Eurostat, the statistical office of the European Union

Eurostat, C1, National accounts methodology. Indicators

Office address:
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Functional mail box: ESTAT-MIP@ec.europa.eu

The Balance of Payments (BoP) systematically summarizes all economic transactions between residents and non-residents of a country or an economic area during a given period. BoP is an important macro-economic indicator used to assess the position of an economy (of credit or debit for current and capital account, net acquisition of financial assets or net incurrence of liabilities for BOP financial account and international investment position) towards the external world.

The external debt (or foreign debt), at any given time, is the outstanding amount of the actual current (and not contingent) liabilities that require payment(s) of principal and/or interest by the debtor at some point(s) in the future and that are owed to non-residents by residents of an economy.

The indicator is used as an auxiliary variable in the MIP context. The data are expressed in % of GDP.  Annual and quarterly figures are published.

The methodological framework followed in the compilation of the Balance of Payments is defined in the Sixth Edition of the IMF’s Balance of Payments and International Investment Positions Manual (BPM6) and the European system of national and regional accounts for the denominator (ESA 2010), as defined in Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013.

Balance of Payments Manual fifth edition (BPM5) was the reference for the data published by Eurostat until 2014.

Data are compiled and disseminated for transactions and positions of total economy vis-a-vis rest of the world.

The external debt is the portion of a country's debt that was borrowed from creditors outside the country, including commercial banks, other governments or international financial institutions (such as the International Monetary Fund (IMF) and the World Bank).
For net external debt, net liabilities are calculated as net incurrence of liabilities - net acquisition of assets.
The assets/liabilities include debt securities, such as bonds, notes and money market instruments, as well as loans, deposits, currency, trade credits and advances due to non-residents. The loans must usually be paid in the currency in which they were made. In order to earn the needed currency, the borrowing country may sell and export goods to the lender's country.

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

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

The MIP scoreboard presents data for each EU Member State and for euro area (EA) and the European Union as a whole. EU and EA aggregates were added in 2023 to give more prominence to EU and EA-level developments and for facilitating the comparison of Member States’ relative positions. 

The data published under the MIP domain are quarterly and annual time series. The quarterly data are annualised as sum of four quarters of each year. The lengths of series vary according to country, for details on time coverage see the information note: tipsii20 and tipsii30.

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Data are presented in % of GDP.

The reference period is the calendar year.

Starting from 2014 the definitions and data published in the MIP scoreboard are based on the Sixth Edition of the IMF’s Balance of Payments and International Investment Positions Manual (BPM6), Commission Regulation (EU) No 555/2012 on community statistics concerning balance of payments, international trade in services and foreign direct investment (amending Commission Regulation (EC) No 184/2005 , as regards the update of data requirements and definitions).
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).
The reference for National Accounts data (in the denominator of the MIP indicator) is the Regulation (EU) No 549/2013 on the European system of national and regional accounts in the European Union (ESA2010).
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.

The indicator Net external debt is one of the MIP auxiliary indicators. The MIP has been set up under Regulation (EU) No 1176/2011 of the European Parliament and of the Council.

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The Regulation 2015/759 of 29 April 2015, amending Regulation (EC) No 223/2009 on European statistics of 11 March 2009 [(recital 24 and Article 20(4))], 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 data.

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For BoP quarterly data, a release calendar is disseminated on the website at http://ec.europa.eu/eurostat/news/release-calendar.

A release calendar for MIP scoreboard indicators is not available. The basic data are published in accordance with the Eurostat release calendar.

The MIP Regulation stipulates that “The Commission shall make the set of indicators and the thresholds in the scoreboard public.” (Art. 4, paragraph 6, Regulation (EU) No 1176/2011 of 16 November 2011 on the prevention and correction of macroeconomic imbalances) and that “The Commission shall update the values for the indicators on the scoreboard at least on an annual basis.” (Art. 4, paragraph 8).

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see item 10 - 'Accessibility and clarity') 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.

The MIP related indicators are updated and released in accordance to the dissemination of the underlying data: quarterly and annual.

News releases on-line.

The indicators are part of the MIP Scoreboard used to identify emerging or persistent macroeconomic imbalances in EU countries. The Scoreboard is part of an annual exercise, where the first step is the compilation of an Alert Mechanism Report (AMR).

See data availability for the different tables: tipsii20 and tipsii30.

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The methodological framework followed in the compilation of the Balance of Payments is that defined in the IMF’s Balance of Payments and International Investment Positions Manual, Sixth Edition (BPM6).

Eurostat's mission is to provide the European Union with a high-quality statistical information service - see: Eurostat quality framework.

The quality is assured by the application of the concepts according to the IMF’s Balance of Payments and International Investment Positions Manual, Sixth Edition (BPM6) and through validation of the data delivered by countries. 

Eurostat prepares national annual Quality Reports for the balance of payments, international trade in services and foreign direct investment in accordance with Commission Regulation (EC) No 1227/2010 of 20 December 2010 implementing Regulation (EC) No 184/2005 (OJ No L 283/3). It contains information on relevance, accuracy, timeliness, punctuality, accessibility, clarity, comparability and coherence. The latest overview report  "Quality report on balance of payments (BOP), international trade in services (ITS) and foreign direct investment (FDI)" provides analysis for data transmitted until September 2019.

