
Links between BOP and NA





Expenditure on GDP
Exports of Goods and Services
Imports of Goods and Services
The Rest of the World Accounts
Gross National Income
Gross National Disposable Income
Current Account Balance is equal to
saving/investment gap for the economy
Links between BOP and NA

Rest of the World Account in SNA



Records transactions between a resident unit and the
rest of the word
In the production and generation of income accounts,
transactions are within the national economy
Difference between GDP and GNI arises because of
ROW transactions
Links between BOP and NA
Links between BOP and NA
ANTIGUA AND BARBUDA
TOTAL CONSUMPTION
General Government
Private
GROSS CAPITAL FORMATION
Transport Equipment
Other Equipment
Construction
GOODS AND SERVICES
Total Exports of Goods and Services
Exports of Goods
Exports of Services
Total Imports of Goods and Services
Imports of Goods
Imports of Services
GDP AT MARKET PRICES
Less Taxes on Products
Plus Subsidies on Products
GVA AT BASIC PRICES
2011
2,393.12
523.28
1,869.84
921.77
55.48
157.32
708.97
(278.50)
1,451.90
151.61
1,300.29
1,730.40
1,162.20
568.21
3,036.38
462.64
25.00
2,598.74
ANTIGUA AND BARBUDA
GVA AT BASIC PRICES
Taxes less Subsidies on Products
GDP AT MARKET PRICES
Net Income from Abroad
GROSS NATIONAL INCOME
Net Current Transfers from Abroad
GROSS NATIONAL DISPOSABLE INCOME
Private Final Consumption
Government Final Consumption
Total Final Consumption
GROSS NATIONAL SAVING
Gross Capital Formation
Gross National Saving
FOREIGN SAVING
2011
2,598.74
437.64
3,036.38
(119.12)
2,917.26
69.30
2,986.56
1,869.84
523.28
2,393.12
593.44
921.77
593.44
328.32
Links between BOP and NA

(1) GDP = C+I+

X-M


(2) CAB = X-M +
NPI +NCT
(3) GNDI = GDP +
NPI + NCT


(the goods & services
account)
ROW current acc/BOP
current acc)
(the primary and
secondary distribution
of income accounts)
21
Relationship between BOP and National
Accounts

GNDI= C + I + CAB

(4) S = GNDI - C



(the use of disposable
income account)
S = I + CAB
(5) CAB = S - I

current account
balance is equal to the
savings/investment gap
for an economy
22
Current Practices




SNA and BOP the value of export and import of
goods is f.o.b.
Imported goods are normally valued c.i.f, in
trade statistics, that is including freight and
insurance to bring goods to destination
An adjustment is made to derive imports at
f.o.b.
Insurance estimated at 2% and freight 10%
Current Practices


Travel credit- the largest component of Export
of Services is derived from estimates of
average daily expenditure of visitors in the
domestic market.
These estimates for some member states may
need to be revised based on data obtained from
recent visitor expenditure surveys
Current Practices



.
Workers remittances are important in ECCU and are
included in current transfers in BOP
Prior to 2004, official remittances data were obtained
from EC0/EC1 returns received from the commercial
banks
Respondents were required to provide detailed
information to the Ministry of Finance on the source
of inflows and outflows of foreign exchange
Current Practices

Capital markets in the ECCU were liberalized in September
2004 which affected the quality of official remittance data
received from commercial banks.

Current data on remittances are estimates at this time and are
compiled based on available qualitative and quantitative
information such as developments in the remittance source
countries as well as the domestic economies source of
inflows and outflows of foreign exchange
.
Current Practices

Projects in place to improve the estimation of remittances to
the ECCU

In the ECCU, the regulation and supervision of remittance
service providers is ongoing through the establishment of
Single Regulatory Units (SRUs) in each member country

These Units would be responsible for regulating other
financial institutions that do not fall under the ECCB
.
Future Plans



Complete revision of the BOP survey forms
completed in 2008
Presently receiving TA from CARTAC to
review the revised BOP survey forms
The next step is the development of the BOP
compilation software for implementation of
BPM6
Future Plans

Plans are also in place to develop IIP accounts as a
pilot project for one of the ECCU member states
during 2013
Summary and Conclusion


The BOP estimates are completely integrated in the
SNA database in the ECCU member states
The ECCB continues to provide technical assistance in
both BOP and national accounts thus ensuring
harmonization of methodology adopted
The End…
Thank You