REPORT FROM THE COMMISSION assessing the quality of data reported by Member States in 2014 on balance of payments, international trade in services and foreign direct investment
Date: 2016-03-30
Institutions: European Commission, European Union, Eurostat
Subjects: EU Member State, EU statistics, balance of payments, data collection, direct investment, economic statistics, exchange of information, foreign investment, international trade, service

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 30.3.2016  COM(2016) 163 final   REPORT FROM THE COMMISSION assessing the quality of data reported by Member States in 2014 on balance of payments, international trade in services and foreign direct investment {SWD(2016) 68 final}  
 
 
REPORT FROM THE COMMISSION 

assessing the quality of data reported by Member States in 2014 on balance of 
payments, international trade in services and foreign direct investment 

1. 

INTRODUCTION 

Article 4(3) of Regulation (EC) No 184/20051 states that: 

‘The quality of the data transmitted shall be assessed, on the basis of the quality reports, by 
the  Commission  with  the  assistance  of  the  Balance  of  Payments  Committee  referred  to  in 
Article 11(1). This assessment by the Commission shall be sent to the European Parliament 
for information.’ 

This  report  from  the  Commission  assesses  the  quality  of  data  on  the  balance  of  payments 
(BOP),  international  trade  in  services  statistics  (ITSS)  and  foreign  direct  investment  (FDI) 
that were reported by EU Member States in 2014 under Regulation (EC) No 184/2005. The 
Commission prepared this report with the assistance of the Balance of Payments Committee, 
as  required  under  Article  4(3)  of  the  Regulation,  and  based  it  on  the  results  of  the  quality 
assessment undertaken by Eurostat between January and July 2015. The quality assessment 
also  covered  the  European  Economic  Area  countries  of  Iceland  and  Norway,  but  the 
Commission’s report does not analyse the results for those countries. 

This  report  provides  a  short  description  of  the  principles  guiding  the  quality  assessment  of 
official  statistics.  It  then  goes  on  to  analyse  the  extent  to  which  BOP,  ITSS  and  FDI  data 
comply with the quality principles underlying the European Statistical System (ESS). 

This report focuses primarily on the requirements of Member States to compile and transmit 
BOP,  ITS  and  FDI  data  and  on  whether  or  not  Member  States  comply  with  their  legal 
obligations. It also provides information that can be used to assess the quality of these data, 
with particular emphasis on total aggregates and the major components needed to compile the 
aggregates. 

The accompanying Commission Staff Working Document on the quality of BOP, ITSS and 
FDI statistics transmitted by the Member States, Iceland and Norway in 2014 presents an in-
depth analysis of the results of quality assessment.   

2.  ASSESSING THE QUALITY OF OFFICIAL STATISTICS 

Every year Eurostat assesses the quality of BOP, ITSS and FDI data in accordance with the 
principles laid down in Commission Regulation (EC) No 1055/20082. It checks that the data 

1 Regulation (EC) 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 (OJ L 35, 8.2.2005, p. 23). 

2  Commission  Regulation  (EC)  No 1055/2008  of  27  October  2008  implementing  Regulation  (EC)  No 184/2005  of  the 
European Parliament and of the Council, as regards quality criteria and quality reporting for balance of payments statistics, 
OJ L 283, 28.10.2008, p. 3. 

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comply  with  the  seven  quality  criteria  in  Article 12(1)  of  Regulation  (EC)  No 223/2009  on 
European  statistics3,  namely:  i)  relevance;  ii)  accuracy;  iii)  timeliness;  iv)  punctuality;  v) 
accessibility  and  clarity;  vi)  comparability;  and  vii)  coherence.  Regulation  (EC) 
No 223/20094  was  amended  on  29 April 2015  to  strengthen  several  provisions,  including 
those on quality assessment. 