The ECB publishes separate quality report on Euro Area and national balance of payments and international investment position statistics. Structure of Eurostat and ECB reports is the result of a Joint Task Force on alignment of the quality reports.

The indicator Net external debt is one of the auxiliary indicators used in the MIP. The MIP Scoreboard is used as an early warning system in the context of the macroeconomic surveillance of the EU Member States. The MIP Scoreboard consists of a set of fourteen indicators, covering the major sources of macroeconomic imbalances. The aim of the scoreboard is to trigger in-depth studies, which will do analyses to determine whether the potential imbalances identified in the early-warning system are benign or problematic.

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Data offer complete and consistent description of the components of the Balance of Payments, International Investment Position, International Trade in Services and Foreign Direct Investment components with the geographical breakdown and in accordance with  International Monetary Fund Balance of Payments and International Investment Position Manual (BPM6) published in 2009.

The Introduction part of the Statistical annex of each Alert mechanism report provides detailed information on data completeness.

The indicators are associated with a high level of overall accuracy. The data transmitted by the Member States are checked in Eurostat for its consistency and plausibility. If any problems are found, Eurostat contacts the relevant Member State for checking the figures or confirming changes made by Eurostat.
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.

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BoP monthly data are released within 7 weeks after the reference period.

Regarding BoP quarterly data:

• a first estimate for EU and euro area aggregates is published 7 weeks after the reference period;
• the complete BoP quarterly dataset, as well as quarterly IIP and revaluations are published 3 months and 1 week after the reference period.

BoP annual data (on which the MIP indicator is calculated) are updated as soon as the corresponding quarterly data are available.

Annual Foreign direct investments (FDI) 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.

The punctuality depends on the delivery of the basic data used for the calculation of the MIP indicators. Eurostat monitores closely punctuality of data delivery by the countries. Generally countries meet the delivery deadlines very well (44 days after the reference period for BOP monthly data, 82-85 days after the reference period for the complete quarterly BoP dataset and quarterly IIP and revaluations, 9 months after the reference period for annual international trade in services and foreign direct investment transactions, income and positions, 21 months after the reference period for activity breakdown of foreign direct investment transactions and positions). 

The underlying methodological framework, which is defined in BPM6, ensures a high degree of comparability across countries. Commission Regulation (EU) No 555/2012 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.
Questionnaires and data requests with all details and explanations concerning requested item, geographical and activity breakdowns are included in Balance of Payments Vademecum.

A summary of the methodologies used for the compilation of BoP by members of the European Union can be found in the ECB publication "European Union Balance of Payments and International Investment Position statistical sources and methods" (November 2016).

The data are generally considered highly comparable over time. The methodology is revised according to the revisions of the IMF's Balance of Payments Manual, Sixth edition (BPM6). 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.

More information on national data can be found on the Dissemination Standards Bulletin Board of the IMF (International Monetary Fund).

BoP data can be related with some of the data published by National Accounts domain (in particular with the figures appearing inside the Rest of the World account) and with the aggregate figures on imports and exports of goods published by Foreign Trade Statistics.

Consistency is checked between quarterly balance of payments and annual international trade in services and foreign direct investment statistics, as well as between monthly and quarterly BoP. Data are also reconciled between international investment position, financial account transactions and other flows.

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The data are revised with the updated information transmitted by the Member States, according to the timetable specified in the BoP Vademecum. Major changes in methodology are the result of legislation (or due to other reasons) and therefore announced in the Official Journal of the European Communities.

Monthly data are transmitted 44 days after the reference month. First release of quarterly data is calculated as sum of monthly data and should be considered as provisional. Quarterly data are revised when more detailed information (by components and geographical breakdown) is transmitted by Member States 82-85 days after the reference quarter. Quarterly data are also revised when information for the next quarters is provided by Member States. Finally, quarterly data are also subject to revision when the annual data are published, in order to ensure consistency between quarterly and annual figures.

Data published by Eurostat are compiled on the basis of data provided by Member States.
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 is the reference text for national BoP 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 items within a country, as well as among countries.

Data for BoP item Goods are generally based on Foreign Trade Statistics, which are often collected by customs' administrations.

Data for BoP item 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 for BoP item Primary Income are generally estimated using information coming from the banking sector and other financial institutions.

Data for BoP item Secondary income generally come from administrative sources.

Data for BoP Financial account and International investment position generally come from the banks and from other financial and non-financial institutions.

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The Balance of Payments Vademecum is the reference text for national BoP compilers. Once data are compiled by national authorities in the reporting format they are transmitted to Eurostat.
Information on BoP compilation systems in individual countries could be found in each SDDS country page published in the IMF's Dissemination Standards Bulletin Board.

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), presence of outliers, size of revisions, their correspondence with data already disseminated by the same country on its NCB or NSI web-page. Validation rules are described in Balance of Payments Vademecum.

Time of recording: in line with the BPM6, 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.

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