Introductory statement to the press briefing following the meeting of the Advisory Expert Group on National Accounts and national accounts users

Transcription

1 Introductory statement to the press briefing following the meeting of the Advisory Expert Group on National Accounts and national accounts users Frankfurt am Main, 9 February 2006 Ladies and gentlemen, Let me welcome you to this informal briefing on the review process of the 1993 System of National Accounts in which Ms. Carson, project manager of this review, and I will report you on the latest state of affairs. You all know about the importance of national accounts in the European context, where European Union Member States are bound by law to produce these statistics on the basis of the principles established by the 1995 European System of Accounts. The need to dispose of transparent and reliable national accounts figures for the general government with a view to the Stability and Growth Path is a leading element which has been constantly underlying the discussions of the AEG. Journalists in Europe are certainly familiar with other key indicators which are frequently under scrutiny in the media such as gross domestic product, net lending/net borrowing, household income and wealth, private non-financial sectors indebtedness and investment, etc. 1

2 The reason why we have decided to report on this process precisely today is twofold: on the one hand, the so-called Advisory Expert Group on National Accounts (the AEG) has been meeting for the last one and a half weeks at the ECB premises in Frankfurt and has come to final agreements on the set of 45 issues considered in this review. Once the United Nations Statistical Commission formally approves these recommendations, the drafting of the revised SNA manual will start and will broadly be based on this set of methodological guidelines. On the other hand, a special meeting on the same subject has taken place today. This meeting has brought together the members of the AEG and some selected European national accounts users ranging from representatives of public institutions such as the European Commission, euro area governments, central banks and the ECB to a sample of users in the private sector coming from universities, research institutes, commercial banks and the press. Before reporting you on the outcome of the latter meeting, I will now pass on the floor to Ms. Carol Carson, the project manager of the SNA review process. She will elaborate on the most important issues discussed by the AEG and the outcome of its deliberations

3 [Ms. Carson makes a short presentation on the conclusions of the AEG meeting. After that, she invites Mr. Keuning to present the outcome of the joint AEG/users meeting] As I mentioned at the beginning, I will now report on the outcome of the meeting that has taken place today. The purpose of the meeting was to facilitate a bi-directional exchange of views between users and producers of statistics: whilst users have received first-hand information on the process leading to an updated version of the 1993 SNA, statisticians have had the opportunity to listen to the users main preoccupations, expectations and wishes with regard to the outcome of this process. Given the wide range of expertise of the attendants, the meeting has had three (rather distinct) parts, as you may have seen in the agenda that has been distributed to you. In the first part of the meeting, we have listened to three presentations which have focused on the use of national accounts for monetary-policy and fiscalpolicy analyses. The presentation of Mr. Hetemäki (permanent Under-Secretary of the Finnish Ministry of Finance and chairman of the EFC Sub-Committee on Statistics) has dealt with some of the most controversial issues concerning the 3

4 measurement of public figures in the updated SNA. He tried to put them in relation to the changes in the Stability and Growth Path, aimed at increasing the focus on safeguarding the sustainability of public finances. However, just to put an example, the creation of government Special Purpose Vehicles to borrow funds outside the government accounts may hamper the final objective if proper measures to correct distortions are not introduced in the accounts. Along those lines, Mr. Hetemäki advised about the risk that the new SNA rules may create new tricks to hide government deficit and debts. The presentation of Mr. M. Buti Director of ECFIN-B in the European Commission) highlighted the value added by national accounts (as opposed to purely accounting figures) in monitoring government deficits. He put much emphasis on the need to avoid large revisions and creative accounting that could put at risk the overall objective of transparency in public finance. Several of the issues highlighted by Mr. Buti have been properly reflected in the discussions of the AEG about which we have just heard from Ms. Carson: e.g. delimitation of the government sector, capital injections to public corporations, government guarantees, etc. Out of these two presentations, I would like to give special emphasis to the importance attached in Europe to the delimitation of pension-related liabilities. The ECB is aligned with the opinion expressed by both Mr. Hetemäki and Mr. Buti in regard to the risks of including pension schemes in 4

5 the government accounts as potentially opening a door for manipulating the figures. Both presentations highlighted costs, lack of timeliness and unreliability of the estimates concerning both social security and pension schemes. Therefore, it seems preferable to indeed supply this information for the sake of transparency, but on a supplementary basis, i.e. outside the core national accounts. The presentation of Mr. Moutot (ECB deputy director general Economics) highlighted three dimensions of the use of national accounts by the ECB, which require strengthening the quality of statistics and the need for further disclosures: For monetary policy usage, which is the basis for the ECB strategy; To monitor financial stability and financial integration; and For monitoring the impact on monetary policy transmission of fiscal policies, the sustainability of public finances and structural reforms. The importance attached by the ECB to such uses of statistics fully justifies the resources currently employed in producing a first set of euro area quarterly sector accounts, which the ECB and Eurostat will start publishing in the first half of The second part of the meeting was devoted to the use of national accounts in research projects, by the press and by the public at large. 5

6 The presentation of Mr. Weale (Director of the National Institute of Economic and Social Research in London) focused on developing the concept of real national income. Mr. Weale raised interesting questions on the link between income and consumption and the role of capital gains and losses, which to his view are not per se part of income but rather a capitalisation of future income in accordance with the SNA income concept. Indeed income has been the subject of contentions discussions at the AEG meetings with the final outcome that the definition of income will hardly be changed (exception made of retained earnings of investment funds) and the debate on the definition of income will most likely be extended beyond the publication of the updated version of the SNA, as it has been put in the longterm research agenda. The presentation of Mr. Barret (Head of Worldwide Economic Data; Bloomberg News) was entitled national accounts and the press. He made a plea for further consistency in the figures provided to the press, both in terms of release times and formats and in the methodology applied across countries. From the ECB point of view, I can undoubtedly subscribe to these principles. Further concerns mentioned by Mr. Barret such as the trade-off between timeliness and reliability and the need to avoid as much as possible too large revisions was also widely shared amongst the rest of the audience. 6

7 The last presentation of Ms. Reichlin (ECB director general Research) was entitled National Account Data in Real Time. She described the importance of data errors (noise) in the accuracy of the analysis at the time of modelling economic variables. The immediate policy implication of much noise may be the uncertainty in judging the state of the economy in real time. Again much emphasis was made on the importance to minimise errors and subsequent revisions in the measurement of the economic reality. The last part of the meeting has been dedicated to a panel discussion in which various colleagues, most of them closely involved in this review process, commented upon the extent to which changes to the SNA framework may ultimately result in statistics which are closer to user demands. [Possibly add the main comments received in this part of the meeting] As a personal conclusion, users have highlighted the importance to ensure the quality of statistics and to minimise revisions over time. Indeed following from these remarks, I should stress the importance attached by the ECB to the development of an appropriate overall quality framework for the compilation of statistics, which we apply on a continuous basis. With this, I would like to conclude with the hope that you will have found this information of interest. I would now like to open the floor for possible questions. 7