Central Bank of Cyprus

Statistics Department

NICOSIA P.O.BOX 25529, CY-1395

The different domains relevant for external sector statistics (Balance of Payments -BOP, International Investment Position - IIP, Foreign Direct Investment - FDI, and International Trade in Services - ITS) sent to Eurostat are based on the BOP Vademecum reflecting requirements laid down in the Regulation (EC) No 184/2005 on Community statistics concerning BOP, ITS, and FDI, as amended by the Commission Regulation (EU) No 555/2012 of 22 June 2012 and Regulation (EU) No 2016/1013 of the European Parliament and of the Council of 8 June 2016.

These datasets are broadly in line with the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6), the OECD Benchmark Definition of Foreign Direct Investment (BD4) and the Manual on Statistics of International Trade in services 2010 (MSITS 2010).

Monthly and quarterly BOP summarize transactions between residents and nonresidents during a specific period. BOP data consist of the goods and services account, the primary income account, the secondary income account, the capital account, and the functional categories of the financial account (direct investment, portfolio investment, financial derivatives and employee stock options, other investment and reserve assets). Differences between the current and capital account on the one hand and the financial account on the other hand are visible under Net errors and omissions that result from imperfections in source data, inconsistent reporting by enterprises and compilation issues. 

Quarterly IIP shows for a country all financial claims on nonresidents and a country’s liabilities to nonresidents at a certain point in time. The breakdown follows the functional categories of the financial account (direct investment, portfolio investment, financial derivatives (other than reserve assets) and employee stock options, other investment, and reserve assets). The sign of the balance shows whether the domestic economic sectors have a net creditor or net debtor position vis-à-vis other countries. The other changes in financial assets and liabilities accounts (revaluations due to exchange rate, revaluations due to other price changes and other changes in the volume) reconcile the balance of payments and IIP for a specific period, by showing changes due to economic events other than transactions between residents and nonresidents.

Annual FDI statistics (consisting of financial account transactions, current account primary income figures and IIP position data) is a category of cross-border investment associated with a resident in one economy (direct investor) having control or a significant degree of influence on the management of an enterprise that is resident in another economy (direct investment enterprise). By convention, such a lasting interest exists when a direct investor owns 10% or more of the voting power or the equivalent (for an unincorporated enterprise). Operational definitions of control and influence are explained in BPM6 § 6.12. Furthermore, the definition of direct investment is the same as in the fourth edition of the OECD Benchmark Definition of Foreign Direct Investment.

Annual ITS statistics record services transactions between residents and non-residents and cover the following categories: manufacturing services on physical inputs owned by others; Maintenance and repair services, not included elsewhere; transport; travel; construction; insurance and pension services; financial services; charges for the use of intellectual property, not included elsewhere; telecommunication, computer and information services; other business services; personal, cultural and recreational services; and government goods and services, not included elsewhere. The services categories are listed in the Extended Balance of Payments Services Classification (EBOPS 2010).

Classification used for the BOP, IIP, FDI and ITS statistics are in broad conformity with guidelines outlined in the relevant manual (e.g., BPM6, BD4).

Nonfinancial transactions in the BOP are generally grouped according to their nature and characteristics. Produced assets are covered in the goods and services account. Primary income captures returns for the provision of labour and financial assets and for renting of natural resources. Secondary income captures further redistribution of income through current transfers, such as by governments, private households or charitable organization in cash or in kind. The capital account is split into gross acquisitions and disposals of nonproduced nonfinancial assets and other capital transfers.

Positions and flows of financial assets and liabilities are primarily grouped according to the BPM6 functional categories. Five functional categories of investment are distinguished: (a) direct investment, (b) portfolio investment, (c) financial derivatives (other than reserves) and employee stock options, (d) other investment, and (e) reserve assets. These functional categories reflect on economic motivations and patterns of behaviour. Positions, the associated income and financial account transactions, and other changes are based on three broad categories of financial assets and liabilities: (1) equity and investment fund shares, (2) debt instruments, and (3) other financial assets and liabilities.

Annual FDI flows are classified according to the directional principle, that is grouping the FDI transactions according to the status of the resident entity; 1) FDI abroad, if the resident entity is the direct investor or, in the case of transactions between fellows companies, if the “Ultimate Controlling Parent (UCP)” is also located in the compiling economy,  2) FDI in the reporting economy, if the resident entity is the direct investment enterprise or, in the case of transactions between fellows companies, if the “Ultimate Controlling Parent (UCP)” is not located in the compiling economy. In the directional presentation, reverse investment can be seen as equivalent to the withdrawal of investment. The instrument classification differentiates between equity (other than reinvestment of earnings), reinvestment of earnings and debt instruments.

Annual FDI income shows amounts payable and receivable between resident and non-resident entities in return for providing financial direct investment assets to the rest of the world, or incurring direct investment liabilities vis-à-vis the rest of the world. The instrument classification differentiates between dividends, reinvested earnings, and income on debt.

FDI positions are also classified according to the directional principle, split into net FDI positions abroad and net FDI positions in the reporting economy. The instrument classification differentiates between equity (including reinvested earnings) and debt instruments.

For all FDI statistics, the geographical allocation is made according to the economic residence of the immediate direct investor or immediate direct investment enterprise, and the recommended classification by activity is that of the direct investment enterprise (to avoid asymmetry issues).  The industrial activity level is based on ISIC4/NACE Rev.2.

