## 1. Data Quality Assessment Framework July 2003—Summary Results ## Source details **Canonical URL:** [1. Data Quality Assessment Framework July 2003—Summary Results](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05414.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05414.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05414.pdf.json) --- ### Overall assessment — main conclusions - Iceland subscribed to the Special Data Dissemination Standard (SDDS) on June 21, 1996 and started posting its metadata on the Dissemination Standards Bulletin Board (DSBB) on April 16, 1998. - Iceland has been in observance of the SDDS since June 30, 2004, meeting the specifications for coverage, periodicity, and timeliness, and using a flexibility option on the timeliness and periodicity for the production index and the producer price index (PPI). - Macroeconomic statistics are generally of high quality and adequate for effective surveillance, with high quality awareness among statistical managers. - Noted deficiencies and risks: - Periodicity and timeliness issues for the PPI. - Timeliness issues for central government finance statistics. - Concentration of responsibilities in a few staff resources creates potential vulnerabilities; in many cases only one person works on a specific sector. - Scope and methodological gaps: national accounts income accounts not compiled; scope for NA, PPI, and GFS should be broadened. - Need to ascertain residency of holders of currency-linked and indexed bonds issued by resident commercial banks for proper classification in monetary statistics. - Differences in methodology between CBI and SI for exports and imports of goods need clarification. - Legal and institutional environment: - Multiple laws define statistical activity (Act on Statistical Reports of 1895; Act on Statistics Iceland of 1913; Regulation of the Central Government Administration of 2004; Act on the Central Bank of Iceland of 2001). - Legal framework adequate for collection, compilation, and dissemination, including mandatory response procedures, confidentiality protection, and penalties. - Legal authority is spread over multiple acts and regulations; recommendation to consolidate and strengthen statistical legislation and clearer interagency coordination powers. - Staffing and resources: - In most instances staff resources are adequate, but need strengthening to expand the scope of national accounts, further develop methodologies and documentation, and meet European statistical requirements. - Current staffing levels leave compilation and dissemination relatively vulnerable. - Professionalism, transparency, and ethics: - Agencies adhere to objectivity and provide documented practices ensuring professionalism and impartiality. - Practices to inform in advance about methodological changes could be improved at the Central Bank of Iceland (CBI). - Serviceability, accuracy, and accessibility: - Most statistics available with adequate periodicity and timeliness; recent user survey confirms broad serviceability. - Consistency among balance of payments, GFS, and monetary statistics could be improved. - Metadata documentation needs improvement for some datasets (concepts, scope, classifications, basis for recording, data sources, techniques). ### DQAF-based findings (selected element-level results) - Key to symbols used: O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; NA = Not Applicable. - Dimension 0 — Prerequisites of quality: - 0.1 Legal and institutional environment: National Accounts LO; CPI LO; PPI LO; Government Finance Statistics LO; Monetary Statistics O; Balance of Payments Statistics O. - 0.2 Resources: All six datasets rated LO. - 0.3 Relevance and 0.4 Other quality management: National Accounts O O; CPI O O; PPI O O; GFS O O; Monetary Statistics LO O; Balance of Payments Statistics LO O. - Dimension 1 — Assurances of integrity: - 1.1 Professionalism: all six datasets O. - 1.2 Transparency: National Accounts O; CPI O; PPI O; GFS O; Monetary Statistics LO; Balance of Payments Statistics LO. - 1.3 Ethical standards: all six datasets O. - Dimension 2 — Methodological soundness: - 2.1 Concepts and definitions: National Accounts O; CPI O; PPI O; GFS O; Monetary Statistics LO; Balance of Payments Statistics O. - 2.2 Scope: National Accounts LO; CPI O; PPI LO; GFS LO; Monetary Statistics O; Balance of Payments Statistics O. - 2.3 Classification/sectorization: National Accounts O; CPI O; PPI O; GFS O; Monetary Statistics LO; Balance of Payments Statistics LO. - 2.4 Basis for recording: National Accounts LO; CPI O; PPI O; GFS LO; Monetary Statistics LO; Balance of Payments Statistics O. - Dimension 3 — Accuracy and reliability: - 3.1 Source data: National Accounts LO; CPI O; PPI O; GFS LO; Monetary Statistics LO; Balance of Payments Statistics LO. - 3.2 Assessment of source data: all six datasets O. - 3.3 Statistical techniques: National Accounts LO; CPI O; PPI O; GFS O; Monetary Statistics O; Balance of Payments Statistics O. - 3.4 Assessment and validation of intermediate data and outputs: National Accounts LO; CPI O; PPI O; GFS O; Monetary Statistics O; Balance of Payments Statistics O. - 3.5 Revision studies: all six datasets O. - Dimension 4 — Serviceability: - 4.1 Periodicity and timeliness: National Accounts O; CPI O; PPI LNO; GFS LO; Monetary Statistics O; Balance of Payments Statistics O. - 4.2 Consistency: National Accounts LO; CPI O; PPI LO; GFS LO; Monetary Statistics LO; Balance of Payments Statistics LO. - 4.3 Revision policy and practice: National Accounts LO; CPI O; PPI LO; GFS LO; Monetary Statistics LO; Balance of Payments Statistics LO. - Dimension 5 — Accessibility: - 5.1 Data accessibility: National Accounts O; CPI O; PPI O; GFS LO; Monetary Statistics LO; Balance of Payments Statistics O. - 5.2 Metadata accessibility: National Accounts LO; CPI LO; PPI LO; GFS LO; Monetary Statistics LNO; Balance of Payments Statistics LNO. - 5.3 Assistance to users: all six datasets O. ### Agency- and dataset-specific highlights - Central Bank of Iceland (CBI) and Statistics Iceland (SI): - Legal authority and data-sharing arrangements are in place; legal framework is spread across multiple acts and regulations rather than consolidated. - CBI needs to improve advance notification of methodological changes. - SI investigating differing behavior of CPI and the deflator for household final consumption expenditure. - National Accounts (NA): - Compiled according to 1995 ESA. - Income accounts are not compiled; scope should be broadened. - Annual accounts do not include income or higher order accounts. - Quarterly estimates are not benchmarked to annual estimates; production and expenditure volume measures use different techniques. - NA staff: National Accounts Department has 12 staff comprising 11.2 full-time equivalents. - Timeliness: quarterly accounts meet SDDS; quarterly GDP by type of activity compiled 21 months after the end of the period; plan to shorten to 15 months. - Consumer Price Index (CPI): - CPI concepts and definitions in accordance with 1995 ESA and the CPI Manual. - Timeliness: published monthly on the eighth working day after the end of the month (exceeds SDDS requirement). - Weights: HES continuous with a three-year cycle; HES sample 1,200 households each year; response rate about 55 percent; by 2002, 77 percent of HES entries taken from cash register receipts. - CPI weights revised annually; CPI series not revised after publication. - Producer Price Index (PPI): - PPI broadly follows 1995 ESA and PPI Manual. - Scope currently covers manufacturing products and exported fish products; manufacturing PPI commenced in fourth quarter 2003; fish products index in 1986. - Periodicity/timeliness do not meet SDDS requirements: PPI compiled monthly but published quarterly; published 45 days after the end of the quarter. - Coverage: PRODCOM survey: about 600 enterprises, accounting for about 97 percent of total industrial turnover; PPI data collection about 23,000 price observations per month; current PPI data collection covers about 40 percent of total turnover for manufacturing. - Staff: total PPI staff slightly fewer than two full-time equivalents; manufacturing PPI staff allocation approximately 1.5 full-time equivalents; fish products PPI about 0.3 full-time equivalents. - Government Finance Statistics (GFS): - SI compiles annual general government, central government, and local government statistics in accordance with 1995 ESA and ESA Manual on Government Deficit and Debt. - SI publishes annual balance sheet for local governments, but only the annual financial balance sheet of the central government. - Timeliness: Iceland meets SDDS periodicity and timeliness for general government operations data, but not the timeliness requirement for monthly central government operations. - Source gaps: SI has not been receiving source data to compile financing data for local and general government sector since 2001; efforts underway to resume. - Staffing vulnerability: two employees compile macroeconomic GFS; vulnerability to staff turnover. - Monetary statistics: - Concepts broadly conform to MFSM; departures: monetary aggregates include deposits of the foreign sector and the central government. - Residency of holders of currency-linked and indexed bonds needs ascertaining; recommendation implemented by authorities. - Source data: monthly balance sheet of the CBI and individual monthly reports by DMBs; compilation highly automated. - Periodicity and timeliness: in line with SDDS requirements. - Consistency issues: monetary statistics not consistent with balance of payments and GFS. - Staffing: Statistics Department has nine staff; one staff assigned to monetary compilation; recommendation to add staff for methodological work and metadata. - Balance of Payments (BOP): - BOP broadly in line with BPM5 concepts. - Main data source ITRS; ITRS covers more than 50 percent of services but has coverage and classification weaknesses. - Interest payments often recorded on a due-for-payment basis rather than accrual. - Periodicity and timeliness: quarterly BOP data disseminated within 10 weeks after the end of the reference quarter (SDDS deadline 12 weeks). - Revisions: CBI revises recent and historical statistics as soon as revised data are provided by respondents; users not informed about revision policy; recommendations to improve revision communication. ### Observations on serviceability, user feedback, and international context - Recent user survey confirms broad adequacy of serviceability, but users expressed concerns: - Relevance because of rapid structural changes in the economy and unexplained structural breaks. - Need for expanded statistics on services sector and more disaggregated financial assets and liabilities as financial system expands. - Iceland’s membership in the European Statistical System (ESS) influences statistical policies; significant share of data produced consistent with European legal requirements. - CBI monitors large projects (aluminum and hydropower) for macroeconomic and inflationary impacts. ### Selected numeric and timetable facts (preserved) - SI staff: 97 full-time equivalent employees; National Accounts Department: 12 staff comprising 11.2 full-time equivalents. - HES: sample of 1,200 household units each year; actual responding households over three-year period approximately 1,900; response rate about 55 percent. - CPI price collection: approximately 19,000 prices collected each month for about 4,200 items from around 450 outlets. - PPI PRODCOM survey (reference year 2003): covered about 600 enterprises, accounting for about 97 percent of total industrial turnover. - PPI publication lag: published 45 days after the end of the quarter (does not meet SDDS requirement of 1M). - Quarterly NA dissemination: within 80 days of the end of the period (meets SDDS requirement). - GDP by type of activity compiled 21 months after the end of the period; plan to shorten to 15 months. - Monetary data compilation: monthly analytical accounts of the CBI and the DMBs produced within 21-23 days after the end of the reference month. - ITRS simplification threshold historical values: ISK 400,000 in 1995, raised to 700,000 in 1998. - Balance of payments timeliness: quarterly BOP data disseminated within 10 weeks after end of the reference quarter (SDDS deadline 12 weeks). - DQAF assessment symbols and dataset-level ratings as listed in the DQAF-based findings section above. ### Cross-cutting and dataset-specific recommendations (summary) - Consolidate and strengthen statistical legislation into a single statistical act and assign coordination authority to SI. - Strengthen staff resources and back-up arrangements to: - Expand scope of national accounts (including income accounts and capital account). - Expand scope and periodicity/timeliness of the PPI (move from quarterly to monthly) and broaden coverage beyond manufacturing and fish products. - Improve GFS staffing and compile annual balance sheets for central government and consolidated general government. - Provide additional staffing for monetary statistics to undertake methodological reviews, prepare metadata, and advance methodological work. - Improve periodicity and timeliness practices for: - PPI (from quarterly to monthly and disseminate within 1M). - Central government operations monthly dissemination to meet SDDS timeliness. - Improve metadata documentation and accessibility: - Prepare detailed documentation for PPI and NA constant price estimation and quarterly compilation; translate metadata into English where missing. - Ensure Summary Methodology (SM) statements are provided and posted on the DSBB. - Provide nontechnical guides (e.g., a 20-page CPI guide in Icelandic and English). - Improve reconciliation and methodological clarity: - Ascertain residency of holders of currency-linked and indexed bonds and classify as domestic/foreign liabilities. - Reconcile differences between CBI and SI methodology for exports and imports of goods. - Reconcile monetary statistics with balance of payments and GFS through regular bilateral meetings. - Improve revision practices and transparency: - Clearly indicate revised data in publications using annotations. - Explain causes for revisions (particularly BOP) and inform users of revision policy. - Consider conducting routine revision studies (subject to staff resources). *Italic: Source — Excerpts from the IMF Report on the Observance of Standards and Codes (ROSC)—Data Module and Authorities’ responses as presented in the provided content.* ### 1. Data Quality Assessment Framework July 2003—Summary Results.................................8 ### 1. Data Quality Assessment Framework July 2003—Summary Results ### Overall assessment — main conclusions - Iceland subscribed to the Special Data Dissemination Standard (SDDS) on June 21, 1996 and started posting its metadata on the Dissemination Standards Bulletin Board (DSBB) on April 16, 1998. - Iceland has been in observance of the SDDS since June 30, 2004, meeting the specifications for coverage, periodicity, and timeliness, and using a flexibility option on the timeliness and periodicity for the production index and the producer price index (PPI). - Iceland generally meets the requirements regarding advance release calendars, but: - There are delays in dissemination of data on central government operations and central government debt. - Advance release dates posted for these data categories are tentative. - Summary methodology (SM) statements in a number of data categories are neither provided nor posted on the DSBB. - Macroeconomic statistics are generally of high quality and adequate for effective surveillance, with high quality awareness among statistical managers. - Noted deficiencies and risks: - Periodicity and timeliness issues for the PPI. - Timeliness issues for central government finance statistics. - Concentration of responsibilities in a few staff resources creates potential vulnerabilities. - Scope and methodological gaps exist in certain datasets (national accounts income accounts not compiled; scope for NA, PPI, and GFS should be broadened). - Need to ascertain residency of holders of currency-linked and indexed bonds issued by resident commercial banks for proper classification in monetary statistics. - Differences in methodology between CBI and SI for exports and imports of goods need clarification. - Legal and institutional environment: - Multiple laws define statistical activity (Act on Statistical Reports of 1895; Act on Statistics Iceland of 1913; Regulation of the Central Government Administration of 2004; Act on the Central Bank of Iceland of 2001). - Legal framework adequate for collection, compilation, and dissemination, including mandatory response procedures, confidentiality protection, and penalties. - The legal authority is spread over multiple acts and regulations; mission recommends consolidation and strengthening of statistical legislation and clearer interagency coordination powers. - Staffing and resources: - In most instances staff resources are adequate, but need strengthening to expand the scope of national accounts, further develop methodologies and documentation, and meet European statistical requirements. - Current staffing levels leave compilation and dissemination relatively vulnerable; in many cases only one person works on a specific sector. - Professionalism, transparency, and ethics: - Agencies adhere to objectivity and provide documented practices ensuring professionalism and impartiality. - Practices to inform in advance about methodological changes could be improved at the Central Bank of Iceland (CBI). - Serviceability, accuracy, and accessibility: - Most statistics available with adequate periodicity and timeliness; recent user survey confirms broad serviceability. - Consistency of balance of payments statistics and government finance statistics (GFS) with monetary statistics could be improved. - Most datasets provide clear revision schedules and identify provisional estimates, but explanations of revisions (e.g., balance of payments) are sometimes inadequate and revised data are not always clearly identified in publications. - All datasets are readily available