Remarks on The Post-pandemic Landscape for Central Bank Statistics
11th IFC Biennial Conference
Pablo García Silva, Deputy Governor, Central Bank of Chile
August 25th 2022
I want to thank the organizers for the opportunity to participate in this distinguished panel,
providing some remarks on the challenges we face as Central Banks and as providers of statistics,
particularly in the environment we live today, as the pandemic recedes.
Central Banks are keenly aware of the need to provide timely, accurate, and in-depth
understandings of the changing economy. This not only to inform correctly policy making, but also
to satisfy the shifting demands of society regarding the environment we live in.
This inevitably implies trade-offs. Operative and budgetary constraints mean that a careful balance
of timeliness, accuracy, and depth needs to be achieved. The ever-expanding complexity of
economic relationships, and the speed at which policies have had to adapt to very large shocks,
imply in my view that compared to a not so distant past timeliness is today at a premium. The times
of change we live in require us to react promptly. This, however, carries the cost that both the
accuracy and the depth of data will be inversely related to its timeliness. This brings about the
implication that both policy making needs to consider the implicit uncertainty of the environment,
and also that statistics providers need to be candid about those uncertainties when communicating
with the public.
Central Banks have found that venturing into the digital transformation with an increasing use of
big data, a process that was accelerated because of the sanitary crisis, helps ease somewhat these
trade-offs. Many central banks have broadened the analysis using less traditional sources derived
from the so-called "open" data available on the Internet. They started to apply big data techniques,
such as web scraping, machine learning or text analysis, for collecting and transforming data on
prices, job vacancies or retail sales, among others.
As a result, it became possible to release new indicators with higher frequency and timeliness. This
has contributed to a better understanding of economic phenomena, providing up to date empirical
support to the implementation of monetary policy and financial stability mandates.
New sources of information
In our case, at the Central Bank of Chile we have embarked in several efforts to expand and improve
the data available. For the first time, starting in June, we released regional gross domestic product
and household consumption on a quarterly basis, with a lag of a few months. This advance enhances
data robustness and provides valuable information for economic analysis and public policy decisions
by increasing the frequency and opportunity with which we can measure regional economic
conditions, which until recently was available only annually. This initiative has been applauded by
local and regional stakeholders, as it will be providing a regular and up to date assessment of the
business-cycle, helping adjust and draw economic initiatives by both the public and private sectors
that can be more precisely tailored to changing local realities.
This initiative was possible because of the maturing relationship through the protocolization of
anonymized information exchange between the Central Bank and the Chilean Internal Tax Service.
The use of existing administrative records, allowing the identification of the location of economic
transactions, has been much more efficient than the traditional recourse to large surveys, both in
the timeliness of access as well as the possibility to backward estimate up to a decade of
information.
Following that, in July, by the joint effort of several institutions, we broadened data availability by
gender and regions. Additionally, we managed to facilitate access and data analysis by combining
data from different sources in one location using our public Statistics Database platform.
We have now begun to publish an "experimental statistics" section that brings together indicators
in various areas of interest. The indicators include mobility indexes, based on the number of
electronic invoicing issued by a sample of gas stations; a daily retail sales index, which anticipates
the activity of the retail trade sector; and the Internet Job Ads Index, first published in 2019, based
on the ads posted at the leading web employment portals in Chile.
To ease and empower the user in manipulating and utilizing these new data we launched a new
visualization tool developed in Power-BI.
The lesson learned is also that to keep up with the changes and react promptly, we must continue
encouraging the digital transformation of our organizations, incorporating advanced analytical
techniques, and providing more timely and granular information that considers heterogeneity to
complement conventional statistics.
As the access to new large-volume databases and the use of granular data almost always poses the
challenge of confidentiality, the Central Bank of Chile has sought to implement best practices and
safeguards to exploit such information. With this objective, we established a Data Governance
Agenda, led by a Strategic Committee that reports directly to the Board and whose executive
management is located in the Statistics Division. Likewise, we are working on our Big Data Strategic
Project, which contemplates a centralized data repository that all user areas can access.