International Trade in Services data are presented in line with the Extended Balance of Payments Services Classification (EBOPS 2010).

Known deviations:

Regulation (EU) No 549/2013 (ESA2010) (par. 5.119) and the BPM6 Manual (par. 5.42) provide that funds between deposit-taking corporations are always recorded as deposits. Concerning deposit/loans liabilities of deposit-taking corporations to other counterparts, BPM6 foresees the additional convention that these are to be recorded as deposits, irrespective of the maturity, while ESA 2010 restricts this to short-term funds. Concerning deposit/loans assets of deposit-taking corporations vis-à-vis other counterparts BPM6 foresees the additional convention that these are to be recorded as loans, while ESA 2010 (in § 5.118) makes a similar reference for short-term loans.

Specifically for euro area: The definition of reserve assets is in line with BPM6 guidelines. However, as a member of the euro area, the definition of monetary reserves in a MS’s BOP includes (inter alia) only those liquid claims denominated in foreign currency that the MS’s central bank holds on non-euro area residents. Claims on residents of other euro area countries, regardless of the currency, are part of other external assets.

Institutional units are grouped into institutional sectors according to similar economic objectives, functions, and behaviour.

The sector classifications based on the BOP Vademecum are:

Central bank (S.121); Monetary Financial Institutions (MFI) other than central bank (S.122) (incl. Deposit-taking corporations except the central bank; Money Market Funds (S.123)); General government (S.13); and Other sectors.

The Other Sectors consist of Financial Corporations other than MFIs (S.12); Non-Financial Corporations (S.11); Households (S.14); and Non-profit institutions serving households (S.15).

Exception to BPM6:

A deviation from the BPM6 sector classification is that Money Market Funds are part of Other sectors (in BPM6) whereas they are part of the MFI sector for European Statistics according to the Vademecum.

Cyprus

Institutional sectors’ definition and delimitation follow the practices of BPM6. The statistics produced cover all the resident sectors with cross boarder relations.

The overall conceptual framework of BOP, IIP, FDI and ITS are in broad conformity with the most recent manuals as well as the EC Guidelines and Eurostat’s Vademecum.

Statistical concepts and definitions relate to basic internationally accepted standards and guidelines for external sector statistics; for instance:

• All resident-nonresident transactions covered;
• The concept of residency adhered to;
• For the BOP, the concept of gross reporting is followed for the current and capital account; and the net basis for financial account transactions (separately for the individual asset and liability components);
• The change of economic ownership principle soundly applied;
• FDI is defined as equity ownership representing 10 percent or more of the voting power;
• The accrual basis is broadly applied;
• Market values or appropriate substitute measures are used;#
• the residence of Special Purpose Entities (SPEs) is attributed to the economy in which they are legally domiciled or incorporated;
• Overall, the classification, netting and ordering in the IIP is consistent with BPM6; current, capital, and financial accounts of the balance of payments statement are defined according to the BPM6.

Known Deviation (Source: Vademecum):

BOP/IIP data are to be compiled following the debtor/creditor approach, instead of the “transactor” approach. In other words, the geographical allocation of assets/credits is to be done on the basis of the residency of the issuer/debtor and not of the “transactor”. This is particularly relevant for portfolio and direct investment functional categories, which record tradable instruments. This approach is to be followed consistently in the geographical and sector allocation of investment income, financial transactions and stocks.

Cyprus

The BOP, as described above, is organised in three main accounts: (1)current account, (2)capital account and (3)financial account. In turn, these main accounts break into categories. The main accounts as well the main categories are described below.
(1) Current account: the current account shows transactions in goods, services, income and current transfers between residents and non-residents
(1i) Goods: Goods are physical, produced items over which ownership rights can be established and whose economic ownership can be passed from one institutional unit to another by engaging in transactions.
(1ii) Services: Services are the result of a production activity that changes the conditions of the consuming units, or facilitates the exchange of products or financial assets. Services are not generally separate items over which ownership rights can be established and cannot generally be separated from their production
(1iii) Primary income: This is the return that accrues to institutional units for their contribution to the production process, either for providing labour or for providing financial assets and renting natural resources to non-resident institutional units. It therefore comprises compensation of employees, investment income and other primary income.
(1iv)Secondary income: The secondary income account shows current transfers (in cash or in kind) between residents and non-residents. Various types of current transfers are recorded in this account to show the different roles in the process of income distribution between the economies.
(2) Capital account: The capital account shows transactions in non-produced, non-financial assets, and capital transfers between residents and non-residents.
(3) Financial account: The financial account shows net acquisitions of financial assets and net incurrences of liabilities between residents and non-residents. It is organised in five functional categories: direct investment, portfolio investment, financial derivatives, other investment and reserve assets.
(3i) Foreign direct investment: Foreign direct investment (FDI), or simply direct investment, is the functional category used to record cross-border investment associated with a resident in one economy having control, or a significant degree of influence, over the management of an enterprise resident in another economy. In addition to the equity that gives rise to control or influence, FDI also includes investment in indirectly influenced or controlled enterprises, investment in fellow enterprises, debt (except between affiliated financial corporations) and reverse investment.
(3ii) Portfolio investment: This includes transactions and positions involving equity securities, and investment fund shares and debt securities other than those included in direct investment or reserve assets. Transactions related to repurchase agreements and securities lending are excluded from portfolio investment.
(3iii) Financial derivatives: The functional category financial derivatives largely coincides with the corresponding financial instrument class, the exception being the financial derivatives included in reserve assets. A financial derivative contract is a financial instrument that is linked to another specific financial instrument, indicator or commodity, and through which specific financial risks (such as interest rate risk, foreign exchange risk, equity and commodity price risks, credit risk, etc.) can be traded in their own right in financial markets.Employee stock options are options to buy the equity of a company offered to employees of the company as a form of remuneration. If a stock option granted to employees can be traded on financial markets without restriction, it is classified as a financial derivative.
(3iv) Other investment: This is a residual category that includes positions and transactions other than those included in the other functional categories. Therefore, to the extent that the following classes of financial assets and liabilities are not included under direct investment or reserve assets, other investment includes: (a) other equity; (b) currency and deposits; (c) loans (including the use of IMF credit and loans from the IMF); (d) insurance, pension and standardised guarantee schemes; (e) trade credits and advances; (f) other accounts receivable/payable; and (g) SDR allocations (SDR holdings are included in reserve assets).
(3v) Reserve assets: These are external assets that are readily available to, and controlled by, monetary authorities and that are used for meeting BOP financing needs, intervening in exchange markets to manage the currency exchange rate, and other related purposes (such as maintaining confidence in the currency and the economy or serving as a basis for foreign borrowing). Reserve assets must be foreign currency assets, claims vis-à-vis non-residents and assets that actually exist; potential assets are excluded.