electronically; dissemination practices are very good and most statistics are released simultaneously to all users. - Metadata documentation needs improvement for some datasets (concepts, scope, classifications, basis for recording, data sources, techniques). ### DQAF-based findings (summary of Table 1) - Key to symbols used: O = Practice Observed; LO = Practice Largely Observed; LNO = Practice Largely Not Observed; NO = Practice Not Observed; NA = Not Applicable. - Selected element-level results (dimensions/elements and dataset outcome symbols as presented): - Dimension 0 — Prerequisites of quality: - 0.1 Legal and institutional environment: National Accounts LO; CPI LO; PPI LO; Government Finance Statistics LO; Monetary Statistics O; Balance of Payments Statistics O. - 0.2 Resources: All six datasets rated LO. - 0.3 Relevance and 0.4 Other quality management: National Accounts O O; CPI O O; PPI O O; GFS O O; Monetary Statistics LO O; Balance of Payments Statistics LO O. - Dimension 1 — Assurances of integrity: - 1.1 Professionalism: all six datasets O. - 1.2 Transparency: National Accounts O; CPI O; PPI O; GFS O; Monetary Statistics LO; Balance of Payments Statistics LO. - 1.3 Ethical standards: all six datasets O. - Dimension 2 — Methodological soundness: - 2.1 Concepts and definitions: National Accounts O; CPI O; PPI O; GFS O; Monetary Statistics LO; Balance of Payments Statistics O. - 2.2 Scope: National Accounts LO; CPI O; PPI LO; GFS LO; Monetary Statistics O; Balance of Payments Statistics O. - 2.3 Classification/sectorization: National Accounts O; CPI O; PPI O; GFS O; Monetary Statistics LO; Balance of Payments Statistics LO. - 2.4 Basis for recording: National Accounts LO; CPI O; PPI O; GFS LO; Monetary Statistics LO; Balance of Payments Statistics O. - Dimension 3 — Accuracy and reliability: - 3.1 Source data: National Accounts LO; CPI O; PPI O; GFS LO; Monetary Statistics LO; Balance of Payments Statistics LO. - 3.2 Assessment of source data: all six datasets O. - 3.3 Statistical techniques: National Accounts LO; CPI O; PPI O; GFS O; Monetary Statistics O; Balance of Payments Statistics O. - 3.4 Assessment and validation of intermediate data and outputs: National Accounts LO; CPI O; PPI O; GFS O; Monetary Statistics O; Balance of Payments Statistics O. - 3.5 Revision studies: all six datasets O. - Dimension 4 — Serviceability: - 4.1 Periodicity and timeliness: National Accounts O; CPI O; PPI LNO; GFS LO; Monetary Statistics O; Balance of Payments Statistics O. - 4.2 Consistency: National Accounts LO; CPI O; PPI LO; GFS LO; Monetary Statistics LO; Balance of Payments Statistics LO. - 4.3 Revision policy and practice: National Accounts LO; CPI O; PPI LO; GFS LO; Monetary Statistics LO; Balance of Payments Statistics LO. - Dimension 5 — Accessibility: - 5.1 Data accessibility: National Accounts O; CPI O; PPI O; GFS LO; Monetary Statistics LO; Balance of Payments Statistics O. - 5.2 Metadata accessibility: National Accounts LO; CPI LO; PPI LO; GFS LO; Monetary Statistics LNO; Balance of Payments Statistics LNO. - 5.3 Assistance to users: all six datasets O. ### Agency- and dataset-specific highlights - Central Bank of Iceland (CBI) and Statistics Iceland (SI): - Legal authority and data-sharing arrangements are in place; however, the legal framework is spread across multiple acts and regulations rather than consolidated. - CBI needs to improve advance notification of methodological changes. - SI investigating concerns about differing behavior of CPI and the deflator for household final consumption expenditure. - National Accounts: - Income accounts are not compiled; scope should be broadened. - Staff resources need strengthening to expand scope and meet European requirements. - Producer Price Index (PPI) and Production Index: - Issues with periodicity and timeliness; flexibility option used under SDDS. - Government Finance Statistics (GFS): - Timeliness concerns for central government operations and central government debt dissemination. - Scope should be broadened. - Monetary statistics: - Need to ascertain residency of holders of currency-linked and indexed bonds issued by resident commercial banks for correct domestic/foreign classification. - Consistency with balance of payments and GFS could be improved. - Balance of Payments: - Differences in CBI and SI methodology for exports and imports of goods require clarification. - Revision explanations sometimes insufficient; revisions affect historical data and are not always clearly identified. ### Observations on serviceability, user feedback, and international context - Recent user survey confirms broad adequacy of serviceability, but: - Users expressed concerns about relevance because of rapid structural changes in the economy and unexplained structural breaks. - Statistics mainly cover traditional sectors; growing importance of services sector suggests need for expanded statistics. - Rapid expansion of the financial system calls for more disaggregated information on composition of financial assets and liabilities. - Iceland’s membership in the European Statistical System (ESS) influences statistical policies and practices; a significant share of data produced and disseminated consistent with European legal requirements. - CBI monitors large projects (aluminum and hydropower) closely for macroeconomic and inflationary impacts; adequate data sources are important for policy decisions. ### Key recommendations (implied by findings) - Consolidate and strengthen statistical legislation into a single statistical act to clarify authority and interagency coordination. - Strengthen staff resources to: - Expand the scope of national accounts (including compilation of income accounts). - Further develop methodologies and documentation. - Meet European statistical requirements and provide more disaggregated financial statistics. - Improve periodicity and timeliness practices for the PPI and central government finance statistics. - Improve metadata documentation (concepts, scope, classifications, basis for recording, data sources, and statistical techniques) and ensure summary methodology (SM) statements are provided and posted on the DSBB. - Clarify methodologies and reconcile differences between CBI and SI for exports and imports of goods. - Ascertain residency of holders of currency-linked and indexed bonds issued by resident commercial banks to ensure correct classification in monetary statistics. - Enhance practices for explaining revisions, including clearer identification of revised data in publications and fuller explanations of revision causes (especially for balance of payments). *1. Data Quality Assessment Framework July 2003—Summary Results* ### 0. Prerequisites of quality ### 0. Prerequisites of quality ### Assurances of integrity — Central Bank of Iceland (CBI) - Legal and institutional environment - The CBI collects, compiles, and disseminates monetary and balance of payments statistics. - Legal authority to compile data from banks comes from the Act on the Central Bank of Iceland (No. 36; May 22, 2001) (CBI Act). - The CBI Act provides the CBI with the authority to collect and compile data from banks for monetary and balance of payments statistics purposes, but it only refers to the CBI’s obligation to disseminate monetary statistics. - The CBI has a sound tradition to disseminate quarterly and annual balance of payments statistics on a regular basis. - Reporting by banks is mandatory. - The CBI Act does not explicitly state that the individual reporters’ data will be kept confidential; however, the secrecy rules of the CBI and the CBI Staff Rules implicitly provide for such confidentiality. - Existing data-sharing arrangements with the Financial Supervisory Authority (FME) are well coordinated and formalized through the CBI Act and the 2003 bilateral cooperation agreement between the CBI and the FME. - For balance of payments statistics, the 2001 Foreign Exchange Act ensures that banks report on crossborder and crosscurrency payments on own account and on behalf of resident clients; provision for confidentiality is made. - Resources - Staff resources are adequate to compile monetary and balance of payments statistics. - The compilation of monetary and (to a lesser extent) balance of payments statistics is highly automated. - Computer facilities are adequate. - Except for on-the-job training, the staff receive no formal training. - Staff resources may need to be strengthened to meet the needs of the expanding financial system, the increasing statistical demands as a member of the EEA, and the need to undertake methodological reviews, prepare metadata, and further advance the methodological work. - Relevance - The CBI monitors the relevance of monetary and balance of payments statistics through requests from other departments and from data users (through enquiries made by e-mail or personal contact). - Staff members attend meetings with international statistical organizations. - There are no formal meetings with users outside the CBI. - There are no user advisory groups. - Other quality management - The CBI has well-established processes to focus on quality management, such as measures to monitor and review the quality of ongoing activities. - Professionalism - Staff at the CBI maintain a high degree of professionalism. - Statutory provisions in the CBI Act provide the legal basis for institutional independence in compiling statistics. - Professionalism is actively promoted and supported within the organization. - The recruitment process furthers professionalism. - Transparency - Transparency is fostered by the public availability of the CBI Act and other rules from the CBI. - The CBI’s website lists publications and carries background information on the CBI. - No outside agency other than the FME has access to data on individual reporters. - The CBI shares with the FME the most recent data of individual reporters only after the monetary statistics, for a given month, are released to the public. - Statistical publications clearly identify the CBI as the source. - Tables on monetary and balance of payments statistics presented on the CBI’s website show the CBI’s Statistics Department as the source for these tables. - Advance notice to the public is not given of major changes in methodology, source data, and statistical techniques; the changes are indicated in the publications once they are introduced. - Ethical standards - Clear and comprehensive ethical standards are set out in the General Staff Rules and Ethical Code for Employees of the Central Bank of Iceland. - The staff are also required to sign the “Employee’s Pledge” when they join the CBI. ### Assurances of integrity — Statistics Iceland (SI) - Legal and institutional environment - SI collects and compiles NA, CPI, and PPI statistics, as well as GFS, and compiles data on foreign trade statistics. - The Act on Statistical Reports No. 29 of 1895 and the Statistics Act of 1913 give SI the authority to compile and disseminate official statistics. - The Act on the Consumer Price Index No. 12 of 1995 provides for the compilation by SI of a monthly CPI. - SI functions are also stipulated in the Regulation on Central Government Administration No. 3 of 2004, which outlines the responsibilities of all government ministries. - The Regulation gives SI the responsibility to coordinate official statistics; however, this responsibility is not supported by the relevant authority in the Statistics Act, so the agency does not have the power to instruct other government bodies on the use of classifications or the dissemination of the statistics. - The Statistics Act contains no specific provisions for maintaining the confidentiality of data; SI has implemented special guidelines for staff in the Rules and Procedures for Treating Confidential Data (dated October 8, 2004). - The Statistics Act authorizes the agency to collect all information it deems necessary for the fulfillment of its duties. - Resources - Although the staff complement is of moderate size, the staff resources are not commensurate with the need to maintain the current compilation system and to meet international statistical requirements. - Current staffing arrangements may render the compilation system vulnerable in the event of unexpected staff turnover. - Relevance - Staff members conduct regular discussions with users in the MOF and the CBI. - There is an advisory group on the CPI, and SI recently established a user advisory group on national accounts, including public finances. - The CPI Committee does not have a broad representation of users. - The views of a broad cross section of users are not solicited systematically such as through user surveys. - SI staff members meet with major users of the CPI periodically. - Other quality management - There is no formal quality management program but quality is very much emphasized within SI and discussed in planning meetings. - Regular monitoring of timeliness and response rates occurs. - Professionalism - The Regulation on Central Government Administration promotes professionalism and effectively prohibits interference from outside SI by stipulating specific tasks and responsibilities. - The current Director-General (DG) has a lifetime appointment and cannot be removed except if he breaches the public service rules of conduct. - The revised Government Employees Act of 2004 stipulates that the DG be appointed for a fixed, renewable term of five years; future appointees will be bound by these regulations. - The DG has the sole authority to appoint staff based on the guidelines of the Government Employees Act; staff are recruited based on specific requirements and are appointed for an indefinite period. - The DG is the final authority on statistical matters and is free to comment on erroneous interpretations of the statistics. - Directors of the various divisions have authority to comment directly to the media on the statistics compiled by their divisions without seeking clearance from the DG. - Transparency - The terms and conditions for compiling statistics are disseminated on the SI’s website in Icelandic and in English, and on the DSBB; hardcopies are also available from the agency’s library. - The data on NA and GFS are provided to the MOF prior to release to the public; this advance release is made known to the public via the SI’s website and the DSBB. - Ethical standards - Staff behavior is guided by the rules for the general public services as outlined in the Government Employees Act. ### National Accounts — Methodological soundness, Accuracy and reliability, Serviceability, Accessibility (Dimensions 2–5) - Concepts and definitions - The NA are compiled according to the conceptual framework of the European System of Accounts 1995 (1995 ESA). - Scope - The scope of the NA does not cover all the accounts and tables recommended by the Inter-Secretariat Working Group on National Accounts (ISWGNA) as being necessary for implementing the System of National Accounts 1993 (1993 SNA)/1995 ESA. - The annual accounts do not include income or higher order accounts. - The production and assets boundaries are broadly in line with the framework. - Classification/sectorization - Internationally accepted classifications are used, including NACE and COICOP. - Basis for recording - Market prices are used to value flows and stocks. - All transactions and flows, including government transactions, are recorded on an accrual basis. - Transactions between establishments in the same enterprise are recorded on a net instead of a gross basis. - Source data - Source data on the financial operations of enterprises are derived almost exclusively from administrative data sources, primarily tax records. - The data are available at the enterprise level only, making it difficult to derive information on establishments. - An annual household expenditure survey (HES) is conducted based on a three-year rolling sample of households. - The source data are not timely to compile the production accounts. - Assessment of source data - Administrative data are assessed to identify outliers and inconsistencies based on specific criteria. - HES data are assessed for sampling errors. - Statistical techniques - Annual estimates by type of activity and category of expenditure are deflated using different techniques and have different base years. - Expenditure estimates are considered the primary estimates and are based on outdated 1990 prices. - Quarterly estimates are not benchmarked to the annual estimates. - The CPI and the deflator of household final consumption expenditure display different growth patterns. - Assessment and validation of intermediate data and outputs - Results from supply-and-use tables were used to balance the estimates in 1997 but for the following years the discrepancy was incorporated into the estimates and not investigated. - Since 2002, the discrepancy has been shown explicitly. - Revision studies - Studies of revisions are conducted when major revisions are introduced; the last major study was presented in 2000 following the release of the revised series based on the newly adopted 1995 ESA. - Periodicity and timeliness - The periodicity and timeliness of the quarterly accounts meet SDDS requirements. - Consistency - Estimates at current prices are consistent or reconcilable with the other major datasets. - Volume estimates of GDP by production and by category of expenditure are not consistent as they are derived using different constant price estimate techniques. - Revision policy and practice - The revision cycle has been stable over the past few years and is closely related to the need to provide policymakers with up-to-date data and the availability of source data. - Users are not normally informed when the data have been revised as the revised data are not annotated. - Data accessibility - Detailed NA statistics are disseminated on the SI’s website. - Summary data are disseminated in hardcopy accompanied by a brief analysis. - Data are released to all users at the same time based on a preannounced schedule available on the SI’s website and on the DSBB. - SI announces data release through a press release at the same time the data are presented on the website. - Metadata