Over the years, Eurostat has worked hard to develop quality management methods and tools 
to  help  it  produce  high-quality  European  statistics.  Quality  reporting  underpins  quality 
assessment, which in turn is the starting point for improving quality. The ESS Handbook for 
quality  reports5  details  the  full  range  of  methods  that  can  be  used  to  assess  the  quality  of 
official statistics. The method used differs depending on the type of statistical process. 

The purpose of statistics is  to  produce  estimates of an unknown value.  Variability  and  bias 
mean that these estimates are not equal to the true values and that statistics may suffer from a 
vast range of sampling and non-sampling errors. 

An established theory for checking the accuracy of statistics based on sample surveys looks at 
variability,  i.e.  how  much  an  estimator  varies  around  its  expected  value.  Variability  is 
expressed by its variance, standard error, coefficient of variation and confidence intervals. 

BOP  statistics  (like  national  accounts)  are  compiled  through  an  accounting  framework  and 
are based on inputs from a variety of primary statistics, such as data on goods, services, and 
FDI.  Some  of  the  primary  statistics  are  based  on  sample  surveys,  some  are  derived  from 
administrative data, while some result from models. 

A  direct  approach  to  measuring  accuracy  is  not  possible  for  an  accounting  framework  like 
BOP.  According  to  general  principles  on  measuring  quality  in  statistics,  the  two  main 
instruments  that  should  be  used  are  the  analysis  of  revisions  (which  show  the  degree  of 
closeness of initial estimates to subsequent or final estimates) and the examination of errors 
and omissions.6 Both are covered by this report. 

While the quality of aggregated statistics is not the simple sum of the quality of all underlying 
primary  data,  the  quality  of  BOP  data  does  depend  on  the  quality  of  all  the  underlying 
primary data. Separate quality reports7 are regularly prepared for international trade in goods 
statistics.  As  provided  for  in  Regulations  (EC)  Nos 638/2004  and  471/2009,  these  statistics 
are  the  main  component  of  the  current  account.  Therefore,  only  ITSS  and  FDI  data  are 
assessed together with BOP data. 

3 Regulation (EC) No 223/2009 of the European Parliament and of the Council of 11 March 2009 on European statistics and 
repealing Regulation (EC, Euratom) No 1101/2008 of the European Parliament and of the Council on the transmission of 
data subject to statistical confidentiality to the Statistical Office of the European Communities, Council Regulation (EC) 
No 322/97  on  Community  Statistics,  and  Council  Decision 89/382/EEC,  Euratom  establishing  a  Committee  on  the 
Statistical Programmes of the European Communities, OJ L 87, 31.3.2009, p. 164. 

4 Cf. Regulation (EU) 2015/759 of the European Parliament and of the Council of 29 April 2015 amending Regulation (EC) 

No 223/2009 on European statistics, OJ L 123, 19.5.2015, p. 90. 

5 See ESS Handbook for quality reports, 2014 edition, http://ec.europa.eu/eurostat/en/web/products-manuals and-guidelines/-

/KS-GQ-15-003. 

6  See  ESS  Handbook  for  quality  reports,  2014  edition,  http://ec.europa.eu/eurostat/en/web/products-manuals-and-

guidelines/-/KS-GQ-15-003. 

7 See http://ec.europa.eu/eurostat/web/products-statistical-working-papers/-/KS-TC-14-009. 

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3.  SPECIFIC FEATURES OF THIS QUALITY ASSESSMENT 

This quality assessment is the first since the entry into force of Commission Regulation (EU) 
No 555/20128. Therefore, the country quality report covers data produced using the updated 
data  requirements  and  the  methodology  described  in  the  sixth  edition  of  the  International 
Monetary  Fund’s  Balance  of  Payments  and  International  Investment  Position  Manual 
(BPM6) (see Box 1).9 

Member  States  first  transmitted  data  on  BPM6-based  transactions  and  data  on international 
investment position (IIP) in June 2014. In accordance with the new requirements laid down in 
Commission  Regulation  (EU)  No 555/2012,  more  detail  is  now  available  on  transaction 
breakdowns, while the frequency and timeliness of the data have improved. As a result, final 
users now have a much better overview of BOP, IIP, ITSS and FDI data compared with the 
data  that  were  required  under  the  BPM5  methodology.  The  new  requirements  introduce  a 
new  dataset  on  monthly  BOP  for  the  Member  States.  In  addition  to  the  mandatory 
requirements,  national  compilers  now  transmit  voluntary  data  with  a  bilateral  geographical 
breakdown among EU countries and additional BOP items. 