International investment position: The international investment position (IIP) is a statistical statement that shows, at a specific point in time, the value of the stocks of residents’ financial assets that are non-contingent claims on non-residents in that economy or gold bullion held as reserve assets, and of the non-contingent liabilities of the residents to non-residents in that economy. As with the BOP financial account, financial assets and liabilities are grouped into the same five functional categories (see description above).
The difference between the financial assets and liabilities is the net IIP. It represents either a net claim on or a net liability to non-residents. Changes in the IIP between consecutive periods can be due to transactions, as recorded in the BOP financial account during that period, or to “other flows”.Changes in positions between consecutive points in time are explained by the following flows during that period: (i) transactions in the BOP financial account, (ii) revaluations (changes in the euro exchange rate vis-à-vis the currencies in which the assets/liabilities are denominated and/or in the price of the assets/liabilities) and (iii) other changes in the volume of assets and liabilities (such as reclassifications or write-offs).

Specific remark: Statistics compiled by the CBC cover only the government controlled areas of Cyprus.

Institutional units are defined in conformity with BPM6 and relate to those that have a predominant centre of economic interest in the country. In principle, any individual, corporation or other institution that provides information on the transactions/positions between the residents and non-residents of a country during a given period is included. Resident institutional units engaged with nonresidents also cover in principle:

-       incorporated or unincorporated affiliates of nonresident companies; and SPEs with little or no physical presence;

-       resident territorial enclaves in the rest of the world (e.g., embassies, military basis);

-       free zones/bonded warehouses/factories operated by offshore enterprises under customs control;

-       Citizens who work or live temporarily in another country (seasonal and cross border commuters, students and patients).

Not applicable.

The reference area describes the geographical area covered by the data disseminated. According to the BOP Vademecum, the reference area is the economic territory, country, or region for which external sector statistics are provided. The country code list follows the ISO 3166-1 alpha-2 classification and is a "cross-domain" code list, used also in National Accounts. The codes used for various regional groupings are harmonized across international agencies that use the BOP-DSD.

The reference area is Cyprus.

Not applicable.

All data sent to Eurostat are in Millions of Euro for Euro Area countries and in Millions of National currency for non-Euro Area countries. The unit of dissemination is Euro.

The monthly (MBOP), quarterly (QBOP) BOP, and annual FDI transactions summarize economic transactions between residents and nonresidents during the respective reference period.  The annual ITS dataset summarizes services transactions over the period of one year.

The quarterly IIP statement as well as the annual FDI stock statistics refer to a point in time at the end of the reference period; i.e., the last day of a quarter or year, respectively. The other changes in financial assets and liabilities of the IIP statement (revaluations due to exchange rate, revaluations due to other price changes and other changes in the volume) reconcile the BOP and IIP during a specific period.

Institutional Mandate – in national level

The CBC is responsible for the compilation of external sector statistics for Cyprus (i.e. balance of payments, international investment position, external debt, reserve template as well as analytical annual foreign direct investment and international trade in services statistics). Moreover, compilation of outward FATS data falls under the remit of the Statistics Department of CBC.
The legal basis for the statistical functions of the CBC is provided by sections 6 (2) (h), 63 and 64 of the CBC Law, which is fully harmonised with the statistical acquis and the ESCB public commitment on European statistics. Under section 6 (2) (h) of the Law, the collection, compilation and distribution of statistical data, including those required for the fulfilment of the tasks of the CBC as an integral part of the ESCB, is included in the main tasks of the CBC. Pursuant to section 63 of the Law, “banks, government services, public corporations, as well as any natural person or legal entity shall be required, without being entitled to invoke bank or other secrecy, to report to the Bank all the data and information in their possession which are necessary for the fulfilment of its objectives as laid down in section 5 and for the performance of its tasks in accordance with section 6”. Finally, section 64 of the Law includes specific provisions for the collection and compilation of the balance of payments and the international investment position of the Republic as well as the financial accounts of the individual sectors of the economy, including a strict confidentiality regime.