Climate and distributional challenges
Central banks actively participate in different initiatives to respond to the demands derived from
climate change. In April 2022, the Intergovernmental Panel on Climate Change (IPCC) stressed the
critical role of climate data in effectively aligning the financial sector with science-based
decarbonization and adaptation goals. In line with that, the final report on bridging data gaps of the
Network for the Greening of the Financial System (NGFS) from June 2022, and the New G20 Data
Gaps Initiative (official launch in September 2022), made clear recommendations on the need to
develop methodologies and sustainable finance classifications that make the indicators more
comparable. An emphasis was placed on green bonds and a call to intensify efforts between central
banks and supervisors to have standards for the disclosure of environmental data.
The Central Bank of Chile, in addition to its participation in the NGFS, has joined two Chile-based
initiatives. The first one is the Natural Capital Committee, a body integrated by the Ministry of the
Environment, the Ministry of Finance, and the Ministry of the Economy, which aim is to advise and
provide recommendations for the measurement of natural assets in Chile. And the second one is an
initiative led by the Ministry of Finance to develop a classification system for environmentally
sustainable economic activities. There is also a strong demand for central banks to consider the
potential side effects of climate change on economic outcomes, insofar they impinge on their
monetary and financial stability mandates.
The distributional household accounts introduce household sector heterogeneity into the
framework of national accounts and provide the opportunity to obtain a comprehensive and
consistent view of the distribution of household economic resources through income, consumption,
and wealth, in line with economy-wide totals. The application of distributional accounts is even
more significant during economic crises like the COVID-19 pandemic, where both the effects as well
as the mitigating policies can differ significantly across heterogeneous households. The OECD,
Eurostat, IMF, UN, and the World Bank joint effort is to provide household distributional
information, in line with the national accounts' totals, on the dimensions of income, consumption
and wealth. The new G20 Data Gaps Initiatives have as well incorporated recommendations.
Fintech and innovation
Technological changes are transforming the financial sector and the economy in general, offering
payment services, including cryptocurrencies, international remittances, and cross-border
payments and credit. With market innovations also come risks. Central banks should therefore
promote the global adoption of a revised classification of economic activities that takes greater
account of financial technology service providers, supporting the IFC's recommendation to revise
ISIC at the UN level.
When new entrants fall outside the perimeter of regulation, it can be difficult to assess risks,
including threats to resilience and financial stability. The advances in regulation can be leveraged
for statistical purposes and should allow us to move forward in measuring the services offered by
these non-bank or unregulated financial intermediaries. As regulation moves into focus into these
areas we should develop, for instance, financial inclusion indicators based on the digital financial
services offered by Fintech companies. Cryptoassets and digital currencies are another area where
regulation can be leveraged for statistical purposes.
International collaboration, data sharing, and the role of the IFC
I would like to end my remarks with a call for even closer cooperation.
To meet the future challenges of central bank statistics, we will need to continue fostering
international cooperation, towards the harmonization of standards and the exchange of learning
experiences. Articulating fruitful discussions and engaging the membership of the central bank
community will remain essential to achieve these goals. Improved collaboration between the
different bodies (OECD; IMF; Eurostat, CEMLA) is an important ingredient as well. Member
experiences in overcoming legal constraints to enable data exchange within and between countries
will be particularly useful.
Official statistics provide the required information and data for credible policy making by central
banks and other public institutions. Moreover, official statistics are also the fundamental basis for
trust by the public on the state of economic reality. Fostering this public trust in an age of
everincreasing complexity and diversity of data sources, and why not, fake news, remains critical. The
basic duties of agreed, standardized methods and criteria, comparable across time and space, is the
backbone of our profession. It will be an honor and a challenge to contribute to achieving these
ambitions during my tenure as IFC chairman.