Box 1. The sixth edition of the International Monetary Fund’s Balance of Payments and 
International Investment Position Manual (BPM6) 

The  BPM6  provides  the  standard  framework  for  compiling  statistics  on  transactions  and 
positions between an economy (individual country, currency union (such as the euro area) or 
economic union (such as the European Union)) and the rest of the world. It explains concepts, 
definitions, classifications and conventions for BOP and IIP statistics, enhances international 
comparability of data by promoting internationally adopted guidelines and shows the links to 
other  macroeconomic  statistics  in  order  to  promote  consistency  across  different  statistical 
domains.  The  BPM6  is  consistent  with  the  European  System  of  National  and  Regional 
Accounts 10 and the System of National Accounts 200811, which set the statistical framework 
for  national  accounts.  It  is  also  in  line  with  the  fourth  edition  of  the  OECD’s  Benchmark 
Definition  of  Foreign  Direct  Investment12,  which  provides  additional  guidelines  for  FDI 
statistics, and with the UN Manual on Statistics of International Trade in Services 2010. 

The BPM6 reflects changes that have occurred in the world economy since 1993. This period 
has been characterised by a significant increase in cross-border activity due to the reduction 
of  trade  barriers  and  capital  controls.  International  corporate  structures  have  become 
increasingly  complex,  with  value  chains,  financial  linkages  and  ownership  structures  at  a 
global level. Cross-border financial flows have also increased substantially owing to dynamic 
growth in international capital markets. Globalisation has given rise to new policy challenges 
and is the reason for many of the changes introduced by the BPM6. Because the transaction 

8  Commission  Regulation  (EU)  No 555/2012  of  22  June  2012  amending  Regulation  (EC)  No 184/2005  of  the  European 
Parliament and of the Council on Community statistics concerning balance of payments, international trade in services and 
foreign direct investment, as regards the update of data requirements and definitions (OJ L 166, 27.6.2012, p. 22). 

9  International  Monetary  Fund  Balance  of  Payments  and  International  Investment  Position  Manual,  Sixth  Edition, 

Washington D.C. (2009). See https://www.imf.org/external/pubs/ft/bop/2007/bopman6.htm. 

10 Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of 

national and regional accounts in the European Union (OJ L 174, 26.6.2013, p. 1). 

11 System of National Accounts adopted by the United Nations Statistical Commission, 

http://unstats.un.org/unsd/nationalaccount/sna2008.asp.. 

12 OECD Benchmark Definition of Foreign Direct Investment — 4th Edition, Paris (2008). 

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volumes  often  account  for  only  a  part  of  stocks,  the International  Investment  Position  (IIP) 
are often more useful as an indicator of the external financial situation of the economy. This 
is  reflected  in  the  new  title  ‘Balance  of  Payments  and  International  Investment  Position 
Manual’, which shows the growing importance of the IIP. 

The quality reports on BOP, ITS and FDI ensure regular monitoring of the stability and the 
consistency  of  the  data.  The  quality  report  template  was  amended  before  the  start  of  the 
quality  assessment  to  adapt  it  to  the  new  data  requirements  and  methodological  changes 
resulting  from  the  BPM6,  as  well  as  to  accommodate  the  scoreboard  quality  process 
introduced under the macroeconomic imbalances procedure. 