Institutional Mandate – in European level

• Regulation no 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,
• Commission Regulation (EC) No 601/2006,
• Commission Regulation (EC) No 602/2006,
• Commission Regulation (EC) No 707/2009,
• Commission Regulation (EU) No 555/2012,
• Regulation (EU) 2016/1013
• Commission Delegated Regulation (EU) 2019/505 of 19 December 2018
• Quality reports for the BoP domain are prepared in accordance with Commission Regulation (EC) No 1227/2010 of 20 December 2010 implementing Regulation (EC) No 184/2005 (OJ No L 283/3).

Based on a memorandum of understanding between the Central Bank of Cyprus and the Statistical Service of Cyprus, a data sharing between the two institutions is established on certain areas. Moreover, the division of the various tasks with regards to the development, compilation and dissemination of both external statistics and National accounts, is based on informal/gentlemen's agreements.

All data transmitted have a flag indicating the confidentiality level. In Cyprus, a data cell is considered primary confidential if the number of statistical units under that cell is less than 3 or the dominance of one or two units in the data cell is larger or equal to 90%.

BOP Vademecum (2021): Chapter V “Statistical confidentiality” of Regulation (EC) No 223/2009 of the European Parliament and of the Council of 11 March 2009 on European statistics regulates protection and transmissions of confidential data within ESS and ESCB. Confidentiality status attribute is mandatory in BOP and FDI DSDs and thus each observation has to be flagged with a confidentiality status.

When the information is already released and disseminated by the national compiler (e.g. it is published on the national compiler's website) applying confidentiality status attributes such as C "Primary confidential statistical information", D “secondary confidentiality set and managed by the national compiler” or N "Not for publication, restricted for internal use only" is not justified.

Quality issues should be much less frequent for quarterly BOP and IIP data. The confidentiality status attribute "Not for publication, restricted for internal use only" - N flag – shall be used conservatively and rather in cases of more detailed breakdowns (e.g. geographical, instrument or sector breakdown). Using confidentiality status (C or D or N flags) to suppress publication of data with insufficient quality should be avoided. Observation status with U flag (low reliability) should be used instead. This would indicate existing observations and, at the same time, users will be aware of the low quality assigned.

Cyprus

Confidential cells are not disclosed for publication, in accordance with the relevant Community and national legislation.

This indicator refers to Eurostat Quality Report Chapter 1.1.2.The analysis in this section focuses on the availability of the data to the users. The tables present the number of cells flagged as confidential and non - publishable, compared with the total number of cells that have to be provided according to the BOP Regulation.

Cyprus

For monthly BOP:  No data release to users due to the frequency of the majority of the data sources (mainly quarterly). To this effect, data quality of certain categories of monthly figures, suffers. There are plans in the pipeline towards the improvements of the monthly BOP estimations and, hopefully, Cyprus will soon be in a position to release monthly BOP as well.

 For the remaining tables:  There are a few instances (only in FDI) when the percentage falls below 80% which is explained by the fact that a small number of entities (especially big SPEs) dominate certain figures of external statistics of Cyprus, resulting  in the flagging of cells as confidential.

Eurostat release calendar can be found under http://ec.europa.eu/eurostat/news/release-calendar

Cyprus

The CBC publishes an advanced release calendar on its website which covers all the forthcoming external statistics data publications that are to be posted on its website. This calendar distinguishes quarterly disclosure of external statistics from analytical annual data on foreign direct investments (both flows and stocks) as well as international trade in services.
In addition, being a Special Data Dissemination Standard (SDDS) subscriber, the CBC publishes an advanced release calendar covering all data categories required by the said Standard. The relevant SDDS data for Cyprus are available in the national summary data page Central Bank of Cyprus - Key Statistics – SDDS.

The release calendar can be accessed at https://www.centralbank.cy/en/statistics/external-statistics/calendars

The CBC provides detailed statistical tables on its website and informs users of updated and main developments via press release reports.
Release policy of external statistics is in accordance with the revision calendar for data transmissions to the ECB and Eurostat. As regards the revision policy of the CBC please refer to section 17.2.

Eurostat Website:

BOP: monthly and quarterly

FDI flows and stocks: annually

IIP: quarterly and annually        

ITS: annually

Central Bank of Cyprus Website:

BoP data: quarterly and annually

IIP data: quarterly and annually

International trade in services and foreign direct investment data: annual

External Debt data: quarterly and annually

Main External Statistics indicators isolating the impact of SPEs: quarterly

New data release is published in the announcement section of the CBC's website. In addition, a more detailed pdf file is acompanying the announcement. 

External statistics data are used in the publications:

- Quarterly Press Release Report

- Statistical Bulleting

- Foreign Direct Investment report

- Portfolio Investment report

- Annual Report

- Economic Bulletin

At Eurostat, the database for external sector statistics gives access to the following statistics:

• Monthly and quarterly BOP and quarterly IIP statistics;
• Annual data on ITS;
• Annual data on FDI positions, transactions and income;
• Detailed data on international transactions involving the European institutions.

Harmonized data is available for the European Union, the euro area, the EU Member States, the United Kingdom, EFTA countries, candidate and potential candidate countries.

 https://ec.europa.eu/eurostat/web/balance-of-payments/data/database

Cyprus

All data concerning external statistics is available on the CBC's website.
Link: https://www.centralbank.cy/en/statistics/external-statistics/data-based-on-bpm6-methodology

Not applicable.

Quarterly BOP data: Yes

Quarterly IIP data: Yes

Quarterly revaluations data: No

Annual BOP data: Yes

Annual IIP data: Yes

Annual FDI data: Yes

Annual ITS data: Yes

Monthly BoP data are not currently disseminated at the national level but only compiled for the ECB and Eurostat purposes.