accessibility - Metadata are limited. - A publication on sources and methods was released in 1994. - SI prepared an inventory of the NA compilation system in 2004; it provides no information on the annual GDP constant price or the quarterly GDP compilation process. - Apart from the information on the DSBB, no metadata exist on the quarterly GDP compilation. - Assistance to users - Hardcopy publications and the website provide comprehensive information on how users may contact SI. ### Consumer Price Index — Methodological soundness, Accuracy and reliability, Serviceability, Accessibility (Dimensions 2–5) - Concepts and definitions - CPI concepts and definitions are in accordance with the guidelines of the 1995 ESA and the CPI Manual. - Scope - The CPI covers all resident noninstitutional households, including households whose major activity is farming or fishing or involves an unincorporated business activity. - It includes own-account consumption of meat, fish and vegetables, and services of owner-occupied dwellings. - Illegal market goods and services are excluded. - Classification/sectorization - 1995 ESA is used to classify institutional units and transactions. - Household expenditures are classified according to COICOP-Iceland version; the structure of the CPI is based on COICOP. - Basis for recording - Purchasers’ prices including trade and transport margins are used. - Net weights are used for cars, insurance, and lotteries in accordance with the 1995 ESA. - Source data - Source data (mainly the HES) provide an adequate basis for estimation of CPI weights. - Comprehensive and well-managed price collections are conducted. - Assessment of source data - Household expenditure data accord with appropriate definitions, scope, classifications, valuation, and time of recording. - Sampling errors for the surveys are regularly monitored. - Statistical techniques - Techniques are generally sound, including treatment of missing prices, new products, and quality change. - Appropriate formulae are used to calculate elementary aggregates and indices. - CPI weights are revised annually. - Assessment and validation of intermediate data and outputs - Validation includes reference to appropriate secondary source data. - Some comparisons are made with other price series. - Revision studies - Conducted primarily for annual revisions of weights. - Two additional revisions were undertaken in recent years. - Findings from revision studies are used to minimize future errors. - Periodicity and timeliness - Periodicity meets SDDS requirements. - Timeliness exceeds SDDS requirements. - Consistency - No consistency issues as the CPI is not calculated for regions. - Long-term time series are available for the total CPI and for detailed subindices. - Revision policy and practice - Revision policy is known to data users. - CPI data are not revised following publication. - Index weights for the CPI are revised annually. - Studies of the annual weight updating are conducted, but are not disseminated. - Data accessibility - An advance release calendar is available on the SI’s website; precise release dates are announced in October each year for the following calendar year. - Data are simultaneously released to all users. - Detailed CPI data, including lengthy time series, are available on the website and in hardcopy publications. - The website has provision for obtaining user-defined tables. - Metadata accessibility - Metadata are available on the SI’s website, but not yet translated into English. - There is no comprehensive guide to the CPI in Icelandic or in English but some useful technical papers are published on CPI matters, mainly in English. - Assistance to users - Contact persons are available to assist users and their contact details are advertised on the website. - Users’ requests for data are met in a timely manner. - There is a simple listing of publications on the website, including prices applicable. ### Producer Price Index — Methodological soundness, Accuracy and reliability, Serviceability, Accessibility (Dimensions 2–5) - Concepts and definitions - PPI concepts and definitions accord with the guidelines of the 1995 ESA and the PPI Manual and broadly follow internationally accepted good practices. - Scope - The PPI scope covers resident market enterprises producing manufacturing products and exported fish products. - The manufacturing series commenced in the fourth quarter of 2003 and the fish products index in 1986. - Some detail is available for fish products, but manufacturing products are not disaggregated, mainly because of confidentiality reasons. - Own-account production and illegal production are not covered. - Classification/sectorization - The 1993 SNA is followed in classifying institutional units and transactions. - The Icelandic Standard Industrial Classification (compatible with NACE Rev.1.1) is used to classify enterprises. - The PRODCOM list is used to classify products. - Basis for recording - PPI weights and prices are based on sold production on a gross sales basis, valued at market prices; these are equivalent to basic prices as no subsidies are received. - Source data - The business register is sound. - Manufacturing and fishing data used to construct weights are sound and comprehensive. - Price collections are soundly based. - Assessment of source data - Assessment is routinely conducted. - Most price information is obtained electronically from enterprises. - Unusually large price changes are queried back to enterprises for verification. - Statistical technique - Procedures are sound. - Adjustments to unit records are made only when clearly warranted and can be identified in datasets. - Procedures for imputations, new products, and quality change are soundly based. - Assessment and validation of intermediate data and outputs - Because the PPI is relatively new, the data are not yet regularly compared with other relevant intermediate price series and national accounts data. - Revision studies - Mainly conducted on weight revisions, and apply only to fish products at present. - Findings are used to minimize future errors. - Periodicity and timeliness - Periodicity and timeliness for the PPI do not meet SDDS requirements. - Consistency - Consistent long-term series exist only for fish products and are categorized by type of fish. - The PPI for manufacturing products is not dissected, mainly because of confidentiality reasons. - No regular comparisons are made with other price series. - Revision policy and practice - Revision policy is known to data users. - PPI manufacturing weights are revised annually. - PPI fish product weights are revised annually. - Revisions are made to indices for fish products; these are not clearly indicated in published data. - To date no revisions have been made to the PPI for manufacturing products. - Data accessibility - An advance release calendar is available on the SI’s website; precise release dates are announced in October each year for the following calendar year. - Data are simultaneously released to all users. - Time series for fish products are available on the website and in hardcopy publications. - A disaggregation of the manufacturing products price index is not available. - The website has provision for obtaining user-defined tables. - Metadata accessibility - A general description of the PPI is included on the DSBB. - A short description was given when the PPI was first published, but there is no comprehensive document. - Assistance to users - Contact persons are available to assist users and their contact details are advertised on the website. - Users’ requests for data are met in a timely manner. - There is a simple listing of publications on the website, including prices applicable. *Source: _cr05414 - 0. Prerequisites of quality* ### 2. Methodological soundness ### _cr05414 - 2. Methodological soundness ### General government statistics (GFS) - Concepts and definitions - SI compiles and disseminates annual general government, central government, and local government statistics in accordance with the 1995 ESA and the 1995 ESA Manual on Government Deficit and Debt. - Scope - Annual general government statistics have full coverage of all government institutions at all levels. - SI publishes the annual balance sheet for local governments, but only the annual financial balance sheet of the central government. - SI disseminates main aggregates for general government revenue, expenditure, and financial balance on a quarterly basis. - The MOF disseminates monthly data on central government operations and debt. - Classification/sectorization - Classification of transactions and sectorization of general government are consistent with the 1995 ESA. - Basis for recording - Most flows and stocks valued at market prices. - Domestic central government debt recorded at face value with accrued interest and indexation; foreign central government debt revalued for exchange rate changes. - Annual transactions are based on accrual accounting principles. - General government data compiled on a gross basis and corrections done in line with the 1995 ESA. - Source data - Accounting data received from the Financial Management Authority (FMA), the Social Security Fund (SSF), and the Association of Local Authorities (ALA). - These sources provide all necessary stocks (except for the nonfinancial assets of the central government) and flow data. - SI has not been receiving source data to compile financing data for the local and general government sector since 2001. - Assessment of source data - Final source data are based on audited accounts of all general government institutions. - Statistical techniques - Source data do not require estimation; SI makes estimates for some items and adjustments to preliminary data. - Assessment and validation - Final GFS use audited data based on full coverage; all tables are checked for internal consistency. - Revision studies and practice - Large revisions are analyzed and explained. - Revision schedule is predetermined. - Preliminary data are clearly indicated; revised data are not annotated. - Results of major revisions are made public. - Periodicity and timeliness - Iceland meets SDDS periodicity and timeliness requirements for general government operations data, but not the timeliness requirement for monthly central government operations. - SDDS prescribes quarterly periodicity within one quarter for central government debt data; Iceland disseminates monthly data within one month. - Due to software problems, Iceland is not meeting its own timeliness standard, although data are disseminated within the SDDS timeliness requirement. - Consistency - GFS data are internally consistent for the general government account and other levels of government. - In source data, transfers received do not always equal transfers paid between subsectors. - Data are consistent with national accounts, but not with monetary statistics. - Data accessibility - GFS presented to allow major aggregates/balancing items to be identified and related to underlying data. - Annual dissemination provides coverage and details equivalent to GFSM 2001 tables with a few exceptions. - For annual figures, a large number of GFS time series from 1980 are available on agencies' websites. - In October, SI releases an advance release calendar covering the next calendar year; MOF does not provide an advance release calendar. - Statistics are made available simultaneously by SI to all users; statistics not routinely disseminated are available upon request. - Metadata accessibility and assistance - For general government data, SI provides on its website a link to the metadata and SM on the DSBB. - MOF does not provide metadata or methodology; metadata for central government operations and debt are available on the DSBB. - Contact points for each subject field and a list of publications are available on SI’s website. ### Monetary statistics - Concepts and definitions - Concepts and definitions broadly conform to the Monetary and Financial Statistics Manual (MFSM). - Departures: monetary aggregates include deposits of the foreign sector and the central government. - Insufficient information on residency of holders to appropriately classify currency-linked and indexed bonds issued by resident banks as domestic/foreign liabilities. - Scope - Coverage includes all depository corporations in the country. - Classification/sectorization - Mostly in line with the MFSM, except: - In DMB accounts, financial derivatives are off balance sheet. - Positions of nonfinancial public corporations are indistinguishably included as part of government (in treasury and government institutions). - In CBI accounts, fixed assets are off balance sheet. - Basis for recording - Follows MFSM, except: - Several DMBs report loans net of provisions. - Securities for investment are not at market value. - Not possible to derive net claims on central government in Accounts of the DMBs and Banking System. - Difficult to measure net foreign assets with underlying gross figures in Accounts of the CBI and DMBs. - Source data - Monthly balance sheet of the CBI and individual monthly reports submitted by the DMBs. - Source data provide sufficient detail to classify sectors and instruments in line with the MFSM, except financial derivatives are not reported. - Source data are timely. - Assessment of source data - Assessment generally sound; CBI’s Statistics Department crosschecks DMB data with the Icelandic Banks Data Center (IBDC). - For errors and out-of-trend changes, staff immediately contact DMBs for explanation and/or revised data. - Statistical techniques and compilation - Statistical techniques are sound. - Compilation is highly automated; electronic procedures minimize compilation errors. - Assessment and validation - Intermediate data assessed and validated against IBDC and FME (for December data). - Revision studies and practice - No formal revision studies; sources of errors investigated and corrected. - Revisions are rare and generally small; these revisions are not indicated. - No routine studies/analyses on revisions. - December data of each year are subject to revision until external audit of annual DMB balance sheets is concluded; no information is posted regarding possibility of such revision. - Periodicity and timeliness - Periodicity and timeliness are in line with SDDS requirements. - Consistency - Monetary statistics are consistent within the dataset. - CBI’s and DMBs’ records on liabilities to, and claims on, each other are consistent. - Current data disseminated are not consistent with historical data. - Monetary statistics are not consistent with balance of payments statistics and GFS. - Data accessibility - Dissemination media adequate; statistics released on a preannounced schedule. - Existing table layout does not provide sufficient information to derive accounts of the banking system from CBI and DMB accounts. - Nonpublished nonconfidential data available on request. - CBI’s website shows two calendars: advance release calendar and statistics calendar; data sent to selected users on date in advance release calendar but posted on website a few days later according to statistics calendar. - Metadata accessibility and assistance - No methodological notes posted on CBI’s website or shown in publications. - Brief metadata posted on IMF’s DSBB in the form of SDDS metadata; DSBB is not hyperlinked from CBI’s website. - No information materials to inform users on monetary statistics. - Assistance to users provided on request; CBI publications provide contact information and an e-mail address for data queries. ### Balance of payments statistics (BOP) - Concepts and definitions - BOP statistics broadly in line with the Balance of Payments Statistics Manual, fifth edition (BPM5) concepts and definitions. - Scope - Data collection system provides for recording all resident/nonresident transactions in the balance of payments statement. - Mechanisms improve direct reporting coverage of the International Transactions Reporting System (ITRS). - Classification/sectorization - Generally in line with BPM5 standards. - Dividends are not shown separately for income on foreign direct investments and income on portfolio investments. - Loan transactions of banking sector are not classified separately from currency and deposit transactions of this sector. - Financial derivatives item is shown on a net instead of gross basis. - Basis for recording - Market valuation generally followed. - Interest payments on long-term debt are not recorded on an accrual basis. - Source data - ITRS is central to data collection system. - Additional direct reporting sources used (for example, in transportation industry) plus a survey on exports and imports of information technology services. - Domestic currency deposits held by nonresidents in domestic banks are not reported as part of external liabilities. - CBI has initiated in-depth discussion on revising current data collection system and increasing coverage of services accounts. - Degree of coverage of transactions settled through accounts abroad is incomplete as evidenced by contrasting trade and ITRS sources. - Assessment of source data - Coverage of ITRS and business registers checked on an ongoing basis. - ITRS input data checked electronically. - Nonresponse or misreporting from some major respondents can affect the overall picture. - Statistical techniques and validation - Spreadsheets used to compile BOP use sound checking procedures. - ITRS uses internal consistency checking processes. - Financial flows and stock data and related business registers are checked against financial market news; trade data are checked against ITRS. - Revision studies and practice - Revisions are monitored and assessed. - Provisional BOP data are clearly marked on all online and hardcopy publications. - CBI revises recent and historical statistics as soon as revised data are provided by respondents; users are not informed about this revision policy. - Periodicity and timeliness - Data disseminated in line with SDDS requirements for periodicity and timeliness. - Consistency - Data are consistent internally and with NA and GFS. - Data on external liabilities of domestic banks are