Statistical Office of the European Union (Eurostat)

G2: Structural business statistics and global value chains

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The Balance of Payments (BoP) systematically summarizes all economic transactions between the residents and the non-residents of a country or of an  economic area during a given period.

BoP provides harmonized information on international transactions which are part of the current account (goods, services, income, current transfers), but also on transactions which fall under the capital and the financial account.

BoP is an important macro-economic indicator used to assess the position of an economy (of credit or debit) towards the external world. Data on International Trade in Services (ITS), a component of BoP current account, are used, alongside with data on Foreign Direct Investment, to monitor the external commercial performance of different economies. Some indicators of EU market integration are also derived from BoP data.

Data are reported in millions of Euro/ECU.

Several statistical adjustments are applied to the original data provided by the Member States.

Guidance for compilers is provided in the Manual on Statistics of International Trade in services 2002 (http://unstats.un.org/unsd/tradeserv/msitsintro.htm), that has been followed by IMTS 2010 (http://unstats.un.org/unsd/tradeserv/TFSITS/msits2010/docs/MSITS%202010%20M86%20(E)%20web.pdf)

 ITS data are collected by national enterprise surveys, International Transaction System (ITRS) and administrative records.

The methodological framework followed in the compilation of the Balance of Payments is the onedefined in the fifth edition of the International Monetary Fund Balance of Payments Manual (BPM5) published in 1993 and in the Manual on Statistics of International Trade in Services (Annex)

New international standards such as the 6th edition of the IMF Balance of Payments and International Investment Position Manual (BPM6), together with the need to coordinate with the implementation of the System of National Accounts 2008 and ESA2010 transmission programme led to an essential update of the methodology used for measuring trade in services (in the general context of BoP). This update was reflected in the European Commission (EC) Regulation 555/2012 (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:166:0022:0066:EN:PDF) what amended the existing BoP EC Regulation 184/2005 and proposed new data requirements aligned with the BPM6 methodology. From reference year 2013 ITS data will be reported merely under the BPM6 methodology.

A correspondence table between the classification BPM5 and the classification BPM6 is available (Annex)

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The balance of payments (BoP) is a statistical statement that systematically summarises, over a given period of time, all the transactions of an economy with the rest of the world. The balance of payments records all economic transactions undertaken between the residents and non-residents of a country during a given period. A transaction is defined in the BPM5 as an economic flow that reflects the creation, transformation, exchange, transfer, or extinction of economic value and involves changes in ownership of goods and/or financial assets, the provision of services, or the provision of labour and capital.

The concept of resident in the BPM5 is identical to that used in the 1993 System of National Accounts (SNA). The concept is not based on nationality or legal criteria. It is based on the notion of a centre of economic interest. An institutional unit is a resident unit when it has a centre of economic interest in the economic territory of a country for a period of at least one year.

The balance of payments provides information on the total value of credits (or exports) and debits (or imports) for each BoP item and on the net result or "balance" (credits minus debits) of the transactions with each partner.

In BPM5, the balance of payments is broken down into three broad sub-items: the current account, the capital account and the financial account.

The current account shows the flows of goods, services, income and current transfers between resident and non-resident units.

Services are the second major category of the current account. In the production of data on International Trade in Services the references are the IMF's BPM5 and the United Nations' Manual on Statistics of International Trade in Services.

The main breakdown of services includes three sub-items: transportation, travel, and other services.

Transportation (BoP item 205) covers services provided by all modes of transportation -sea, air, and other, which includes space, rail, road, inland waterway and pipeline - that are performed by residents of one economy for those of another. The different types of services offered include transport of passengers, transport of freight and other supporting and auxiliary services (e.g., storage and warehousing).

The debit side of the item Travel (BoP item 236) consists of goods and services which are acquired by residents who stay abroad for less than one year. The credit side includes purchases of the same type made by foreign travellers on the national territory. This item contains two main categories of travel: business travel and personal travel (leisure, study, health-related purposes, etc.). Note that international transportation costs of the traveller to its destination are recorded under the heading "transportation", but all movements within the country, including cruises, are reported under "travel".

