On September 30 of 2011 National Bank of Georgia (NBG) published updated information on external sector statistics. Minor changes and updates of information are common, but this time we wanted to point to the significant differences between the new data and the old publications. One major difference is the Balance of Payments (BOP) statistics for 2000-2001. With updating the 2000-2001 BOP statistics NBG concluded the multiple years’ work on presenting BOP statistics according to the framework of Balance of Payments Manual fifth edition (BPM5). Another topic is International Investment Position (IIP), where data was covered from 2006 and now it starts from 2000. And finally, significant changes are made in 2010 data of BOP, IIP and external debt. Main differences are due to nonfinancial corporations’ data.

Currently data series for BOP is available on NBG website and it covers data from 1995, but format of 1995-2001 BOP was not presented according to the framework prescribed by BPM5 as recommended by IMF, it was much simpler. Moreover, it only partially followed BPM5 recommendations. Operational changes in many cases included exchange rate changes. There was problem of coverage, and as a result in some years errors and omissions comprised a significant share of current account. Therefore, it was decided to re-estimate BOP of 2000-2001, to compile it according to the guidelines of BPM5 as recommended by IMF. 2000 was benchmark year where more or less reliable data was collected. At the first stage the external debt of public sector was revised and data series was created from 31 December of 1999. According to external debt statistics requirements operational, exchange rate, price and other changes were separated. Also, accrual interest was calculated along with principal. Each loan was given in original currency as well as in equivalent USD. Second stage was to collect information on banking sector operations. Based on collected information IIP of banking sector was compiled. Series start from 31 December of 1999. Large items of BOP, such as goods, transportation crevices and tourism were estimated as in subsequent years. As for smaller components, not included in 2000-2001 initial BOP, they were estimated according to subsequent years’ tendencies. As BOP division shifted to NBG, reserve assets and other operations of NBG are monitored very precisely. In our database daily operations are in original currency, and they are calculated in USD using exchange rate of transaction’s date. That enables us to calculate accurately operational and exchange rate changes. BOP data on reserve assets of 2000-2001, where operational and exchange rate changes were not separated, was replaced by new data. In some quarters difference accounted to as much as 50 percent, but in average to about 20-36 percent. In initial BOP of 2000-2001 there was one item for foreign currency. It was further subdivided to following items: cash and deposits in central banks; cash and deposits in commercial banks and cash equivalent. Information on treasury bills held by non-residents was collected and added to BOP.

In 2000-2001 BP-s role for Georgian economy was very important. BP provided us with information on operations in years 2000-2001. Particularly, volume of oil transit through pipeline and expenses associated with it. That information was added to BOP as well.

After correcting BOP statistics it was decided for IIP statistics also to start from 2000. Government, NBG, and banking sector data for IIP compilation were already available. Additionally we collected data from nonbanking financial institutions. Still problematic was nonfinancial corporations’ data. But operations of this sector were already available. We estimated main currency proportions (USD/EUR) from banking sector data. After that we estimated exchange rate changes for nonfinancial corporations. On the other hand we already had information on assets and liabilities of nonbanking corporations for 31 December of 2005. That enabled us to estimate components of IIP for 2000-2005. In nearest future we are going to re-estimate those tables according to BPM6.

As for changes in 2010 data, it was mainly due to updating of preliminary data of Geostat by adjusted data. Geostat is conducting quarterly non-financial enterprises survey of foreign economic activity. After five months of end of reporting year they conduct yearly survey as well. Based on quarterly survey preliminary data is estimated, while based on annual survey final adjusted data is calculated, that is published in August. Adjusted BOP, IIP and external debt statistics of 2010 is based on the annual survey. In many cases adjusted data is significantly different from preliminary data. In 2010 the most significant differences were in FDI numbers - 549 million USD (914 million GEL) according to preliminary information and 814 million USD (1356 million GEL) according to adjusted data. Therefore, significant adjustments took place in all components of FDI: equity capital; reinvestment and other capital of FDI. Those adjustments affected other components of BOP as well. Hence, current account deficit of 2010 increase from 1116.5 million USD (from1859.5 million GEL) to 1333.0 million USD (to 2220.0 million GEL)