not reconcilable between BOP and monetary statistics. - Data accessibility - Data provided in well-presented tables online and in paper publications. - Tables provided with different levels of breakdown following specific users' requirements including the business community. - Metadata accessibility and assistance - No documentation on sources and methods used to compile statistics. - SM is available on the IMF DSBB’s website (except for trade and exchange rate statistics). - Assistance to users available on request; CBI publications provide contact information and an e-mail address for data queries. *Source: _cr05414 - 2. Methodological soundness — https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05414.pdf* ### 11. Based on the review of Iceland’s statistical practices, discussions with the staff of ### _cr05414 - 11. Based on the review of Iceland’s statistical practices, discussions with the staff of ### Cross-cutting Recommendations - Strengthen back-up arrangements and increase staff resources for work on macroeconomic statistics to meet increasing statistical demands as a member of the EEA, undertake methodological reviews, prepare metadata, and advance methodological work. - Consolidate the legal framework governing Statistics Iceland (SI) by preparing a single and comprehensive statistical act. - Strengthen the authority for coordinating official statistics by assigning specific responsibility to SI in the new legislation. - Strengthen coordination among statistical agencies to ensure consistency of methodologies and statistical outputs. - Provide detailed metadata through publications and/or websites of relevant compiling agencies to meet user requirements. ### National Accounts — Recommendations and Authority Response - Recommendations: - Expand the scope of the annual accounts to include income accounts and the capital account. - Expand the scope of the quarterly accounts to include quarterly GDP by type of activity. - Introduce benchmarking techniques to combine the quarterly estimates with the annual estimates. - Clearly indicate revisions to published series, using annotations. - Statistics Iceland response and actions: - Work on income accounts has been underway for the last three years. - Substantial work on supply and use accounts; chain-linking replaced fixed base year for constant price measurements as of September 2005, for both annual and quarterly accounts. - A revised series at constant prices extending back to 1990 was released in September 2005; continuous time series at current prices from 1980 was released. - Pledged to increase staff in national accounting and to seek more timely data sources for provisional quarterly GDP by type of activity. - Will explore benchmarking techniques and intends to investigate annually the discrepancy between GDP by type of activity and by expenditure, aiming to construct supply and use tables more frequently (preferably annually if resources allow). ### Price Statistics — Recommendations and Authority Response - Cross-cutting: - Examine adequacy of existing staff numbers and consider concentrating price index expertise in one organizational unit. - Producer Price Index (PPI): - Develop a phased and prioritized work program to ensure planned improvements in the PPI. - Clearly indicate revisions to published series, using annotations. - Consumer Price Index (CPI): - Clearly indicate revisions to published series, using annotations. - Statistics Iceland response and actions: - Agrees present staff level in price statistics is insufficient; will increase staff resources in price statistics over the next two years. - PPI development is being carried out according to a phased and prioritized work programme: strengthen regular quarterly production, extend coverage, and eventually introduce monthly data (a substantial part of the data is already collected monthly). - Will prepare proper documentation covering basis, methodology, and production of the PPI. - CPI advisory and newly established broadly based advisory user group for CPI; back-up arrangements are continuously maintained. ### Government Finance Statistics — Recommendations and Authority Response - Recommendations: - Compile an annual balance sheet for the central government and for the consolidated general government. - Clarify the classification of financial liabilities of the local governments. - Ensure timely provision of source data to compiling agencies to meet SDDS timeliness requirements. - Ministry of Finance response and actions: - State Accounting Committee (SAC) is developing accrual accounting, reclassifying revenue and expenditure presentation in line with GFSM 2001, and developing a central government balance sheet (development expected to take two to three years). - Clarification of classification of local government financial liabilities is in progress; committee expects to resume publication of these data for general government with statistics for 2005. - Efforts underway to ensure timely provision of source data; Financial Management Authority expects to overcome dissemination delays no later than in early 2006. ### Monetary Statistics — Recommendations and Authority Response - Recommendations: - Adopt the full scheme of sectorization of institutional units and classification of financial instruments as recommended in the MFSM. - Present the accounts of the CBI, DMBs, and the Banking System in the analytical framework as recommended in the MFSM. - Ascertain residency of holders of currency-linked and indexed bonds issued by resident banks and classify these bonds into domestic/foreign liabilities as appropriate. - Provide advance notice to the public of major changes in methodology, source data, and statistical techniques. - Reconcile differences between historical and current data disseminated, and discrepancies between monetary statistics and balance of payments statistics and GFS. - Clearly indicate revisions to published series, using annotations. - Disseminate monetary statistics to all users simultaneously. - Central Bank of Iceland (CBI) response and actions: - Will collect data on financial derivatives from DMBs and disseminate these statistics as collection begins; preparations started to include fixed assets in the CBI balance sheet. - Notes limitations: deposits of nonfinancial public corporations with DMBs cannot be disaggregated from the Treasury because the Enterprise Register does not distinguish the entities; deposit departments of cooperative societies are classified with DMBs and not as Other Financial Corporations. - Implements recommendation to exclude deposits of nonresidents from monetary aggregates; Treasury deposits in the Central Bank are not included in monetary aggregates. - The recommendation to ascertain residency and classify currency-linked and indexed bonds has been implemented. - Will consider providing advance notice of major changes and conducting studies on revisions subject to staff resources; states revisions are rare and insignificant in practice. - Steps taken to explain inconsistencies between monetary statistics and balance of payments and to rectify inconsistencies in time series; breaks will be explained in metadata. - Monetary statistics releases synchronized so they are available to all users simultaneously. ### Balance of Payments Statistics — Recommendations and Authority Response - Recommendations: - Compile data on an accrual basis on income on external debt, and on foreign direct investments. - Collect and compile data on financial derivatives (at least from banks). - Classify domestic currency deposits of nonresident nonbank entities as foreign liabilities and tighten consistency between balance of payments and monetary statistics. - Improve the revision policy and inform the users about it. - Central Bank response and actions: - Will improve collection, compilation, and dissemination of balance of payments statistics in accordance with international standards. - Will ensure respondents understand obligation to provide information and will cite laws/regulations on obligation and confidentiality on questionnaires and annual surveys. - Will implement showing direct investment income on equity and portfolio investments separately in the income account of quarterly statistics; interest payments will be calculated on an accrual basis instead of due-for-payment basis. - Inclusion of financial derivatives in the balance of payments and external position statistics is scheduled (at least from banks); derivatives expected to be included in DMBs balance sheets next year. - Nonresidents’ deposits have been reconciled with monetary statistics; permanent debt between parent and affiliated banks will be included under direct investment. - Will improve revision policy by immediately including new data with explicit statements in releases and identifying which balance of payments data have been revised; will inform users of reasons for revisions via Central Bank press releases and website; will consider studies of revisions subject to staff resources. ### SDDS Periodicity and Timeliness — Selected Observations from Appendix I - National accounts: - SDDS Periodicity: Q; Iceland: Q - SDDS Timeliness: 1Q; Iceland timeliness: "70-75 days for the data compiled using the expenditure approach" and "20-22M for data compiled using the production approach" - Production index: - SDDS Periodicity: M; Iceland: A - SDDS Timeliness: 6W (1M encouraged); Iceland timeliness: 3M - Labor market employment: - SDDS Periodicity: Q; Iceland: Q - SDDS Timeliness: 1Q 17D - Price index: Consumer prices: - SDDS Periodicity: M; Iceland: M - SDDS Timeliness: 1M 8WD - Price index: Producer prices: - SDDS Periodicity: M; Iceland: Q - SDDS Timeliness: 1M 45 days - General government operations: - SDDS Periodicity: A; Iceland: A - SDDS Timeliness: 2Q 180D - International reserves and foreign currency liquidity: - SDDS Periodicity: M (W recommended); Iceland: M - SDDS Timeliness: 1W for official reserve assets; Iceland: 1M (1W encouraged) for the reserves template data; NLT 7D for international reserves; NLT 21D for the reserves template data - External debt: - SDDS Periodicity: Q; Iceland: Q - SDDS Timeliness: 1Q NLT 10W - Notes and observations: - Flexibility options for periodicity and timeliness are indicated in several categories. - Several SDDS categories are noted as having "Missing SM page" or "Missing SM page" entries in the Iceland column in Appendix I. *Italic: Source — Excerpts from the IMF Report on the Observance of Standards and Codes (ROSC)—Data Module and Authorities’ responses as presented in the provided content.* ### 0. Prerequisites of quality ### 0. Prerequisites of quality ### 0.1 Legal and institutional environment - 0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified - Statistics Iceland (SI) is classified as a full-fledged ministry in the administrative structure of the government of Iceland. - SI is governed by the Act on Statistics Iceland No. 24 of 1913, which entered into force on January 1, 1914. - The Act gives SI broad authority to collect, produce, and disseminate statistics on social and economic conditions in Iceland. - The Act on Statistical Reports No. 29 of 1895 established the initial authority of the central administration to produce and disseminate statistics on economic conditions in Iceland—an authority that was entrusted to SI through the Statistics Act. - SI took over the compilation of the national accounts (NA) on July 1, 2002. The data were previously compiled by the National Economic Institute (NEI), which was abolished on that date. The relevant legislation that established the NEI was repealed by Act No. 51/2002. - The Regulation on Central Government Administration No. 3 of 2004 establishes the specific tasks and responsibilities of all government ministries. Article 6 of the Regulation outlines the responsibilities of SI and specifically states that the agency is responsible for compiling the NA. - 0.1.2 Data sharing and coordination among data-producing agencies are adequate - Article 6 of the Regulation of the Central Government Administration, No. 3, of February 1, 2004 states that SI is responsible for “organizing, coordinating and producing Iceland's official statistics.” - The legislation does not give SI any specific coordinating powers and functions beyond this general statement, nor are there any regulations to this effect. - In practice, coordination powers of SI appear sufficient to ensure consistent compilation and avoidance of duplication. - Cooperative agreements exist in statistics of trade in goods and services and government finance statistics. - Examples of cooperation: Customs; the Land Registry; the Government Financial Management Authority (FMA); the Ministry of Social Affairs; the Institute of Labor; the Federation of Municipalities; the Ministry of Health; and the State Tobacco and Alcohol Monopoly. - Under taxation law, taxation and other authorities undertake specific collections for statistical purposes. - SI has required other agencies to use specific classifications (for example, the Icelandic Standard Industrial Classification (ISAT 95) as required in the Official Gazette). - Cooperation is exercised through formal meetings and workshops but mainly through informal contacts. - SI does not have overall specific authority to require other agencies to adopt statistical standards. In some cases coordination and cooperation between agencies are less than optimal. - Recommendation: Consolidate the legal framework by preparing a single, modern, and comprehensive statistical Act and take steps towards its enactment. Include provision for strengthening coordination among statistical agencies and consistency of methodologies and statistical outputs by assigning the authority for coordination to the central statistical authority. - 0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only - There are no specific requirements for maintaining the confidentiality of individual reporters’ data in the Act on Statistics Iceland. - SI has established Rules of Procedure for Treating Confidential Data (dated October 8, 2004), established on the basis of, and with regard to, other legislation in force in Iceland and the United Nations' Fundamental Principles of Official Statistics. - Article 3: all information gathered by SI for statistical purposes concerning specified natural or legal entities must be kept confidential. Same applies to administrative registers used for statistical purposes. - Exceptions: SI is authorized to provide the respective government authority with confidential information from administrative registers that the authority previously collected or provided to SI. - Article 3 specifies care must be taken that information cannot be traced to specific natural or legal entities when publishing; exceptions may be made with the entity's consent. - SI has established aggregation rules to prevent residual disclosure (important in Iceland's economy size). Respondents informed of confidentiality rights and obligations in questionnaires. - Article 5: SI employees required to maintain confidentiality and discretion concerning confidential data; employees must treat all other information about individuals and legal entities with caution and respect. - Government Employees Act, No. 70 of 1996, Article 18 quoted: "Each employee is obliged to observe confidentiality in regard to matters of which he gains knowledge in his work and shall be regarded as confidential according to law, the instructions of superiors or by the nature of the matter. The obligation of confidentiality remains even if the employee concerned leaves his employ." - Employees are informed of rules and duties pertaining to confidential information and UN Fundamental Principles of Official Statistics and the International Statistical Institute's Declaration on Professional Ethics. Every employee required to sign a pledge of confidentiality before commencing work (applies to permanent and temporary staff). - No penalties are prescribed in the Rules of Procedure in the event that staff members divulge confidential information. - Article 8: confidential electronic data accessible only to employees working with the data; network administrator controls access under DG supervision; DG may grant written, time-limited access for specified purposes. - Article 10: DG may grant access to confidential data for research if personal identities have been obliterated or encrypted and data cannot be traceable to recognizable entities; access subject to SI rules and Data Protection Authority non-objection. - Research access: granted to bona fide researchers on SI premises under strict supervision; access subject to SI rules and Data Protection Authority. - Article 6: confidential statistical data on paper must be kept secure during processing, but destroyed once utilization is complete. Project managers, with division directors, decide retention period. Normally not kept longer than assumed sufficient for detection of errors or uncertainties. Data preserved in specific, marked boxes in locked storage with destruction date noted. - Article 7: electronically recorded confidential data kept secure during processing; once utilization is complete they shall either be destroyed or personal identities obliterated or encrypted. Electronic data may retain identities while survey and processing continue and for a limited time after publication. - Project managers, with division directors, decide on preservation after processing and publishing; normally electronic data not kept longer than necessary to detect errors or uncertainties. - If preserved for long-term research, personal identities must be obliterated or encrypted. If data are independent and no linkages foreseen, identities must be obliterated once and for all. If linkages are desirable, identities shall be encrypted by a recognized method according to special rules. - Where identities are obliterated or encrypted and data cannot be traced to recognizable entities, permission to access or disclose for research may be authorized. - Confidential data storage procedures repeated: specific, marked boxes in locked storage with destruction date noted. - SI premises