4.  MAIN FINDINGS OF THE QUALITY ASSESSMENT 

The Commission Staff Working Document attached to this report details the findings of the 
quality assessment for each quality criterion. This quality assessment was carried out with the 
assistance of the Balance of Payments Committee. 

The  amendment  of  Regulation  (EC)  No 184/2005  by  Commission  Regulation  (EU) 
No 555/2012 led to closer harmonisation of BOP, ITSS and FDI statistics throughout the EU 
and  broadened  the  data  collection  requirements  to  make  more  data  available  to  users.  The 
quality  of  the  statistical  domains  analysed  in  Commission  Staff  Working  Document  is 
generally satisfactory and meets the legal requirements. Nevertheless, some quality indicators 
differ between Member States, and the indicator levels could be improved. 

The  results  of  the  first  quality  assessment  after  the  introduction  of  the  BPM6  have  met 
Eurostat’s  expectations.  All  Member  States  except  Croatia  coped  generally  well  with  the 
changed  data  requirements  and  methodology.  The  quality  of  BOP  data  is  the  most 
satisfactory,  while  improvements  are  most  often  needed  in  FDI  statistics.  Based  on  the 
quality criteria used in the assessment, the overall results are detailed below. 

Relevance 

Data completeness was on average 96 % for both monthly and 
quarterly  BOP  data,  98 %  for  quarterly  IIP  data,  83 %  for 
quarterly revaluations, 95 % for ITSS and 91 % for FDI flows 
and stocks. 

27 Member States fully satisfied the requirements for monthly 
BOP data, while one country has not provided monthly BOP 
datasets.  Completeness  was  equal  to  or  over  95 %  for  26 
Member  States  as  regards  quarterly  BOP  data,  and  for  27 
Member  States  as  regards  quarterly  IIP  data.  Completeness 
was  equal  to  or  over  95 %  for  24  Member  States  as  regards 
ITSS, for 23 Member States as regards FDI stocks and for 19 
Member States as regards FDI flows. 

Data availability to final users was satisfactory, with 95 % or 
more  of  main  items  publishable.  This  was  the  case  for  18 
Member  States  as  regards  monthly  BOP  data,  20  Member 

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Accuracy 

States as regards quarterly BOP, 22 Member States as regards 
quarterly IIP, 14 Member States as regards ITSS, 12 Member 
States as regards FDI flows and 14 Member States as regards 
FDI  stocks.  Some  Member  States  excessively  flag  data  as 
‘non-publishable’  or  as  ‘confidential’.  Eurostat  has  been  in 
contact  with  those  Member  States,  and  cooperates  with 
national  authorities  to  increase  the  amount  of  publishable 
data. This has already led to improvements compared with the 
situation presented in this report. 

Croatia  stands  in  sharp  contrast  to  the  overall  good  results, 
especially in the terms of data completeness.13 

We  must  consider  the  analysis  of  revisions  in  this  report  as 
very  preliminary  because  of  the  limited  availability  of  the 
BPM6  data  vintages,  with  only  one  set  of  the  revised 
quarterly data transmitted so far. 

We  observed  only  small  revisions  in  monthly  and  quarterly 
current account items, indicating stable estimates. The relative 
magnitude of the revisions was larger for primary income and 
financial accounts items. The lower stability is due mainly to 
the difficulty in estimating reinvested earnings. The indicator 
on directional reliability shows a good level  of predictability 
in  the  first  assessments  for  monthly  BOP  data.  Revisions  of 
annual  data  were  not  analysed  in  this  quality  assessment  as 
vintages of data for annual ITS and FDI were not available. 

Timeliness and punctuality  The timeliness of monthly BOP, quarterly BOP and quarterly 
IIP data improved gradually from the first preliminary BPM6 
transmission in June 2014 to the most recent analysed datasets 
with  deadlines  on  15  and  23 December 2014.  24  Member 
States  sent  ITS  data  before  or  on 
the  deadline  of 
30 September 2014,  while  23  Member  States  first  sent  FDI 
data before, on or within three days of the official deadline. 