Not applicable

The publication of quarterly external statistics is made with an announcement on the CBC's website.

Not applicable.

As an SDDS subcriber, relevant metadata are available under Cyprus's National Page. Also, Level 3 National Assessement Report is available for Cyprus. Moreover, methodological practices are also available in the ECB's BoP Book.

Not applicable.

Not applicable.

This indicator refers to the quality assurance framework (QAF) in place within an organisation to manage the quality of statistical products and processes.

Data quality is explicitly reflected in the strategic goals of the Statistics Department and measures for maintaining or improving data quality are regularly addressed in the annual work program of the Department.
Quality controls are applied at both disaggregated and aggregated level. Most of the data are checked automatically at the level of data collection based on build in criteria. In addition, quality is assured by the application of various checks applied in the data before this is transmitted. For example, the checks concern, among others, outliers, consistency with related statistics (for example, SHS, BSI). Moreover, the ECB and Eurostat, upon receipt of the data are performing their own quality checks which are shared with Cyprus.
Finally, for selected large units, the CBC and CYSTAT have established an exchange data mechanism at micro level.

This indicator refers to the Eurostat Quality Report Chapter 7 and 8: Overall Assessment.

 The Statistics Department of the Central Bank of Cyprus is committed to maintain and improve further the quality of external statistics and, in particular to explore ways to further improve asymmetries vis-à-vis other EU countries. Moreover, the CBC is to intensify its efforts on more accurate monthly BOP estimates as well as on reduction of the E&O component.

To guarantee the quality of results, European statistics shall be developed, produced and disseminated on the basis of uniform standards and of harmonised methods. In this respect, Regulation (EC) No 223/2009 of the European Parliament and of the Council quality criteria (a) ‘relevance’ refers to the degree to which statistics meet current and potential needs of the users. Meeting the requirements of the EC Regulation on community statistics concerning balance of payments, international trade in services and foreign direct investment confirms relevance for the user “Eurostat” as recipient of the data sets on behalf of its user community.

Furthermore, relevance is also indirectly accomplished by countries participating in domain specific committees and working groups as well as the worldwide update of the manuals whose aim it is to keep the standards and statistics as relevant as possible going forward.

External statistics are transmitted to the ECB and Eurostat for the compilation of euro area and EU aggregates, respectively, and to the IMF for the purposes of IMF Article IV reviews. They are also disseminated in order to be used for SDDS and for the EU MIP.
At the national level they are used as input for the compilation of National Accounts by the National Statistical Institute. They are also disseminated to the Ministry of Finance and other internal and external users (such as embassies) upon request.

No user satisfaction measurement exists in Cyprus

This section refers to the current Eurostat Quality Report 1.1.1. Data availability- completeness.

Data completeness – the provided cells expressed as % of required cells refers to the completeness of BOP, IIP, FDI and ITS data provided to Eurostat based on the requirements of the BOP Regulation.

Accuracy of data is the closeness of computations or estimates to the exact or true values that the statistics were intended to measure.

Accuracy is being measured using three concepts: Reliability; Vintage Analysis; and Plausibility. See 13.1.

This section refers to the current Eurostat Quality Report Chapter 2.  

(i) Accuracy can be measured using the concept of Reliability - defined as the closeness of the initial estimated value to the subsequent estimated value. This section refers to the current Eurostat Quality Report 2.1.1. Quantitative assessment of revisions. Complementary information on Revisions are also provided under S17 Data Revision.

The quantitative analysis focuses on the size of revisions, their direction and the reliability of trends using the data provided by countries to Eurostat.

For the Monthly BOP, Quarterly BOP and Quarterly IIP items, revisions are assessed using two types of indicators both of which are based on the comparison between first and last assessments:

- Directional stability indicators measure how often the first assessment is subsequently revised in the same direction (the upward revisions ratio and the directional reliability indicator).

- Relative size indicators measure the difference between the first and the last assessments. These absolute differences may be quantified relative to the underlying series (when strictly positive) or to the underlying outstanding amounts. These indicators are the symmetric mean absolute percentage ratio, mean absolute comparative ratio and for net/balance series the net relative revisions.

(ii) Accuracy can be measured using the concept of Vintage Analysis. This section refers to the current Eurostat Quality Report 2.1.2 Vintage Analysis. For the assessment of annual data (ITSS, credit and debit, FDI flows and positions, inward and outward), the analysis focuses on the differences between the values as reported in the last 4 data deliveries to Eurostat. The counterpart area is Extra EU27 and Rest of the World.

(iii) Accuracy can be measured using the concept of Plausibility – referring to the absence of unexplained changes. This section refers to the current Eurostat Quality Report 2.2. Plausibility. This concept calculates the share of unallocated partner or activity from total (%) for ITS, FDI flows and positions.

Cyprus

The indicators used for the assessment of revisions can, in some categories, deviate from the proposed ranges due to the following reasons:

• For monthly data:  Assumptions and estimations are widely used when compiling monthly data for the first time due to the fact that most of our sources are available on a quarterly and in a few cases on a semi-annual and an annual basis.
• For the quarterly data: Given that some of our sources are available on an annual basis (mainly financial statements of SPEs), this is the main cause for the outranged indicators. This is most common where the impact of SPEs is most prevalent (income account, financial account and IIP). It should also be noted that mainly, due to the fact that  2019 was a year for major-revisions (which included, among others, the enhancement of the SPEs sample) some indicators such as “upward revision indicator” and “Dir. Reliability” are upward biased.