closed between 11 p.m. and 7 a.m. each day; access to work areas requires electronic code access. Division directors and project managers responsible for preserving/destroying confidential data in consultation with the DG. Each year office managers must report to the DG on confidential data practices. On one day each year all managers supervise destruction of data under their control. - 0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response - Regulation of the Central Government Administration stipulates SI's responsibility for organizing, coordinating, and executing official statistics and collecting, producing, and disseminating statistics on economic and social developments. - Act on Statistics Iceland authorizes SI to request and collect from public and private parties all information it deems necessary. - Specific provisions in taxation legislation make it mandatory for taxation authorities to supply SI with all data required for statistical purposes. Similar provisions apply to Customs authorities. - Article 2 of the Act on Statistics Iceland specifies fields of statistics SI is charged with investigating; SI shall compile such statistics as may be prescribed by law or mandated by the Government or which SI may itself propose in consultation with competent government authorities. - Article 4 authorizes SI to mandate reports that previously were submitted to county sheriffs be submitted directly to SI, and SI may return reports for correction and request further information, subject to penalties as prescribed by law. In practice, penalties have not applied for non-submission or false information. - Response burden is not a major issue because SI relies heavily on administrative records, especially in economic statistics. - SI provides assistance to respondents (e.g., point of contact). For CPI, price collectors obtain most price information via visits to selected outlets. For PPI, many price data are obtained electronically from selected producers. For NA compilation, existing data sources are used and no surveys are directly undertaken by NA staff. - Communications with respondents emphasize explanations about the needs and uses of the statistics. ### 0.2 Resources - 0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs - SI employs 97 full-time equivalent employees comprising 27 in the population register division and 70 in the economic and social statistics division. - The National Accounts Department has 12 staff comprising 11.2 full-time equivalents. - Time allocation of NA staff by areas of responsibility (as presented): - Supply-and-use tables and quarterly GDP - 1 - Household final consumption expenditure - 1 - Gross capital formation - 1 - Government finance statistics - 1.8 - Nonprofit institutions serving households, and agriculture - 0.5 - Production approach - 1.9 - Short-term indicators and Financial Intermediation Services Directly Measured (FISIM) - 1 - Institutional sector accounts - 1 - Director - 1 - Deputy Director (income distribution; assists on all areas of the statistics) - 1 - Almost all staff who compiled NA in the NEI joined SI when responsibility shifted in 2002; thus, no loss in experienced staff resulted from the shift. - All but one staff possess post-secondary education; only four persons have less than five years experience in compiling the statistics. - There are currently no vacancies for NA staff; however, it was foreseen that two persons were expected to leave in May 2005. - The agency notes it normally experiences no difficulty recruiting new staff, but most new recruits may not have relevant working experience. - Current staff complement is large relative to the overall population compared with other countries in the region. However, staff levels may not be sufficient to maintain the compilation system in the medium term and to undertake improvements necessary to meet international requirements. - The current arrangement of duties renders the compilation process vulnerable as in many cases only one individual works on a specific sector; the compilation system may be vulnerable to unanticipated staff turnover or temporary unavailability of staff. - SI uses up-to-date computing resources: personal computers all less than two years old with broadband Internet access; connected via a local area network. - Funding for SI is determined by the central government budget. Budget appropriations have increased in recent years, reflecting new tasks and obligations (including European statistical cooperation) and the move to new premises in 2003. Budget appropriations tend to lag behind demand for services. - Recommendation: Strengthen back-up arrangements and increase staff resources for compiling the national accounts statistics. - 0.2.2 Measures to ensure efficient use of resources are implemented - Ongoing monitoring of collection, compilation, and dissemination processes. - SI constantly searches for ways to improve efficient use of resources and sets priorities among tasks. - Long tradition of using administrative registers and records as major data sources for financial efficiency. - Increasing reliance on electronic reporting and electronic dissemination: tax authority data (main source for NA) are received electronically. - SI has increased electronic dissemination through its website, reducing hardcopy publication costs. - Users have not expressed reduced accessibility due to electronic dissemination; recent survey by the ROSC mission indicated most users access data electronically. *Source: _cr05414 - 0. Prerequisites of quality* ### 0.3 Relevance ### _cr05414 - 0.3 Relevance ### 0.3 Relevance and user interaction - NA staff conduct regular discussions with users in the Ministry of Finance (MOF) and with the Central Bank of Iceland (CBI). - SI recently established a user group for the NA comprising representatives from the CBI, the MOF, the major commercial banks, labor unions, the Federation of Employers, and the economic faculties of three universities. - The terms of reference for the user group are yet to be established. - The group has held two meetings to date and is expected to meet two to three times a year. - The agency has not conducted user surveys and does not solicit the views of private users systematically apart from the user group. - SI is active in the International Association for Official Statistics (IAOS); the DG was president of the association during 1993-95. Recommendation: - Establish programs to solicit the views of a broad cross section of users periodically, e.g., through surveys of users. ### 0.4 Other quality management - Management is sensitive to all dimensions of quality, although no established processes are in place to focus on the quality of the statistics. - Processes are in place to monitor adequately the quality of compiled and disseminated statistics: - Regular checks of coverage, classification, and missing data. - Monitoring of internal consistency of source data and consistency across source datasets; all deviations in source data are noted and investigated. - SI has established agreements with public sector data producers to ensure timely receipt of source data. - Quality aspects are discussed with subject matter managers in annual planning and follow-up meetings. - Under the EEA Agreement (Article 76) SI is subject to statistical cooperation obligations, including development and use of harmonized methods, definitions, and classifications; common methodology, quality standards, and monitoring of outputs and outcomes are specified in many statistical fields. - SI recognizes tradeoffs between accuracy and timeliness when establishing release calendars and revision cycles: - First release of the annual NA estimates takes place in March. - The second estimate, named preliminary data, is released in September to meet policymakers preparing the annual budget. - Source data available at these times may not be optimal, but accuracy is considered sufficient for preliminary estimates. ### 1. Assurances of integrity — Professionalism - Article 6 of the Regulation on Central Government Administration establishes that SI has exclusive responsibility for compiling the NA statistics. - SI has a long tradition of professional independence; the DG, as head of the ministry, has professional independence. - Appointment and tenure of the DG: - Historically life-time appointment until retirement age of 70; the current DG is only the third appointee since 1914. - Under the Government Employees Act No. 70 of 1996, the DG is appointed by the Minister for a fixed five-year term, subject to renewal. - The Minister may advertise the post at the end of term; the DG may have to reapply. - Article 36 of the Regulation gives the Minister authority to transfer appointees (including the DG) to another post if requested. - The DG has sole authority to appoint staff based on Government Employees Act guidelines; staff are appointed on an indefinite contract and may be relieved upon three months notice; all vacant posts are publicly advertised. - Staff engagement and resources: - DG and staff participate in external seminars and task forces of Eurostat and OECD and in Nordic network groups. - Staff have free, unlimited access to international academic journals and research databases through a nationwide Internet portal. - The DG has sole authority on statistical matters and may delegate to staff; statistical techniques, methodology, and data sources are decided based on best international practices, influenced by cost and resource constraints. - The DG may provide feedback to the press without external clearance; department heads can comment on erroneous interpretations without DG approval. - Division heads monitor news reports on statistics following SI press releases (no formal clipping service maintained). ### 1.2 Transparency - SI publishes terms and conditions for compiling statistics on its website in Icelandic and English; a hardcopy of the legislation is available in SI’s library. - Survey respondents are informed of the general purpose and that information will be used for statistical purposes only. - Terms and conditions are presented on the Dissemination Standards Bulletin Board (DSBB). - Internal governmental preaccess: - The Economic Division of the MOF may be given preaccess to NA statistics for forecasting purposes. - No established schedule for preaccess; the time span between provision to the MOF and wider dissemination may change. - The MOF is instructed not to release the data and has adhered to this instruction. - Internal government access is made known to the public through the IMF’s DSBB on SI’s website. - All SI products are clearly identified with agency name and logo; publications advise users to identify SI as the source when quoting. - Advance notice of major changes: - Last major NA revision was in 2000 with release based on the 1995 ESA. - SI plans to release NA estimates containing major revisions during September 2005 and provided advance notice on its website. - Further details of the revisions were provided in the March 2005 edition of the NA publication. - The User Group on National Accounts has been informed of the planned revisions. ### 1.3 Ethical standards - SI does not have a comprehensive agency-specific ethical code; staff behavior is guided mainly by the Government Employees Act. - Rules of Procedure for Treating Confidential Data adopted in October 2004 provide additional guidance. - Staff are bound by the Data Protection Act No. 77 of 2000. - Staff take an oath of secrecy on hire; outside work requires DG approval to avoid conflicts of interest — the DG reports no encountered conflict in a 20-year period. - Ethical regulations are available on SI’s website and in the SI’s library, though no formal reminder system exists. ### 2. Methodological soundness — Concepts and definitions - NA statistics are compiled according to the guidelines of the 1995 ESA, consistent with the System of National Accounts 1993 (1993 SNA). - SI adopted the 1995 ESA and released the first set of data based on this framework in 2000, replacing the 1968 SNA. ### 2.2 Scope - The NA estimates cover some ISWGNA minimum requirements for implementing the 1993 SNA/1995 ESA: - annual value added at current and constant prices by activity; - annual expenditures on Gross Domestic Product (GDP) at current and constant prices; and - annual value added components at current prices by type of activity. - The NA do not cover the following ISWGNA minimum requirements: - income accounts and capital account, and - annual rest-of-the-world account (until net lending). - The NA do not cover the following ISWGNA recommended items: - quarterly value added and GDP at current and constant prices by type of activity, and - annual supply-and-use tables. - SI compiles quarterly expenditures on GDP at current and constant prices. Supply-and-use tables are compiled at regular intervals of four years. - Supplementary data compiled by SI: - Capital stock by type of asset - Gross fixed capital formation by type of activity and type of asset - Saving and net lending/borrowing - Delimitation and territorial treatment: - Constituent units of the economy are in accordance with the 1995 ESA. - Territorial enclaves (embassies, consulates) are included as part of the economy. - Seasonal/nonresident workers employed part of the year in Iceland who may not meet residency criteria are not included. - Bonded warehouses are included; no free zones operate in Iceland. - The NATO military base at Keflavik is considered external territory and excluded from the domestic economy. - Production boundary: - Broadly in accordance with the 1995 ESA. - Final consumption includes goods on own-account (notably fishing) and own-account fixed capital formation. - Mineral exploration, production of literary or artistic originals, and production of computer software are included. - Illegal output sold to willing buyers is not estimated and is excluded. - Agricultural work in progress is included among tangible assets. - Defense-related assets usable for civilian purposes, valuables, and historical monuments are not included for practical purposes. - Intangible assets included: - mineral exploration; - systems and standard applications computer software; - entertainment, literary, and artistic originals; - patented entities; and - leases and other transferable contracts. - Mineral exploration mainly covers geothermal and hydroelectric research; inclusion as assets is facilitated by national business accounting standards where such exploration is capitalized. - Eurostat action points for NA development: - SI has carried out some points and will carry out remaining ones as part of major revisions to be completed in September 2005. - Remaining points include revision of pension liabilities of local government, clarification of some borderline cases between taxes and payments for services, more intensive use of household expenditure surveys (HES) for some areas of household final consumption, and construction of a balanced supply-and-use table for the year 2001. Recommendations: - Broaden the scope of the annual accounts to include income accounts, the capital account, and the rest-of-the-world account. - Broaden the scope of the quarterly accounts to include quarterly GDP by type of activity. ### 2.3 Classification / sectorization - Classification systems are consistent with internationally accepted guidelines and the 1995 ESA (including the 50 percent rule). - Activity classification: NACE, implemented up to the five-digit level. - Product classification: CPA, implemented at the two-digit level for supply-and-use tables. - Household consumption classification: COICOP. - Government functions classification: COFOG — the 1986 COFOG is currently used; new COFOG has been introduced but data based on it are yet to be published. - Government finance statistics (GFS) are compiled as part of the NA; classifications are consistent. ### 2.4 Basis for recording - Valuation: - Market output is valued at basic prices. - Output for own final use is valued at equivalent market prices where feasible; otherwise at cost. - Value-added taxes, excluding the deductible part, are included in valuation of intermediate consumption. - Data are available for insurance and freight on merchandise imports but cannot be disaggregated; total merchandise imports and exports could be valued on a free on board (f.o.b.) basis. - Exchange rates and foreign currency: - Transactions in foreign currency are converted using the midpoint exchange rate as they appear in the balance of payments statistics. - Merchandise trade transactions are converted to national currency using the buying rates of each currency on the 28th of the previous month. - There is only one official exchange rate. - Recording basis: - Transactions and flows are recorded on an accrual basis. - Work in progress in the form of capital formation is recorded in the period the production takes place. - Government revenue and expenditure is recorded on an accrual basis. - Grossing/netting: - Data compiled at enterprise level lead to most intra-enterprise transactions being recorded net. - Exception: fishing and fish processing industries where vertical integration is common — transactions are recorded gross following annual special investigations. *Source: _cr05414 - 0.3 Relevance* ### 3. Accuracy and reliability ### 3. Accuracy and reliability ### 3.1 Source data - Source data are obtained from comprehensive data collection programs that take into account country-specific conditions. - The NA compilation system depends almost exclusively on administrative data sources. - Enterprise surveys are not conducted; direct enquiries for NA purposes have been limited to occasional small-scale surveys to collect limited information on specific sectors. - SI notes that the relatively small size of the economy in terms of the number of units poses special challenges to the conducting of sample surveys: sample sizes should be relatively large to minimize sampling errors, thereby resulting in the same units being covered regularly. - Because of the cost effectiveness of the administrative data collection system and the resource limitations of