Other services (BoP item 981) comprise those international services transactions not covered by transportation and travel (communication services, construction services, insurance services, financial services, computer and information services, royalties and license fees, other business services, personal, cultural and recreational services, and government services n.i.e.).

Further details on the classification of services used in BoP are available in Vademecum 2013 (Annex)

Any individual, corporation or other institution that provides information on the transactions between the residents and non-residents of a country during a given period.

BoP statistical population includes all the economic transactions between residents and non residents.  The coverage of the statistical population assured by the reported transactions can be very different for different BoP items. Information on the transaction can be provided by individuals, corporations, or institutions. 

The data generally cover the European Union, Euro area, EU Member States, Croatia, Turkey, Norway, Iceland,  Switzerland, the USA and Japan.

However, both quarterly and annual statistics under balance of payments has a specific geographical coverage.  Details are summarised in the vademecum (Annex).

ITS annual data are available from 1985 onwards. Each table under balance of payments statistics has specific time coverage. More details can be found in the Vademecum (Annex).

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Data are in millions of Euro/ECU.

ITS detailed annual data are available from 2004. Please see the annex of Vademecum for more details on temporal coverage for the different geographical units.

For a long period, Member States have submitted to Eurostat BoP and ITS data following the arrangements defined in bilateral Gentleman's Agreements.

The Regulation n°184/2005 of The European Parliament and of the Council of 12 January 2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment (OJ L35/23 of 8/02/2005), was applied for EU data production as from reference year 2006 onwards. In addition, Commission Regulation (EC) No 601/2006 and Commission Regulation (EC) No 602/2006 have been published (OJ L106/7 and L106/10 of 18/04/2006), respectively implementing and amending Regulation (EC) No 184/2005. In the compilation of BoP, responsibility is shared between Eurostat and the ECB. Eurostat focuses on quarterly and annual aggregates of the EU, as well as on detailed ITS data for the European Union (and subsequently also for the euro area), whereas the European Central Bank (ECB) is in charge of compiling and disseminating only the euro area monthly and quarterly balance of payments statistics. A Memorandum of understanding (with a BoP Annex) has been signed between the two parties.  For more information on euro area Balance of Payments data, see the ECB website http://www.ecb.int/stats/external/html/index.en.html

The reference for National Accounts is the Regulation ESA95 of 25/6/96 published in the OJ L310 of the 30/11/1996.

Commission Regulation (EU) No 555/2012 of 22 June 2012: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:166:0022:0066:EN:PDF

Not applicable.

Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

Some Member States (MS) provide primary and secondary confidentiality.

Nevertheless, some MS provide only primary confidentiality. secondary confidentiality is then applied by Eurostat, and it is sent to MS for approval.

Whenever MS provide Eurostat with primary confidentiality, cells are flagged confidential (C flag) in the Gesmes file (see codes below in 5.1.0). Eurostat performs then a secondary confidentiality treatment which is processed under MDT application. This program adds "S" flags. These flags are added in order to avoid any (direct or indirect) recalculation of confidential cells.

The automatic procedure currently used to hide additional cells relies on automatic crosschecks throughout the partner, post, and flow dimensions and is called secondary confidentiality. The advantage of using such an automated system is that it avoids the risk of disclosure of confidential data and gives the possibility to process a big set of data. The equations used are those available in the BOP Vademecum. Whenever a “C” flag is encountered, the procedure has to indicate the supplementary cells to be hidden. For each dimension, a first choice is given to hide another cell. If the first choice corresponds to the initial value flagged with “C”, then the procedure will hide the value of the component corresponding to the second choice. Therefore, the initial confidential data are being preserved in the secure Oracle environment, and strengthened by the calculation of secondary confidential cells (“S” flags added by Eurostat G-4 internal program).

