The Policy Relevance of the
Government Finance Statistics
Methodology
Workshop on the Implementation and Links between the System of National Accounts, 2008
and the Government Finance Statistics Manual
November 20–22, 2013 in Istanbul, Turkey
Gary Jones
Government Finance Division
Statistics Department
DISCLAIMER: This presentation represents the views of the authors and does not necessarily represent IMF views or IMF policy.
The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management.
Government Finance Statistics Manual
1986 vs 2001/13
Classification Structure
GFSM 1986
• Based on analytic framework
–
–
–
–
–
–
Inflow / outflow of cash
Repayable / nonrepayable
Requited / unrequited
Current / capital
Financial assets / liabilities
Public policy / liquidity
management
– Outstanding debt
GFSM 2001
• Based on analytic framework
– Transactions that change net worth
• Revenue
• Expense
– Transactions in assets and liabilities
– Other economic flows
– Balance sheet
Government Finance Division, IMF
Statistics Department
2
STOCKS
OPENING
BALANCE
SHEET
FLOWS
TRANSACTIONS
Revenue
minus
Expense
NET WORTH
STOCKS
= NET OPERATING
BALANCE
OTHER ECONOMIC
FLOWS
Holding Gains
and Losses
CLOSING
BALANCE
SHEET
Other Changes in
Volume of Assets
CHANGE IN NET
WORTH (OVC)
NET WORTH
Nonfinancial
Assets
Nonfinancial
Assets
Nonfinancial
Assets
Financial
Assets
Financial
Assets
Financial
Assets
Liabilities
Liabilities
Liabilities
CHANGE IN NET
WORTH (HG)
minus
Nonfinancial
Assets
Nonfinancial
Assets
= NET LENDING /
BORROWING
Financial
Assets
Financial
Assets
• cash
• other financial assets
minus
Liabilities
Liabilities
IMF Statistics Department
3
Core Balances of the GFS System
• Multiple balancing items for transactions:
– Net operating balance
• Balance of transactions affecting net worth
• Closely related to System of National Accounts government
saving
– Net lending/borrowing
• Net operating balance minus transactions in nonfinancial
assets
– Net cash inflow from operating activities
• Balance of cash transactions affecting net worth
– Cash surplus/deficit
• Net cash inflow from operating activities minus net cash
outflow from investments in nonfinancial assets
4
Other Analytic Measures
• Some other analytic measures for fiscal policy
(see Box 4.1 in GFSM 2001)
– Overall fiscal balance
• Net lending/borrowing minus acquisition of financial
assets for policy purposes
– Overall primary balance
• Overall fiscal balance plus net interest expense
– Net worth
• Total stock of assets minus liabilities
– Net financial worth
• Total stock of financial assets minus liabilities
5
Staff Discussion Note (SDN)
What Lies Beneath:
The Statistical Definition of Public
Sector Debt
An Overview of the Coverage of Public Sector Debt for
61 Countries
Robert Dippelsman, Claudia Dziobek, and
Carlos A. Gutiérrez Mangas (July 2012)
6
Institutional Coverage
Beneath the surface of existing public sector debt
statistics, lie inconsistencies and gaps:
• Many countries report only budgetary central
government.
• Some report central government (adding social
security funds and other extrabudgetary agencies).
• General government is more comprehensive (add state
and local governments).
• Fiscal risks may also come from PUBLIC CORPORATIONS
- financial or nonfinancial.
• So, PUBLIC SECTOR would give the widest picture
(general government + corporations).
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Instrument Coverage
• Narrowest coverage is debt securities and loans
only.
• Currency and deposits (C&D) and Special Drawing
Rights (SDRs) are also debt.
• Other accounts payable (OAP) can be important, not
available from cash accounting systems, not the role
of debt management office.
• Insurance, pensions, and standardized guarantee
schemes (IPSGS) are not widely measured but can be
a major source of hidden burden for governments
– especially government employee pension obligations.
– also mortgages, student loans, deposit guarantees
8
Other Acc Payable
Cur & dep.
Classification of Instrument and
Sectoral Coverage
Sectors/Subsectors
Debt Instruments
* Insurance, pension, and standardized guarantee schemes
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A Unified Approach?
• Many developing countries only report D1 (responsibility of
debt management office).
• Maastricht uses D2 (important omissions).
– Eurostat requires wider measures, but not in Maastricht
definition.
– Maastricht is at face value.
• D3 requires accrual system (adds other accounts payable).
– But crucial to monitor.
– Other accounts payable is not the same as arrears.
• Only a few statistically advanced countries report values of
D4.
– Many report Insurance, pension, and standardized guarantee
schemes as zero, but may mean “no data” not “no liabilities.”
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Does it Matter?
• Is Canadian government gross debt
40 percent of GDP?
•
YES! (GL1/D1)
• Is Canadian government gross debt
110 percent of GDP?
•
YES! (GL3/D4)
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The Range of Gross Debt in Canada
2011
1 Currently not
included in GFSY.
39.8
39.9
72.2
40.2
40.2
72.6
44.7
45.0
96.5
53.5
53.8
109.7
Source: Government Finance Statistics Yearbook (GFSY) 2011.
International Financial Statistics (IFS) June 2011.
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Magnitude Difference between General and
Table
2. Size of Debt-related
Risks Posed by theGross
States, Provinces,
Central
Government
Debt
and Local Governments to the Central Government
Difference between GL3 D1 and GL2 D1 for selected countries (percent of GDP)
35
30
25
20
15
10
5
0
Source:
IMF
Government
Finance
Statistics
Yearbook Yearbook
2011
Source:
IMF
Government
Finance
Statistics
2012
13
Net debt and gross debt (% GDP)
Consolidated General Government (GL3), 2011
150
130
110
Debt
(%GDP)
90
70
50
30
10
-10
-30
-50
l
lia tria ium rus ark and nce any ece and and taly nds way ga ain den key om
a
I la r rtu Sp e ur gd
l
r
l
o o
st Aus elg Cyp enm Finl Fra erm Gre Ice Ire
r
u
B
Sw T Kin
he N P
A
D
t
G
d
Ne
ite
n
U
Gross Debt (%GDP)
Net Debt (%GDP)
Source: GFS Yearbook. These data may not be fully comparable across countries.
14