The indicator on vintage analysis is significant especially for the annual FDI data. The main reason behind this is the fact that our main data source for SPEs are financial statements which are available on an annual basis and with a considerable lag.

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

Not applicable. 

According to the provisions of the Commission Regulation (EU) No 184/2005 and ECB Guideline ECB/2011/23 datasets are reported by countries to Eurostat with the following timeliness:

The BOP regulation defines the timeliness and sets the deadlines for the data transmission to Eurostat as follows:

-      Monthly BOP: 44 days after the end of the reference period;

-      Quarterly BOP, quarterly IIP and quarterly revaluations: 82/85 days after the end of the reference period;

-      ITS: 9 months after the end of the reference period;

-      FDI: 9 months after the end of the reference period (21 months for the activity breakdown).

Cyprus

Overall, National data collection and processing timetables are adequate to meet timeliness and periodicity for disseminating the BOP, IIP, FDI and ITS statistics according to the EC Regulation.

Not applicable. 

Not applicable. 

For Cyprus, all requested datasets were provided to Eurostat on time.

This indicator refers to Eurostat Quality Report 3.1 Punctuality.

Punctuality is calculated as the actual date of data delivery minus the scheduled date of transmission to Eurostat. It shows how many calendar days this was behind (positive value) or ahead of (negative value) the legal deadline.

Coherence refers to the adequacy of the data to be reliably combined in different ways and for various uses.

In the Eurostat Quality Report, the analysis of coherence focuses on two aspects: internal consistency, that examines to which extent data are coherent within the dataset, and external consistency, that examines to which extent data are coherent with others statistics (e.g., NA) obtained by different sources or within different statistical frameworks.

Comparability refers to the measurement of the impact of differences in applied statistical concepts and methodologies, measurement tools and procedures applied, when statistics are compared between geographical areas, sectoral domains (e.g., with QSA, ITGS data) or over time. 

This indicator refers to Chapter 5.3.1 and the corresponding tables of the Eurostat Quality Report: Asymmetries with regard to main ITS and FDI items.

Further information and country-specific feedback is provided below. 

Concerning services, Cyprus participates in the Asymmetry Resolution Mechanism (ARM) and through that, it managed to reduce asymmetries in the exercises it participated.
Furthermore, with regard to Foreign Direct Investment (FDI) asymmetries, Cyprus is an active participant in the FDI Network. Through its involvement, Cyprus has demonstrated its ability to promptly address cases received through the FDI network, ensuring a swift resolution of any discrepancies.

In general, the main reasons behind percistent asymmetries between Cyprus and other countries are:
(i) current data sources (e.g. data from financial statements) do not adequately cover country allocation,
(ii) timeliness of some data sources (e.g. financial statements) are available after the T+9 submission deadline or even further than that.
The above mainly concern SPE companies in Cyprus. In order to address the above, Cyprus is currently in the process of transitioning its primary data source for such companies from financial statements to a survey-based approach. This shift not only promises to enhance the accuracy of geographical allocation but also significantly improves the timeliness of data related to these entities.

In addition, asymmetries may arise due to the fact that data compiled by the Central Bank of Cyprus cover only the area under the control of the Government of the Republic of Cyprus (i.e. it does not cover the occupied area of Cyprus)

External statistical data typically remain comparable over time. Some break in the series which may appear relate with the coverage of Special Purpose Entities (SPEs). This coverage tends to improve gradually over time, potentially causing breaks in the data series, particularly in the International Investment Position (IIP), until revised data encompass a more extended historical timeframe. These breaks in the series are addressed during major revisions, occurring every five years, when data is thoroughly revised to include a more extended historical context (for more details, refer to section 17.2 on our revision policy).

Comparable time series (based on the BPM6) are comparable from 2008Q1 onwards. In addition, in the context of Macroeconomic Imbalances Procedure, the CBC proceeded with the estimation, on a best effort, of selected external statistics series in BPM6 format, for the period 2004 - 2007

Methodological guidelines for compiling BOP, ITS and FDI statistics are defined by the Balance of Payments manual of the IMF (6th edition) and further specified by Manual on Statistics of International Trade in Services of the United Nations, and the OECD Benchmark Definition of Foreign Direct Investments (4th edition).

Methodological guidelines for compiling BOP, IIP, FDI and ITS statistics are defined by the BPM6, the Manual on Statistics of International Trade in Services of the United Nations, and the OECD Benchmark Definition of Foreign Direct Investments (BD4). 

Cyprus follows the BOP methodology and concepts defined in the international guidelines.

The methodology for Goods and Services is outlined in Chapter 10 of the IMF BPM6. For community statistics, countries are expected to record different values for Goods “national” and “community” concepts, if applicable. 

Cyprus compiles the Goods account according to the relevant guidelines

The methodology for Goods and Services is outlined in Chapter 10 of the IMF BPM6.

Cyprus compiles the Services account according to the relevant guidelines

The methodology for Primary Income is outlined in Chapter 11 of the IMF BPM6.

Cyprus compiles the Primary income account according to the relevant guidelines

The methodology for Secondary Income is outlined in Chapter 12 of the IMF BPM6.

Cyprus compiles the Secondary income account according to the relevant guidelines

The methodology for the Capital Account is outlined in Chapter 13 of the IMF BPM6.