The first and second choice should be defined with the perspective to minimise the number of additional hidden cells. These criteria are adapted for each country, taking into account which components of the concerned dimension are most sensitive for the concerned Member state in their transmission to Eurostat.

Therefore, to run the procedure, we indicate, for each dimension, the target, the “first” choice, the "second” choice, and the equation components.

Once all the equations have been defined and adapted to the MSs under consideration, the confidentiality procedure is an iterative one. Most of the time, it is assumed that three rounds are necessary to make sure that the number of secondary confidential cells is enough.

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In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

Annual ITS in June and December

News release

Statistics Explained articles.

Annual Yearbook.

Please consult Eurostat reference database on-line or refer to contact details.

Not applicable.

Other than the text of the news release drafted by Eurostat, there are no official comments on the occasion of the release of the data. For further details see also:

http://ec.europa.eu/eurostat

The methodological framework followed in the compilation of the Balance of Payments and International Trade in Services is that defined in the fifth edition of the International Monetary Fund Balance of Payments Manual (BPM5) and Manual on Statistics of International Trade in Services.

Eurostat prepares annual quality reports for the BoP domain in accordance with Commission Regulation (EC) No 1227/2010 of 20 December 2010 implementing Regulation (EC) No 184/2005 (OJ No L 336/15). It contains information on relevance, accuracy, timeliness, punctuality, accessibility, clarity, comparability and coherence.

Quality is assured by the application of concepts according to the fifth edition of IMF Balance of Payments Manual (BPM5) and thorough validation of the data delivered by countries.

Eurostat prepares annual Quality Reports for the BoP domain in accordance with Commission Regulation (EC) No 1227/2010 of 20 December 2010 implementing Regulation (EC) No 184/2005 (OJ No L 336/15).

Users need and are offered complete and consistent data on international trade in services of the EU, EU Member States and some other countries.

Not available.

Data offer complete and consistent description of the components of the ITS components with the geographical breakdown and in accordance with  International Monetary Fund Balance of Payments Manual (BPM5) published in 1993.

ITS data:

Data transmitted by the Member States are checked by Eurostat for their consistency and plausibility. If any problems are found, Eurostat contacts the relevant Member State to check the figures or confirm changes made by Eurostat.

Data on goods are generally based on Foreign Trade Statistics, which are often collected by customs' administrations. Data on services come from a variety of surveys where the data can be reported either by the banks or directly by the enterprises or the households. Data from national authorities are checked by Eurostat and the European Central Bank (ECB) as elaborated in Section 18.4 "Data Validation".

Asymmetries are another way of assessing the accuracy of statistics on flows, where, values of trade in goods and services reported by European countries are compared with that of their partners within the EU. The resulting differences are evaluated.

At the European level, accuracy of GDP is regularly monitored in the framework of the GNI (Gross National Income) Committee and technical aspects are regularly analysed in several working groups and technical committees.

Trade integration indicators of of services as ratio to GDP.

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Annual ITS data are released around 11-12 months after the reference period. Preliminary data, with limited detail for partners and posts, are released 4 - 5 months after the reference period.

Eurostat monitores closely punctuality of data delivery by the countries. Generally countries meet the delivery deadline very well (9 months after the reference period for the detailed ITS data).

The underlying methodological framework, which is defined in BPM5, ensures a high degree of comparability across countries. Regulation (EC) No. 184/2005 contains the questionnaires, and also all the details on the coding system, the format of the data, the deadlines for transmission. Each country compiles its ITS statistics using the data coming from a number of surveys and administrative sources.

The data are generally considered highly comparable over time. The methodology is revised according to the revisions of the fifth edition of IMF's Balance of Payments Manual (BPM5). In some countries, methodological breaks can affect time series (normally on a temporary basis). Backward calculations of time series are provided to ensure full time coherence in a case of methodological changes.

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Data are revised with the updated information transmitted by the Member States, according to the timetable specified in the BoP Vademecum (Annex). The new data received from a single country are loaded in Eurostat's database only when the dataset is updated for all the countries, according to the collection/table.

