Government Finance Division IMF Statistics Department The Use

Government Finance Division IMF Statistics Department The Use of Indicators on Deficit and Debt 9 th Meeting of the Advisory Expert Group on National Accounts September 8– 10, 2014, Washington D. C. Claudia Dziobek, Chief - IMF Government Finance Division Tuesday, September 9, 2014 (Afternoon Session-Item 14) Reproductions of this material, or any parts of it, should refer to the IMF Statistics Department as the source.

Government Finance Division IMF Statistics Department Overview § GFS and National Accounts § Availability of International Guidelines for Debt Data § § § Compilation Sources of Differences in Debt Data A Cascading Approach to Presenting Debt Data Way Forward 2

Government Finance Division IMF Statistics Department GFS and National Accounts § GFSM 2014 aligned with 2008 SNA § Government a major sector § GFSM 2014 framework requires additional information to NA data for more detailed fiscal analysis e. g. , • • • Different aggregates (revenue, expense, expenditure) Detailed breakdown of taxes, subsidies, other government revenue Consolidation § IMF GFS questionnaire seeks more detailed information that available from NA compilation. 3

Government Finance Division IMF Statistics Department GFS and National Accounts § GFSM Framework has four alternative measures of the deficit / surplus: • • Net/gross operating balance Net lending/net borrowing (NLB) Cash surplus/deficit Total financing § Other surplus / deficit indicators are also widely used e. g. • Primary balance (or primary surplus / deficit) • Structural / cyclical balances § All these indicators provide an indication of the in-year fiscal position. 4

Government Finance Division IMF Statistics Department GFS and National Accounts § Government gross debt a key fiscal indicator: • Defined as a subset of total government liabilities – six debt instruments v v v Debt securities Loans Currency and deposits SDRs Other accounts payable Insurance, pension and standardized guarantee schemes § For debt statistics, analytical need for debt at different valuations (not just market values) 5

Government Finance Division IMF Statistics Department Availability of International Guidelines for Debt Data Compilation § International guidelines for compiling debt well established: • • • Government Finance Statistics Manual 2014; Public Sector Debt Statistics: Guide for Compilers and Users; and External Debt Statistics: Guide for Compilers and Users (EDSG), 2011. § In practice, differences in debt data limit cross country comparability 6

Government Finance Division IMF Statistics Department Sources of Differences in Debt Data § Differences arising from: • Institutional sector coverage – central government? general government? public sector? other? • Debt instrument coverage – just debt securities and loans, or wider coverage of debt instruments? • Valuation – market, nominal, or face value • Consolidation - consolidated or unconsolidated debt? 7

Government Finance Division IMF Statistics Department Sources of Differences in Debt Data Institutional Sector Coverage Includes State and Local Canada’s Gross Debt by Sector (in percent of GDP) 139% 106% 49% Source=World Bank/IMF /OECD Quarterly Public Sector Debt Statistics Database 8

Government Finance Division IMF Statistics Department Sources of Differences in Debt Data Debt Instrument Coverage Australia: Debt Instruments (in percent of GDP) Note magnitude of Pension Liabilities Source = Government Finance Statistics Yearbook (GFSY) 9

Government Finance Division IMF Statistics Department Cascading Approach to Presenting Government Debt Data Levels of Government Aggregations of Debt Instruments § GL 1 – Budgetary Central § D 1 – debt securities and loans § D 2 – D 1 plus SDRs and currency Government § GL 2 – GL 1 plus extrabudgetary units and social security funds § GL 3 – GL 2 plus state and local governments § GL 4 – GL 3 plus nonfinancial public corporations and deposits § D 3 – D 2 plus other accounts payable § D 4 – D 3 plus insurance, pensions and standardized guarantee schemes § GL 5 – GL 4 plus financial public corporations 10

Government Finance Division IMF Statistics Department Cascading Approach to Presenting Government Debt Data 11

Government Finance Division IMF Statistics Department Country Examples: China P. R. Hong Kong Very low levels of debt in D 1 -D 3 – most debt is employment related pensions for civil servants 12

Government Finance Division IMF Statistics Department Country Examples: Iceland Major increase in Icelandic debt is from D 3 to D 4 at all levels of government GL 3/D 3 = 105 percent of GDP GL 3 / D 4 = 132 percent of GDP 13

Government Finance Division IMF Statistics Department Country Examples: USA Some debt securities issuance by State and Local Governments – emphasizes importance of general government data D 1/GL 1 is 79 percent of GDP. D 4 /GL 3 is 122 percent of GDP 14

Government Finance Division IMF Statistics Department Way Forward § The IMF is adopting the cascading approach in the recently updated questionnaire to collect data from member countries for publication in the 2014 GFSY • Countries or regions are also allowed to disseminate a debt aggregate using their national definitions of debt § The same approach is adopted for the presentation of government/public sector debt data in the World Bank/IMF/OECD Public Sector Debt Statistics database 15