Cyprus compiles the Capital account according to the relevant guidelines

The methodology for Direct Investment is outlined in Chapters 6, 8 and Appendix 6 of the IMF BPM6.

Cyprus compiles the Direct Investment statistics according to the relevant guidelines

The methodology for Portfolio Investment is outlined in Chapters 6, and 8 of the IMF BPM6.

Cyprus compiles the Portfolio Investment statistics according to the relevant guidelines

The methodology for Other Investment is outlined in Chapters 6, and 8 of the IMF BPM6.

 Cyprus compiles the Other Investment statistics according to the relevant guidelines

The methodology for Financial Derivatives is outlined in Chapters 6, and 8 of the IMF BPM6.

 Cyprus compiles the Financial derivatives according to the relevant guidelines

No other methodological deviations

No changes during the reference year.

These indicators refer to Chapter 6 and the corresponding tables of the Eurostat Quality Report: Coherence.

The comparability between BOP, IIP, FDI, ITS and National accounts is ensured by the application of common concepts and definitions of BPM6 and the 2008 SNA/ESA 2010.

Further information and country-specific feedback is provided below. 

Sub-annual and annual statistics are fully reconciled.

This indicator refers to Eurostat Quality Report Chapter 6.2.1: BOP/ITGS reconciliation. The corresponding table – to be completed by countries is part of the Quality Report Annex 2 and is included in the Metadata Handler in form of a separate Excel Sheet.  

ITGS cover goods “which add to or subtract from the stock of material resources of a country by entering (imports) or leaving (exports) its economic territory” (United Nations IMTS: Concepts and Definitions 1998, paragraph 14). This basis differs from the change of ownership between residents and nonresidents required for BOP, so adjustments are needed.

Please refer to BPM6 § 10.17 for cases that are included in the BOP definition of general merchandise because there is a change of ownership of goods between a resident and a nonresident.

Please refer to BPM6 § 10.22 for items to be excluded from general merchandise because there is no international transaction because there is no change of ownership of goods between a resident and a nonresident, or because the goods have no value. 

Cyprus

The BOP/ITGS reconciliation table is available at Eurostat only for internal purpose.

This indicator refers to Eurostat Quality Report Chapter 6.2.2: Consistency with National Accounts. The corresponding tables in the Eurostat Quality Report assess the external consistency between the BOP and Rest-of-the-World Account in NA. As the concepts for the BOP and NA accounting frameworks are, in principle, consistent with one another, an assessment of the consistency concludes on how far these two accounting frameworks have been consolidated with each other. 

Cyprus

Fully consistency is achieved with the national accounts during the September transmission every year (this is when prior years revisions are transmitted)

These indicators refer to Chapter 6 and the corresponding tables of the Eurostat Quality Report: Coherence.

All statistical BOP, FDI, ITS outputs delivered by Cyprus are (internally) consistent as regard the integrity rules defined in the Eurostat BOP Vademecum.

This indicator refers to Eurostat Quality Report Chapter 6.1.2 Consistency between quarterly and annual data: The Quality Report Tables monitor the progress made in aligning quarterly and annual data.

For example, ITS and FDI annual data are compared with the sum of the corresponding four quarters for partners Extra EU27 and Rest of the World.

Quarterly and Annual data provided by Cyprus to Eurostat are fully reconciled for all domains.

This indicator refers to Eurostat Quality Report Chapter 6.1.3 Consistency between quarterly and monthly data: Quarters are compared with the sum of the corresponding three months for partners Extra EU27 and Rest of the World for Goods, Services and Secondary Income and partner Rest of the World for Primary Income. The discrepancy, computed as difference between the sum of the monthly and the quarterly data, is also shown as a share of the quarterly value. 

Monthly and Quarterly data provided by Cyprus to Eurostat are fully reconciled for all domains.

This indicator refers to Eurostat Quality Report Chapter 6.1.4 Consistency between BOP and IIP figures. 

The BOP and IIP figures reported by Cyprus are fully consistent.

This indicator refers to Eurostat Quality Report Chapter 6.1.5 Errors and Omissions (E&O). Although the BOP accounts are, in principle, balanced, imbalances result in practice from imperfections in source data and compilation. This imbalance is labelled net errors and omissions. According to BPM6 § 2.25, “a consistent sign indicates a bias in one or more components. A persistent positive value of net errors and omissions suggests that credit entries have been understated or omitted or debit entries have been overstated. In contrast, a volatile pattern may suggest timing problems. However, although net errors and omissions can help point to some problems, it is an incomplete measure because errors and omissions in opposite directions offset each other.”

The size and the sign of the E&O item are analysed in the Eurostat Quality Report Tables.

Cyprus

The errors and omissions indicators are improving compared with previous years. This is evident from the indicator “Cumulative sum of E&O (CS)” which has been on a downward trend in the last quarters. It should be noted that some small increases in the absolute errors and omissions is probably related to the COVID19 situation and the difficulties it imposed on data compilation. It is worth mentioning that identification of the main reasons behind the E&O is one of our priorities and certain actions are in place.

Not applicable. 

Source: A Harmonised European Revision Policy for Macroeconomic Statistics; CMFB October 2017. Macroeconomic statistics, such as national accounts, the balance of payments and the international investment position, are produced from a large variety of data sources. These data sources are reconciled using an approach based on an agreed set of international guidelines. The sources used to estimate macroeconomic aggregates are provided with varying degrees of timeliness, taking up to three years or more in the case of structural sources. As users need national and international data as fast as possible, particularly on certain key aggregates like gross domestic product (GDP), data are produced using the sources and related indicators that are more readily available. As more complete data are obtained from these sources in due course and the structural sources are made available, the statistics are updated to incorporate the new information.