SI, the agency has no plans to change the data collection system. - Compilers also utilize data from a household budget survey. ### Administrative data sources - The data are collected primarily from a combination of three administrative registers comprising: - Enterprise Accounts Register - Value Added Tax (VAT) Register - Pay-As-You-Earn (PAYE) Register - Enterprise Accounts Register - Most comprehensive and most widely used; maintained by SI but derived from the records of the tax authorities. - Since 1997, incorporated enterprises have been required to submit annual returns in a standardized format to the tax authorities; from 2001 unincorporated enterprises have been required to submit such returns. - Provides detailed information on the operating accounts and balance sheets of the units. - Enterprises are classified according to the five-digit level of the NACE. - Data are received for most of the enterprises that are obligated to respond; now, more than 95 percent of enterprises are normally covered. - Data are collected on a calendar year basis. - Developed by the Internal Revenue in collaboration with the now defunct NEI; the Internal Revenue is under no obligation to seek the approval of SI prior to amending the instruments used to collect the information and has made some minor adjustments since 1997 without consulting SI. - Primary advantage: cost-effective and easily accessible in electronic format from the tax authorities. - Disadvantage: data are available for enterprises and not for establishments. - Note (footnote reproduced): The Internal Revenue currently maintains a business register. The register, established on the basis of legislation in 1969, was maintained by SI until July 2003. It contains a unique identification number for each enterprise as well as contact information, the legal status, and the nature of the activity. The register serves as a basis for comparing records of enterprises as all the other registers use the identification number and other information from the business register to identify enterprises. Currently, the register serves no other major purpose for SI. SI is currently developing its own business register for statistical purposes; however, it is not yet in operation and will not be discussed in this assessment. - Value Added Tax Register - Comprehensively covers market activity. Personal transport and hospitals are exempt from VAT although they are required to pay VAT in their intermediate inputs. - Current threshold of gross revenue for an enterprise to be registered to pay VAT is relatively low at 220,000 Icelandic kronur; thus, the vast majority of units engaged in market transactions are covered. - Units provide information to the Customs Department on gross turnover subject to VAT, exports, and VAT exemptions. - Records units mainly at the enterprise level; not possible to distinguish among various types of activity being undertaken. - Data aggregates match that received from the Enterprise Accounts Register; Enterprise Accounts Register is used in the NA compilation system because information is more detailed. - VAT data are used as a cross-check and for extrapolation in the quarterly GDP estimation process; however, the data are available bi-monthly and straddle quarters, thereby limiting their usefulness. - Pay-As-You-Earn Register - PAYE tax system has existed since 1988; gained prominence as a source of statistics in 1998 when amendments were introduced allowing collection of additional information. - Data are collected on a monthly basis for all employees and self-employed persons. - Data are to be submitted to the Internal Revenue within 15 days of the end of the month and are available to SI within 30 days of the end of the month, with coverage at about 80 percent. - Coverage improves to about 95 percent over the next 30 days. - Register provides data on the wages and salaries subject to income tax. ### Ad-hoc surveys and other source data - Limited ad-hoc surveys conducted over the past five years to obtain some basic information to fill data gaps (examples: survey of computer software suppliers; annual surveys of sales of manufacturing; monthly surveys on hotel accommodation and power intensive industry; quarterly surveys on inventories of fish processing companies). - Government finance statistics: Comprehensive GFS are available. The National Accounts Division compiles the GFS according to the guidelines of the 1995 ESA. There is full coverage of all levels of general government. - Price statistics: Monthly CPI, quarterly PPI for fish products, and unit value indices of imports and exports. - CPI available at a level of disaggregation required for compiling the NA. - PPI available quarterly; apart from PPI for fish products, index categories are highly aggregated and not suitable for deflating most manufacturing categories. - Unit value indices of imports and exports are available and used to derive volume estimates of exports and imports of goods. ### Household expenditure survey (HES) - HES is continuous with a three-year cycle. - SI selects a single-stage random sample of 1,200 household units each year for the HES from the national population register. - Actual number of responding households over the three-year period is approximately 1,900. - Due to nonresponse and other factors the response rate is about 55 percent. - SI corrects for bias attributable to nonrespondents using data from other sources on family size and type and other major household characteristics and compares data with geographical distribution data from the population register. - Samples of responding households for each year are spread evenly over the year in 26 two-week subsamples. - Respondents complete a diary of day-to-day expenses and report expenditures for a three-month period for less frequently occurring expenses. - Extensive use is now made of cash register receipts in place of itemized purchases in diaries: - By 2002, 77 percent of all entries were taken from cash register receipts and, in the case of food and beverages, 89 percent of entries were taken from cash register receipts. - In remaining cases SI used itemized data reported by respondents in diaries. - Use of itemized receipts reduces response burden and costs and provides detailed transaction information (description of each item, quantity, total amount paid, store name, form of payment). - Household expenditure data are compiled on a three-year moving average basis (example: data compiled for the years 2000 to 2002; data for 2000 and 2001 were revalued at 2002 prices for deriving CPI weights). - Standard errors are calculated for main aggregates from HES data: - Standard errors for total expenditures are less than 2 percent. - Standard errors for groceries are less than 1 percent. - Where standard errors are greater than 20 percent, those particular data cells show an asterisk accompanying the figure indicating that the figure should be used with caution. ### 3.1.2 Fit to NA concepts, time of recording, and valuation - Primary purpose of administrative data is tax assessments; data are presented according to business accounting concepts and not national accounting concepts. - Compilers undertake necessary adjustments to approximate NA concepts where feasible. - Data are based on monetary transactions; payments in kind and other nonmonetary transactions are not recorded. One notable example is compensation of employees paid in kind, which is recorded separately in the registers; SI has developed alternative methods to derive estimates of this income and the estimates are included in the NA. - Source data are available on a calendar year basis, approximating the time of recording criteria for annual estimates. - Enterprise data are not available on a quarterly basis; compilers use alternative sources to derive data for estimating quarterly accounts. ### 3.1.3 Timeliness - Source data for estimates of GDP by expenditure categories are timely, allowing compilation of preliminary estimates within 3 months of the end of the year and the second estimate, named preliminary data, within 9 months of the end of the year. - Estimates of GDP by type of activity are compiled 21 months after the end of the period because detailed source data on enterprises and industries are not available until 11 months after the end of the period. - SI plans to shorten the publication lag of GDP by activity to 15 months. - Recommendation: Improve the timeliness of the source data used to compile the estimates by type of activity. The timeliness of the Enterprise Accounts Register is relatively rigid and is beyond the control of SI; thus the compilers may wish to explore alternative and more timely data sources that could be used to derive provisional estimates. These data sources could include basic indicators of economic activity that could be used to derive first estimates. ### 3.2 Assessment of source data - SI has mechanical procedures in place to assess administrative data received from the tax authorities. - Specialized computer software highlights outliers in the data based on predefined criteria; checks are conducted at the five-digit level of the NACE. - When errors are spotted, manual checks are conducted at the enterprise level. - Drawback: offsetting errors at the enterprise level would not be identified when the data are assessed at the industry level. *Source: _cr05414 - 3. Accuracy and reliability* ### 3.3 Statistical techniques ### 3.3 Statistical techniques ### Data compilation and source treatment - SI uses grossing up techniques to estimate full coverage based on data derived from the main data sources: wages and salaries from the PAYE records and estimates from sales VAT records. - The nature of the basic data obviates the need for adjusting due to nonresponse. - The existence of outliers in the records of main data sources is rare and adjustments are not usually warranted. ### Nonobserved activity and adjustments - Primary nonobserved activity issues: misspecifications in the Enterprise Accounts Register and informal activities not covered by the register. - Misspecifications arise from the application of tax rules affecting recording of some transactions (example: payments in kind to employees such as business cars, mileage allowances, travel allowances, food, accommodation, and telephones provided free of charge). - Informal activities are primarily undertaken by self-employed persons and unincorporated enterprises. - SI uses detailed procedures and specific data sources to adjust these transactions. ### Production approach procedures and industry compilation - Output and intermediate consumption estimates are compiled at the five-digit level of the NACE where feasible; when five-digit presentation would reveal identity of producer, a higher aggregation is used. - Estimates are compiled for 457 activity groups. - Industry classification is not establishment oriented; activity data are derived from the Enterprise Accounts Register, which is enterprise oriented. - Estimates are based primarily on annual returns from the Enterprise Accounts Register; coverage is comprehensive. - Fixed ratios derived from benchmark surveys are used to estimate value added for some activities (most important: services of owner-occupied dwellings). The contribution to overall GDP of activities estimated using fixed ratios remains small. ### Estimates of GDP by type of activity — main data sources (selected) - A. Agriculture, hunting, and forestry — Business accounts compiled by the Agricultural Economic Institute - B. Fishing — Operating accounts of fishing establishments - C. Mining and quarrying — Enterprise Accounts Register - D. Manufacturing — Enterprise Accounts Register - E. Electricity, gas, and water supply — Company accounts - F. Construction — Enterprise Accounts Register - G. Wholesale and retail trade; etc. — Enterprise Accounts Register - H. Hotels and restaurants — Enterprise Accounts Register - I. Transport, storage, and communication — Enterprise Accounts Register - J. Financial intermediation — Company accounts collected by Financial Supervisory Authority (FME) - K. Real estate, renting, and business activities (except owner-occupied dwellings) — Enterprise Accounts Register - L. Public administration and defense — Government accounts; State Social Security Institute - M. Education — Government accounts; State Social Security Institute - N. Health and social work — Government accounts; State Social Security Institute - Source: Gross National Income Inventory—200 ### Owner-occupied dwellings; work in progress; inventories; consumption of fixed capital - Output of owner-occupied dwellings is valued as estimated rental values tenants would pay for similar accommodation (equivalent market rent). - Benchmark rental rates derived from a survey using rental prices of March 1999; dwellings categorized by type; number of dwellings from the Land Registry of Iceland; price level based on the rental of dwellings component of the CPI. - Extrapolation from 1999 levels uses annual changes in the number of dwellings in each category and the price changes of the dwellings component of the CPI. - Growing of crops, standing timber, and stocks of fish are treated as work in progress. Livestock reared for food are not considered significant as work in progress. Large construction projects that span one period are considered work in progress. - SI uses inventories to estimate output and intermediate consumption and adjusts to account for holding gains or losses on inventories (inventory valuation adjustment). - Consumption of fixed capital is estimated by the perpetual inventory method based on accumulated gross fixed capital formation; results cannot be decomposed by industry, so depreciation from company accounts is used at the industry level. ### Cash versus accrual and volume measures - Taxes and subsidies on products, government revenue, and government expenditure are converted from a cash to an accrual basis by allocating transactions to the period to which they relate. - SI no longer uses double deflation for fishing and related activities; single indicator technique is used to derive volume estimates for all activities. - Volume estimates of taxes and subsidies on products are not compiled. - Volume estimates of trade margins: method used in Iceland is to extrapolate base year trade margins using volume extrapolators of sales; the volume extrapolator of sales is derived by deflating gross turnover using the appropriate category of the CPI. ### Measurement of volume change and identified deficiencies - Volume estimates of GDP by type of activity use annual chain linking. - Volume estimates by category of expenditure use fixed base indices with a base year of 1990. - International best practice: use annual chain linking; if not possible, update base year at least every five years. - Using different techniques for the two GDP approaches poses interpretation difficulties. - SI considers estimates by expenditure category to be the primary NA estimates because these series are compiled using more comprehensive and reliable data and are available earlier than output estimates; the official estimate of GDP growth is derived from the expenditure side. - Conclusion: compilation of official volume estimates does not conform to international best practice. - SI is at an advanced stage to compile expenditure volume estimates using annual chain linking and plans to release revised data during the second half of 2005. - Recommendation: Introduce benchmarking techniques to combine the quarterly estimates with the annual series. ### Expenditure approach procedures and specifics - All components of GDP by expenditure are derived independently. - Household final consumption expenditure: estimated using data from five major sources, including the HES; estimates computed for 425 groups using the six-digit level of the former COICOP. The CPI is used to deflate most components; expenditures by residents abroad are deflated using a weighted index of inflation in the EU countries and changes in the exchange rate of the Krona. - Gross fixed capital formation: estimated using data from the Enterprise Accounts Register, the Land Registry of Iceland, merchandise trade statistics (imports), and accounts of general government; compiled by type of asset and industry groups for 10 asset types and 36 industries. - Government final consumption expenditure: compiled at the most detailed four-digit level of the COFOG; volume estimates derived using a price index of cost components of expenditure—CPI, building cost index, and wage index. - Changes in inventories cover fish stocks, aluminum, and ferro-silicon. Volume measures of changes in inventories of fish stocks are derived by deflating values using relevant prices of fish products — technique is not considered international best practice. - Specific compilation rules applied: - Government final expenditure excludes incidental sales. - Expenditure of residents abroad is included in estimates of imports. - Expenditure of nonresidents in the domestic economy is included in exports. - For enterprises, expenditures on valuables are included in gross capital formation if capitalized in financial accounts; expenditures on valuables by households are not estimated separately and are included in private final consumption expenditure. ### Specific quarterly compilation techniques and issues - SI compiled the first set of estimates of quarterly GDP for 1997. - Quarterly data sources differ from annual sources for gross fixed capital formation because the Enterprise Accounts Register is only available annually. - Quarterly data sources: - Gross capital formation: - imported capital goods — imports - construction — extrapolation from previous year using VAT paid by contractors as an indicator - Private final consumption expenditure: - estimates of turnover from VAT register - imports of consumer goods - domestic production of consumer goods - Government final consumption expenditure: - government accounts - State Social Security Institute - Exports and imports of goods and services: - balance of payments statistics - Quarterly estimates are not benchmarked to annual estimates; the “step” problem exists because quarterly indicators are not fine-tuned to correspond to lower-frequency annual source data. Usefulness for temporal comparisons is limited. - Source data used to compile quarterly estimates are not seasonally adjusted and the estimates themselves are not seasonally adjusted. Compilers cite the “relatively short” length of the series as reason for not adjusting. - IMF guidance: seasonal adjustment may be attempted with 20 quarters of estimates if seasonality has been stable. - Recommendation: Introduce benchmarking techniques to combine the quarterly estimates with the annual series. ### Validation of intermediate data and outputs (3.4) - Compensation of employees from the Enterprise Accounts Register is compared against PAYE Register records. - VAT Register data are checked against aggregate data from the Enterprise Accounts Register. - Data are reviewed for coverage and consistency by type of activity. - Potential discrepancies in major intermediate data are assessed and adjustments using alternative sources are undertaken. - Annual changes in some key components of source data are monitored and checked against other aggregates. ### Supply-and-use tables, discrepancies, and validation - SI has compiled SUT for 1993, 1997, and 2001. - Results of the 1997 survey were used to balance the estimates. - Until 2002, the statistical discrepancy from the expenditure side of GDP was distributed proportionately among intermediate consumption on the output side. - For recent years when the output measure is unavailable, the statistical discrepancy has been shown explicitly as part of the estimate by type of activity. - Quarterly GDP estimates are compared and validated against forecasts compiled by the CBI, the MOF, and research departments of some commercial banks; if major differences exist, NA staff investigate but do not change quarterly estimates to conform to forecasts. - Recommendation: Investigate annually the statistical discrepancy between the GDP estimates by type of activity and by category of expenditure. ### Revision studies (3.5) - SI studies revisions following major revisions in data. - A comprehensive revision study was conducted in 2000 following the adoption of the 1995 ESA; results were published by the NEI in a paper entitled Revising the Icelandic National Accounts to Bring Them Into Conformity with New International Standards. - The study analyzed the purpose for revisions, compared new results with old estimates, and assessed implications of the revisions. ### 4 Serviceability ### Periodicity and timeliness (4.1) - NA data are produced and disseminated on a quarterly basis, meeting the SDDS requirements. - Quarterly accounts are disseminated within 80 days of the end of the period, in line with SDDS requirements (the standards stipulate GDP estimates must be disseminated within three months of the end of the period). ### Consistency (4.2) - Current price estimates are consistent; the estimate by expenditure category is considered the superior estimate. - Volume estimates by type of activity and by category of expenditure are derived using different methods and thus are not consistent. - A consistent series of GDP volumes is available from 1945. - Current price estimates are available from 1990 based on the 1995 ESA and from 1957 to 1990 based on the 1968 SNA. Data for 1990 are available based on both techniques. - Estimates for 1997 were balanced using the SUT compiled for that year; thus two estimates (one balanced and one without) are available for that year. - NA estimates are consistent and reconcilable with the balance of payments, the GFS, and merchandise trade statistics. Balance of payments data are used as inputs into GDP and GNP estimates. Differences between merchandise trade statistics and the balance of payments are reconcilable. GFS are compiled by NA staff as part of NA; concepts and definitions used are similar. ### Revision policy and practice (4.3) - Revisions to annual and quarterly estimates of GDP by type of expenditure follow a regular and transparent schedule: - First estimate: 75 to 80 days after the end of the period. - First revision: Nine months after the end of the period. - Second revision: 15 months after the end of the period. - Quarterly estimates are revised mainly in March and September when revised annual figures are published; minor revisions may be undertaken in June and December. - SI may undertake additional revisions beyond the published revision cycle; estimates are never considered final. - Preliminary data are clearly identified when series are disseminated; revisions are not always indicated. - Studies and analyses of revisions are made public; the revision study is available in Icelandic and in English. - Recommendation: Identify clearly in all publications and on the Internet the statistics that have been revised. ### 5 Accessibility ### Data accessibility and dissemination (5.1) - Statistics are disseminated on SI’s website and in a hardcopy publication “Statistical Series: National Accounts.” - The publication presents a six-year series of broad estimates and a detailed three-year series of household final consumption expenditure and gross fixed capital formation; charts and summary analyses in English and Icelandic are included. - Data are presented in varying levels of detail according to dissemination media and user needs. - Overall change in GDP is presented in the press release notifying users of data availability. - Website dissemination allows users to select and download specific categories and series or download predefined series in pdf format. Data are also disseminated in hardcopy publications. - Release schedule is preannounced on SI’s website and on the DSBB; schedule is prepared and released in October showing proposed release dates for quarterly and annual statistics for the upcoming year. - Users are informed before scheduled release if SI cannot meet the preannounced schedule and a revised release date is presented. NA have always been released according to the preannounced schedule. - NA are simultaneously released to all users. Release is announced via a press release at 9:00 a.m. on the scheduled day and data are presented on SI’s website at the same time. - SI makes available upon request data that are not routinely disseminated on the website and in the hardcopy publications. *Source: _cr05414 - 3.3 Statistical techniques* ### 5.2 Metadata accessibility ### 5.2 Metadata accessibility ### 5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques - Documentation on sources and methods is limited. - The NEI released a comprehensive publication on NA concepts, definitions, sources, and methods in 1994 titled “National Accounts: 1945–1992”. - The publication is available only in Icelandic and has not been updated since the first release. - The NA compilation system has gone through many changes since the time of its release. - In 2004, SI published a comprehensive document on the compilation process entitled “Gross National Income Inventory (ESA 95): Iceland.” - The inventory does not address the constant price estimation process or the quarterly GDP estimation process. - Apart from the information on the DSBB, no other information exists on the quarterly NA compilation process. ### 5.2.2 Levels of detail adapted to the needs of the intended audience - The publication “National Accounts: 1945–1992” contains an introductory chapter with basic information on the interrelationships among the economic aggregates. - The material is normally accessed and used in schools. - No summary metadata exist to provide basic information on the compilation system for casual users. - Recommendation: - Update the metadata for the annual accounts and disseminate metadata on the quarterly accounts. - In addition to the comprehensive notes, the SI should also disseminate general, nontechnical metadata for use by the casual user. ### DQAF (July 2003) — relevant assessment points on metadata and accessibility - Assessment Element: 5.2 Metadata accessibility — marked as LNO (Practice Largely Not Observed) in table comments. - Specific findings from table comments: - "Metadata are limited. Metadata on constant prices not updated since 1994. No metadata on quarterly GDP except on DSBB." - Related table comments affecting metadata and related processes: - 2.2 Scope — "Income accounts not compiled. Rest-of-the-world account not compiled. Quarterly GDP at constant prices and by type of activity not compiled." - 3.1 Source data — "Data on establishments are not available. Estimates by production approach are delayed because of lateness of source data." - 3.3 Statistical techniques — "Volume estimates of the two GDP estimates derived using different techniques. Quarterly GDP not benchmarked to the annual estimates." - 3.4 Assessment and validation — "Statistical discrepancies between annual estimates not always investigated." - 4.2 Consistency — "Volume estimates by type of activity and expenditure not consistent." - 4.3 Revision policy and practice — "Revised data are not identified when disseminated." ### 5.3 Assistance to users (summary of user contact and publication access) - 5.3.1 Contact points for each subject field are publicized: - SI’s website and hardcopy publications list: - The name of the compiling agency. - The name, e-mail addresses, telephone, and facsimile number of the Director of the National Accounts Division. - The publication identifies the SI’s website, where users can obtain more detailed data. - The website notifies users on how to obtain additional information about the agency or the dataset. - 5.3.2 Catalogs of publications, documents, and other services: - SI does not produce a hardcopy catalog of its publications. - The website presents the list of available publications produced by the agency, with: - An accompanying brief description of the statistics contained. - The price of the publication. - The method to place orders for publications. *Source: _cr05414 - 5.2 Metadata accessibility* ### 0.2 Resources ### 0.2 Resources ### 0.2.1 Staffing, facilities, computing resources and financing - SI has a staff of 97 full-time equivalent employees, comprising 27 in the population register division and 70 in statistical fields (including also administrative staff). - The great majority of staff members are university graduates. - Staff development: - Staff attend appropriate courses and participate in international seminars and workshops on statistical matters. - CPI staff members have participated in working groups and seminars on HICP and PPP sponsored by Eurostat and Nordic countries. - Staff remuneration and turnover: - Salary levels are reasonably adequate but uncompetitive with banks and some other organizations. - Staff turnover is reported to be quite small and not problematic. - Resource sufficiency and robustness: - Present staff numbers are barely sufficient to cope with present demands and may be inadequate for inevitable increases in demand and international statistical requirements. - Lack of robustness for individual statistical fields could render the system vulnerable in the event of unexpected staff turnover. - CPI and related functions staffing and duties: - Four staff members are engaged in compiling Iceland’s CPI and related statistics including the Harmonized Index of Consumer Prices (HICP), the Purchasing Power Parity (PPP), the building cost index, and the HES. - 10 price collectors are engaged for two days per month. - Two interviewers are engaged for four to five days per month; interviewers undertake data entry, coding, and other support functions. - The four CPI staff members have appropriate university qualifications; one joined the CPI team two years ago, the others have extensive experience. - The Director of the CPI is a member of the Ottawa Group on Prices and the UN-ECE CPI Steering Group. - Technology and data protection: - SI places heavy emphasis on applying technology in collecting, compiling, and disseminating statistics. - Up-to-date equipment and well-known and proven software are used throughout SI; emphasis on standardization, particularly through Microsoft products. - In-house development aimed at data warehousing applications. - Back-up procedures: daily, weekly, and monthly back-up cycles are observed. - The tape library is located in a secure computer room; monthly tapes are kept in a “safe box” designed to withstand excess heat and strong magnetic fields. - SI plans to mirror all data between two remote sites (locally and in another geologically safe site). - Each CPI analyst has their own workstation and many computer-assisted edit routines help review data; computer technology has been expanded to improve data collection in the HES. - SI relies on the mail for dispatching price questionnaires from price collectors stationed outside the capital area; while no problems have arisen, a back-up system may be prudent. - Premises and funding: - SI’s office premises and furnishings are of a good standard. - Funding is determined by the central government budget; SI has some flexibility to determine specific uses of its allocation. - Budget appropriations have increased in recent years reflecting new tasks and obligations and the move to new premises in 2003. - Funding is generally adequate, but budget appropriations tend to lag behind demand for services. - Planning: - There are no formal forward planning systems in SI—planning scenarios are informal. Recommendations (as stated in source) - Strengthen staffing back-up arrangements and increase staff resources for work on the CPI. - Examine the desirability of concentrating price index expertise by bringing all price index staff together in one organizational unit. - Review staff resource requirements for all price indices as soon as possible with a view to allocating sufficient resources to allow further planned developments and to provide a more robust organization for price statistics generally. - It would be prudent to allocate one additional staff member to the CPI group to allow greater flexibility in coping with ongoing responsibilities, including further development of internal training manuals and documentation (including metadata) on price indices. ### 0.2.2 Measures to ensure efficient use of resources - Long tradition of using administrative registers and records as major data sources for financial efficiency. - SI does not conduct periodic reviews of staff performance or costing of resources used in statistical programs. - Ongoing monitoring of collection, compilation, and dissemination processes to ensure efficiencies. - Increased reliance on electronic reporting and electronic dissemination in recent years (example: electronic capture of prices information for the PPI and dissemination of a large amount of data on SI’s website). *Italic: Source: _cr05414 - 0.2 Resources (IMF staff document content provided).* ### 2.3 Classification/sectorization ### 2.3 Classification/sectorization ### Classification systems and sectorization - The 1995 ESA is used to classify institutional units and transactions in the enterprise statistics. - Household expenditures are classified according to COICOP-Iceland, which is an extended version of the standard COICOP. - CPI structure (based on COICOP): - 12 major groups (2-digit COICOP) - 39 classes (three-digit) - 98 subclasses (four-digit) - 654 basic headings (seven-digit) - approximately 4,000 items - NACE Rev. 1.1 is used for the classification of enterprises in the business register. ### Basis for recording — valuation and timing - Market prices are used to value flows and stocks. - CPI weights for goods and services are valued at purchasers’ prices including trade and transport margins and value added tax. - Own-produced consumption of vegetables, meat, and fish is valued at market purchasers’ prices. - Product specifications in the CPI are detailed and include price-determining characteristics; prices include the effects of unconditional discounts and rebates where applicable. - Recording is done on an accrual basis: - Prices are obtained in respect of the first two working days of each month. - Prices are collected monthly for most items; some items (garbage, sewerage and water supply, kindergarten fees, and medical services) are collected annually with interim checks for price changes. - Prices for packaged holidays are recorded in the month in which consumption at the observed price commences (example: summer packaged holidays consumed in August are recorded in August), which is an exception to the accrual basis but aligns with HICP requirements. - Footnote: Working days are defined as Mondays to Fridays. - Grossing/netting procedures: - Weights for cars: net weights (purchases less sales of vehicles). - Weights for insurance items: premiums paid less claims, and accounting for changes in capital income (reserves) of insurance companies. - Weight for lotteries: payments less winnings. --- ### 3. Accuracy and reliability ### 3.1 Source data — coverage, collection, and sampling - HES (Household Expenditure Survey) details: - Conducted by SI on a continuing basis with a survey cycle of three years. - SI selects a single-stage random sample of 1,200 household units each year from the national population register. - The actual number of responding households over the three-year period is approximately 1,900 each year. - Response rate is about 55 percent due to nonresponse and other factors. - SI corrects for nonresponse bias using HES and other sources on family size and type and other major household characteristics; compares data with geographical distribution data from the population register. - HES samples are spread evenly over the year in 26 two-week subsamples. - Respondents complete a diary of day-to-day expenses and report expenditures for a three-month period for less frequent expenses. - By 2002, 77 percent of all entries were taken from cash register receipts and, for food and beverages, 89 percent of entries were taken from cash register receipts. - Use and quality of receipts: - Cash register receipts reduce response burden, provide detailed disaggregation, item descriptions, quantities (in some cases), store name, and