Every May preliminary (and not fully detailed) data for year T-1 are released together with revisions for year T-2. Every December data for year T-1 (with full detail by partner country) are published, together with revisions for years T-2 and T-3.

Each year or quarter, the national banks or the national statistical offices of the Member States provide Eurostat with data according to a set of questionnaires approved by all Member States and designed to fulfil a set of requirements. The Balance of Payments Vademecum (see Annex) is the reference text for national ITS compilers. This document contains the questionnaires, and also all the details on the coding system, the format of the data, the deadlines for transmission.

Each country compiles its BoP statistics using the data coming from a number of surveys and administrative sources. Methods used for the collection and compilation of statistics differ among BOP services items within a country, as well as among countries.

Data for international trade in services come from a variety of surveys where the data can be reported either by the banks or directly by the enterprises or the households.

Quarterly and annual.

The banks have for a long time provided part of the information used for the compilation of  BoP through the so called "settlements systems" or International Transaction Reporting System (ITRS): banks had to report, generally to their National Central Bank, all the information related to cross-border settlements they had made on their own behalf or on behalf of their customers.  ITRS in the last years has been losing accuracy, because companies are using new techniques in managing their assets and,  moreover, because a new EU Regulation (Regulation (EC) No 2560/2001, 19 December 2001, on cross-border payments in Europe) introduced an exemption threshold for the banks' reporting on behalf of their customers.  To make up for this loss of information, some countries have already introduced new direct reporting systems and new surveys.

On this issue see the Final Report of the Technical Group Direct Reporting, with its Annex C dedicated to the possible ways to use Business Registers for the compilation of BoP abd ITS data.  Annex B to this report gives an idea of the mixed positions of EU Member States towards the use of Direct Reporting systems.

Information on BoP and ITS compilation systems in individual countries can also be found in each SDDS country page published in the IMF's Dissemination Standards Bulletin Board http://dsbb.imf.org/Pages/SDDS/CtgCtyList/in the section "Balance of Payments".

Eurostat submits all data received from the reporting countries to a number of checks. These checks verify the plausibility of the data (e.g. the development of time series), their internal consistency (aggregates should match the sum of the sub-items), their correspondence with data already disseminated by the same country on its NSI web-page or with data sent to IMF.

Time of recording: in line with the BPM5, recording is on a transaction basis ("accruals principle"), meaning that transactions have to be recorded when economic value is created, transformed, transferred or extinguished. The main criterion is change of ownership. The change may be legal or economic.

Valuation: in principle, market prices are used.

In the compilation of BoP, responsibility is shared between Eurostat and the ECB. A Memorandum of understanding (with a Bop Annex) has been signed between the two parties. Eurostat produces Euro area information only regarding the annual detail in trade in Services. All the other monthly and quarterly BoP data related to the Euro area available in Eurostat's database are produced by the ECB. However, within Services, data concerning the Euro area do not match up exactly with those released by the European Central Bank for the same period. The reason lies in a small methodological difference in the data transmitted to Eurostat and the ECB by one Member State. Eurostat is currently working to minimize these discrepancies in the very near future. See the Annex for more details on this issue.

In regard with the compilation of EU aggregates, Eurostat compiles the aggregate EU figures by consolidating the EU Member States' transactions vis-à-vis non-residents of the EU. The balance of payments of the EU institutions is added to the EU aggregate. Intra-EU transactions are not included in the calculation of the aggregate.

This methodology, which is used to compile the BoP aggregates for the EU-15, the EU-25 and the EU-27, has been agreed between Eurostat and ECB, which computes the euro area aggregate in a similar way. This methodology has the advantage of skipping the problem of the existing intra-EU asymmetries. More details on the issue of intra EU asymmetries are available in Eurostat Working Paper Asymmetries in the intra-EU balance of payments.

For details on the adjustments made by Eurostat on the data of each country, see the International Trade in Services EU 1992-2001 - Compilation guide (Annex).

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