Such revisions of macroeconomic statistics are necessary to improve quality, but can be inconvenient for users. To minimise this inconvenience, revisions should ideally be coordinated within one country, across different statistics, and then across countries. International comparability – and the compilation of EU and euro area aggregate statistics – is hampered when different revision policy schemes are applied in different countries. As the schedule of revision of national accounts and balance of payments statistics varies from country to country, this creates inconsistencies among different statistical domains.

The European Statistical System (ESS) and the European System of Central Banks (ESCB) try to strike the right balance between incorporating the necessary statistical revisions and maintaining an acceptable degree of consistency across domains and countries. To this end, the two systems have worked together to draw up guidelines for a harmonised revision policy for macroeconomic statistics.

A distinction should be made between 'routine' revisions and 'major' or 'benchmark' revisions. Routine revisions refer to the changes made to the economic data published initially and to its subsequent releases for a particular reference quarter or year. The earlier estimates typically undergo the most significant revision. In routine revisions, the number of past periods being revised (the 'depth' of the revision) is typically relatively limited. Benchmark revision is carried out at much longer time intervals. Its purpose is to incorporate the main new data sources and major changes in international statistical methodology (such as ESA 2010 or BPM6). In benchmark revision, many years are open for revision in order to create the longest possible consistent time series.

The National Statistical Offices and the National Central Banks are not legally bound by this common policy, but voluntarily agree to it and commit to gradually implement it with the aim of delivering more consistent statistics to users. The level of adherence to the guidelines of countries' revision policies will be monitored regularly.

BOP and IIP data are subject to regular revisions, in accordance with the revision calendar for data transmissions to the ECB and Eurostat. The revision policy of the CBC includes three types of revisions:
- The routine/regular revisions, which concern monthly, quarterly and annual data and occur twice a year as follows:
> In March, whereby monthly and quarterly data of the previous year (t-1) are revised, and
> In September, whereby monthly, quarterly and annual data of the previous three years (t-1, t-2 and t-3) as well as the monthly and quarterly data of current year (t) are revised.
Monthly data are subject to revision when quarterly data are published (either for the first time or revised). The first revision of the provisional data of the first quarter in year t is published when data for the second quarter of year t are published (that is, in each September of year t). Subsequently, a first revision of data of the second and the third quarter of year t along with a second revision of the first quarter of year t is published when the data of the fourth quarter of year t is published (that is, each March in year t+1). Regarding annual data, a first revision of the provisional data of year t is made in September of year t+1, the second revision, in September of year t+2 and the third (and final) revision, in September of year t+3. When revised annual data is published, revisions are made on monthly and quarterly data as well.
- The major revisions, usually every five years, aim to incorporate results of changes in basic data sources (this is currently done from 2008 onwards, which was the year in which Cyprus joined the euro area).
- The ad-hoc revisions, which originate from methodological changes or special events and usually take place in the year in which they appear.

Not available

This quality concept refers to whether the composition of data sources (surveys, ITRS (International Transactions Reporting System), administrative data, ITGS, monetary and financial statistics, etc.), in principle, sufficiently covers the compilation of BOP, IIP, FDI and ITS. 

Please refer to Table Data-Sources Detail.

Not applicable.

The following sub-categories refer to the Extended Balance of Payments Services Classification (EBOPS 2010) data collection. The EBOPS 2010 classification provides a breakdown of the Balance of Payments Trade in Services items (debit and credit) as defined in BPM6, by types of services. The classification thereby meets a number of user requirements, including the provision of more detailed information on Trade in services as required in connection with the General Agreement on Trade in Services (GATS).

EBOPS 2010 is a primarily product-based classification of types of services, which in many cases may be described in terms of international classification of products as contained in CPC Ver. 2. However, the classification also includes transaction-based criteria (for example, Travel, Government services, and Construction Services).

Cyprus confirms that the resident/non-resident EBOPS 2010 transactions are implemented according to the centre of predominant economic interest (residence) of units.

Cyprus confirms that EBOPS 2010 transactions are based on market prices.

Cyprus confirms that EBOPS 2010 transactions are recorded on an accrual basis.

Cyprus confirms that in case of a currency conversion, the market exchange rate prevailing on the transaction dates is applied.

The EBOPS 2010 categories items are broken by country. It is noted that in a few instances a country breakdown is not available and this is reported as unallocated. 

The Central Bank of Cyprus does not publish data beyond the EBOPS 2010 categories. 

As regards data received via direct reporting (i.e. company surveys), these are checked for possible outliers and the companies are contacted via phone in order to verify the outliers.
A similar check is also performed on data received from administrative sources. The contact in this case mainly leads to better understand the data and not to corrections.
Once all data enter the database, there are checks at a more aggregate level. These include outliers of the main categories of BOP/ IIP compared with previous periods. These outliers are then checked to the micro level (which source/ company caused them). Moreover, in case of large errors and omissions, we try to identify its origins. Also, a check is preformed on how IIP is reconciled with the relevant flows by main category. Based on the above, thorough examinations take place in order to identify the cause so to understand the data better and proceed to corrections where applicable.

Not applicable.

Not applicable.

Not applicable

Not applicable