Comparability 

Coherence 

Asymmetries  for  current  account  components  improved 
during  the  reference  periods.  Owing  to  shorter  available 
financial account time series for the EU aggregates, it was not 
possible to analyse the asymmetries for financial account. The 
experience  of  the  European  FDI  Network  shows  that  data 
exchange  between  countries  can  actually  help  to  solve 
asymmetries, but several preconditions must first be met. 

The overall consistency over integrity rules improved slightly. 
However, Eurostat was sometimes not in a position to fix the 
problems it had detected and had to request transmissions of 
corrected datasets from national compilers. There were almost 

13 Croatia made its monthly BOP data available in October 2015, i.e. after the end of the quality exercise. 

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no discrepancies between the quarterly and annual ITSS data, 
while  there  were  some  differences  between  quarterly  and 
annual  FDI  flows  and  income.  These  inconsistencies  can 
usually  be  explained  by  delays  in  the  revision  of  quarterly 
series following the annual surveys. 

Member States have worked hard to reduce the size of errors 
and omissions. The average relative error indicator for errors 
and omissions recorded values equal to or higher than 5 % for 
6  Member  States,  while  for  8  Member  States  the  figure  was 
0 %  or  1 %  for  all  periods  analysed.  The  indicator  on  the 
cumulated relative sum of errors and omissions showed lower 
results  for  all  countries  with  higher  values  of  errors  and 
omissions. 

The  directional  consistency  of  BOP  statistics  and  ITGS 
remains high. However, a few Member States did not achieve 
the expected degree of consistency. 

The overall quality of data transmitted pursuant to Regulation 555/2012 is good. However, all 
Member States need to address the remaining outstanding deficiencies. Member States should 
also  bear  in  mind  that  this  first  assessment  could  not  explore  all  the  dimensions  of  data 
quality  and  that  the  sound  and  full  implementation  of  the  new  methodology  is  yet  to  be 
analysed. However, Eurostat has already started this analysis in cooperation with the Member 
States in the Balance of Payments Working Group. Eurostat and the European Central Bank 
are  also  visiting  Member  States  to  address  country-specific  issues.  Particular  attention  and 
support will be provided to Croatia. 

As a result of growing data needs, in particular in the wake of the financial crisis, BOP, IIP, 
ITS and FDI data are under increased scrutiny by users. Eurostat and national compilers are 
making every effort to ensure that these data fully meet the needs of a wide circle of users. 

On the basis of this quality assessment, Eurostat makes the following main recommendations 
to Member States: 

  Some  countries  still  need  to  improve  data  completeness  in  order  to  comply  with 

Regulation (EC) No 184/2005. 

  Countries which continue to flag a substantial proportion of data as ‘confidential’ or 
‘non-publishable’  should  apply  the  confidentiality  rules  laid  down  in  Regulation 
(EC)  No 223/2009.  Flagging  data  as  confidential  or  non-publishable  in  a  more 
restrictive  way  than indicated  by the  Regulation  significantly  decreases the  value  of 
statistical  information  provided  to  users  and  prevents  appropriate  policy  analysis 
based on European statistics. 

  Persisting data asymmetries should be reduced. Asymmetries remain a problem both 
in  Europe  and  around  the  world.  Eurostat  encourages  Member  States  to  make  more 
use of the FDI Network and bilateral contacts to reconcile other BOP items. 

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  The  size  of  errors  and  omissions  should  be  reduced.  This  remains  a  substantial 
challenge  for  a  number  of  countries.  Eurostat  encourages  Member  States  to 
investigate the reasons for high values of errors and omissions and to take action to 
eliminate them. 

The Commission will again address the quality of data on balance of payments, international 
trade in services and foreign direct investment after the next quality assessment round starting 
in January 2016. 

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