form of payment. - Weighting and standard errors: - Household expenditure data are compiled on a three-year moving average basis (example: data compiled for 2000 to 2002; 2000 and 2001 revalued at 2002 prices for deriving CPI weights). - Standard errors are calculated for main aggregates from HES data. - Standard errors for total expenditures are less than 2 percent. - Standard errors for groceries are less than 1 percent. - Cells with standard errors greater than 20 percent are marked with an asterisk and should be used with caution. - Coverage of CPI weights: - HES data are used in calculation of headings for about 64 percent of index expenditures. - Alternative data sources used where HES is insufficiently detailed (medicines, medical services, bus fares, domestic air fares, communications, swimming pool entrance fees, television channel subscriptions). - Alternative sources used for tobacco, alcohol, lottery tickets, and insurance costs where they are more reliable than HES. - Outlet selection and coverage: - Outlet samples selected purposively. - Cash register receipts data represent retailers accounting for over 90 percent of grocery sales. - Retailers divided into four groups (three dominant groups and “other”); chains currently total 11; outlets selected within each chain; individual outlet weights established for each COICOP category. - For nongrocery items, outlet samples use HES and VAT Register data (example: VAT data allow selection of retail outlets selling clothing that account for about 90 percent of all clothing sales). - Outlet samples reviewed continuously with reference to cash register receipts data; shifts in consumer purchases among chains reflected in average prices. - Regional CPIs are not calculated and regional weights are not used in compiling the national CPI, but prices are collected in regional outlets of the chains. - Price collection program: - Approximately 19,000 prices collected each month for about 4,200 items from around 450 outlets. - Price data collection methods: - Food and clothing: personal visits and paper collection forms. - Other goods and services: central collection (SI Reykjavik) using telephone, fax, and e-mail. - Prices generally cover a range of product types with sufficiently detailed product specifications to ensure consistent variety pricing each period. - Seasonal weights are not used for fruit and vegetable items; imported fruits and vegetables are available year-round; quality differences not regarded as significant over the year and are not adjusted for. - Problem areas: telephone services (complex plans) and air fares (variety and rapid change); CPI staff pay particular attention to these. - Establishing new price collection at an outlet: handled by CPI head-office staff who secure agreement and determine representative CPI items centrally, often with price collector advice. - Price collectors obtain prices by inspection of shelves or tags and record on questionnaires; prices mailed or handed in after checking. - Prices reported apply during the first and second working days of the month — this practice should be reviewed periodically; for items with significant short-term volatility, consider more frequent collection (e.g., twice a month, or weekly) and Eurostat’s plans to designate the middle of the month as the pricing period for HICP purposes. - Rental survey: - SI conducts a separate monthly survey of rental units covering on average about 3,300 rental units. - Private rental market sources: rent information collected by communal units managing rent supplements. - Social rental market sources: community rental firms and nongovernment organizations. - Ad hoc surveys: - SI conducts occasional ad hoc surveys (example: detailed data on sales and prices of toys were obtained to establish specifications). ### 3.1.2 and 3.1.3 — Data consistency and timeliness - The frequency of price collection is adequate to support monthly consumer price indices. - CPI and HES, under common SI management, are consistent in concepts, definitions, valuation bases, timing, and classifications. - Periodicity and timeliness: - Prices data are collected and checked promptly each month. - CPI calculations are carried out in the CPI Division. - No instance of missing the target date of eight working days after the end of the reference month. - No instances of missing mail or late delivery of mail. - Recommendation: review transmission method periodically and consider back-up arrangements. ### 3.2 Assessment and validation of source data - Sampling error monitoring: - CPI staff routinely produce and use sampling error data from HES; HES produced on a rolling three-year basis increases observations and improves standard errors. - HES data examined for outliers prior to finalization; comparisons made with other data sources (computers, telephones, car registrations, production of agricultural products); reference to household final consumption estimates. - Sales data imputed from VAT data have limited use due to different classifications. - High proportion of HFCE covered by CPI: estimated at about 94 percent (main differences: exclusion of institutional households and expenditures in Iceland by foreign tourists). - Administrative and secondary data: - Accuracy of administrative data for CPI weights is routinely assessed (examples: alcohol from the State Tobacco and Alcohol Monopoly; cars from the car registry; health care services from the state Social Security Institute; sales of medicines from the Ministry of Health). ### 3.3 Statistical techniques and compilation procedures - Data entry and validation: - Double entry system: individual prices entered independently by two different CPI staff and compared by computer; differences resolved. - All month-to-month price movements exceeding 20 percent are examined and queried back to the outlet where necessary. - Price collectors note special discounts at time of collection. - Nonresponse not an issue in CPI compilation. - CPI weights and timing: - CPI weights are revised annually and new weights are included in the index for March each year. - Weights adjusted for price change to align with the price reference period when introduced. - Missing prices and replacements: - Groceries: price change calculated for items available in two consecutive periods. - Other goods and services: missing price can be carried forward for a maximum of three months before replacement (accords with Eurostat’s rules). - Replacement items chosen as close substitutes; permanently unavailable products are replaced. - New product introduction: - New products mainly introduced when rebasing the index in March each year; exceptions for significant items (example: new road with toll replacing a ferry service introduced immediately). - Practice of pricing items for several months before incorporation allows deferral until sold in reasonable quantities and avoids introducing items at transiently high prices. - Seasonal treatment: - Some clothing, recreational, and food items treated as seasonal with different ranges in summer and winter; summer goods prices are repeated at close of summer and similarly for winter goods — method consistent with international guidelines. - Quality adjustments: - Prices adjusted to remove quality change effects using suitable procedures (bridges between former and new product when possible). - Car prices and option prices used to identify and eliminate quality change effects; significant quality changes evaluated directly through examination of specifications. - Measurement of CPI weights — owner-occupied dwellings: - Represented by a flow of service method using a simple user cost approach. - Expenditure weight for owner-occupied dwellings is the household’s annuity, taking account of the real interest rate and the lifetime of the asset (depreciation), in years. - Base for the annuity is the real estate value of the house collected in the HES. - Prices measured using a price index for all properties sold in the country covering on average approximately 1,800 sales per month; price data are sales contracts obtained from the Land Registry of Iceland. - Valuation basis: - Value recorded for goods and services represents the economic cost to the consumer at the time of purchase regardless of payment method (cash or credit). - Use of credit cards is very common in Iceland; surcharges or discounts for payment method are unusual. - Inclusion and valuation of own-produced consumption: - Vegetables, meat, and fish produced for own consumption are included in the CPI weights and valued at local market prices at the time produced. - Elementary aggregation methods (elementary aggregates calculated using five methods): - The relative of geometric mean prices, for 39 percent of the expenditures (32 percent of the basic headings); - The weighted relative of geometric mean prices for groceries, for 18 percent of the expenditures (52 percent of the basic headings); - A Lowe fixed base index, or relative of average prices, for 38 percent of the expenditures (14 percent of the basic headings); - A superlative index (Fisher ideal formula), for 2 percent of the expenditures (1 percent of the basic headings); - Other indices for 3 percent of the expenditures (1 percent of basic headings) (example: housing maintenance uses the subindices for building materials from the building cost index). - Aggregation and reference periods: - The Icelandic CPI uses the Lowe index formula to aggregate elementary indices to higher levels. - Weights updated annually and new weights introduced in March each year. - Overall Icelandic CPI reference period (time base): May 1998 = 100. - Subindices series reference period: March 1997 = 100. - Present CPI weights refer to 2000 to 2002 (and 2001 to 2003 in the case of groceries). - New weights introduced in March each year are adjusted for price change between the base periods and March. *Source: _cr05414 - 2.3 Classification/sectorization (IMF PDF), canonical URL: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05414.pdf* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Assessment and validation of intermediate data and statistical outputs ### Validation of intermediate results - SI regularly compares CPI data with results from price surveys conducted by the Competition Authorities, labor organizations, and newspapers. - Comparisons are made between CPI series and unit value indices for exports and imports, but these are difficult because of significant differences in classification systems and exchange-rate effects. - HICP subindices data are used for comparison with price developments in different European countries. - PPI component series are not yet published in sufficient detail to be of much use in comparing PPI results with CPI component data. ### Assessment and investigation of statistical discrepancies in intermediate data - The regular CPI review process investigates large or unusual changes in aggregate indices for sectors and groups of commodities. - Changes are examined to ensure they correctly represent price movements and are amended after query where necessary. - Reference is made to appropriate secondary source data (examples given: petrol prices by outlet on oil company websites; health care items checked against information from the health authorities). - Reasons for major changes are documented based on analysis of component movements and findings from secondary source data. ### Investigation of statistical discrepancies and other indicators of problems in outputs - Regional CPIs are not calculated; therefore there is no potential for regional discrepancies. - The CPI compilation system is designed to produce consistent series across all parts of the CPI. - Checks are made of price series compiled for economic categories and at the subindices level to ensure significantly different movements are explainable. *Italic note in source: There were strong representations from users for the May 1998 reference base to be continued because of the extensive and continuing use of these indices in indexation arrangements. CPI data are also available showing all indices, including the total CPI, on a reference base of March 1997.* --- ### 3.5 Revision studies ### Routine studies and internal use of revision analyses - SI revises the CPI weights every year in March using HES data from three recent years and other sources. - Weights introduced in the revision for March 2004 reflected household expenditures in 2000 to 2002, except for groceries where the revision reflected expenditures in 2001 to 2003 (using cash register receipts data). - CPI staff calculate, as part of each revision, the effects of the new weights on the published indices; such studies are not published. - Revisions are carried out in March each year; an additional revision was carried out in December 2001 to reflect a sudden great increase in market share of low price stores: - The store weights and grocery headings were revised when the index for December 2001 was compiled, yielding a 1.3 percent decrease in the food component of the CPI or a 0.27 percent decrease in the total CPI. This decrease was directly reflected in the index for December 2001 and in the price movement between November and December 2001. - On the basis of more precise receipts data in the HES, the effects of low price stores were again evaluated in April 2002, resulting in a 0.10 percent lowering of the index. - The share of petrol sales by self-service outlets had significantly increased; in May 2003, changes due to this kind of substitution were introduced into the CPI, leading to a decrease of 0.07 percent in the CPI. These decreases were directly reflected in the index in April 2002 and May 2003. - Analyses of revisions are used to guide future decisions on potential changes in methods and the CPI basket, as evidenced by the revisions in December 2001, April 2002, and May 2003. - The actual CPI price series have never been revised. *Italic note in source: This treatment differs from a normal revision where the introduction of new weights does not affect the level of the index at that point.* --- ### 4 Serviceability ### Periodicity and timeliness - The CPI is published monthly according to the SDDS requirement. - The CPI is published on the eighth working day after the end of the month, which exceeds SDDS requirements. ### Consistency - The CPI is aggregated so there is complete consistency between the total CPI and the indices for expenditure groups, subindices, and economic categories. - No CPI series are produced for geographical areas, apart from dwelling ownership where there are separate indices for the capital area (multi-flat houses, single-flat houses separately) and outside the capital area. - Continuous CPI time series are available back to 1939 and, for the CPI excluding housing, back to 1914. Subindices are also available for long-term time series. - A broad summary of underlying CPI methodology for various periods is shown in tabular form in the Icelandic Historical Statistics. - SI constructs the CPI on a basis consistent with the household final consumption expenditure component in the NA, but trends in total CPI data differ from trends in the HFCE deflator over recent years; the mission considers that CPI and national accounts staff should review these trends periodically. - It would be desirable to make comparisons between CPI component data and relevant PPI series as PPI becomes more established. ### Revision policy and practice - CPI weights are revised in March each year according to a predetermined revision schedule made known to data users. - When new weights are introduced, some analytical comment is supplied concerning major changes in the weights; weight revisions are sometimes accompanied by methodological changes. - The CPI series themselves are published as final and are never revised. - There are no preliminary CPI data; the CPI is final when published. - As part of each weights revision exercise, CPI staff calculate the effects of the new weights on published indices for economic categories retrospectively for each of the previous 12 months (effects on the total CPI are not calculated for publication but are derivable). - Some analytical comment on major changes in weights is supplied when new weights are introduced. --- ### 5 Accessibility ### Data accessibility — presentation and content - The CPI is compiled and published for 12 major groups and 60 subgroups and for major groups, subgroups, and 270 subindices in SI’s publication Statistical Series and on SI’s website. - The CPI is also published for eight economic categories: domestic goods; agricultural products; domestic goods less agricultural products and vegetables; imported goods; imported goods less alcohol and tobacco; groceries (perishable items); core index 1 (CPI less agricultural products, vegetables, fruits, and petrol); and core index 2 (core index 1 less public services). - Other data provided to assist interpretation include: - the CPI for indexation of financial obligations, - the long-term CPI series from 1939 to date, - CPI weights for subindices, according to the COICOP classification, in November 1992, March 1997, and March of subsequent years, - percentage dissections for each expenditure group of the CPI in March 2004 on both the new and old bases, - index points contributions to the index aggregate, and - housing price indices (classified by three categories) from March 2000 to date. - The overall CPI is not presented in seasonally adjusted terms, and no plans exist for seasonally adjusting the CPI series. - The SI’s website provides user-defined table selection and formats (Excel, PC-Axis, Text-file, and HTML). ### Dissemination media, schedule, and simultaneous release - The main vehicle for releasing statistics is the SI’s website. - CPI data are released through a press release titled The Consumer Price Index in ....month, year which is included on the SI’s website; press releases are no longer routinely produced in hard copy but can be provided if requested. - The periodical publication Statistical Series: Prices, Wages, Income, Consumption publishes detailed and long-term CPI time series with analytical comment and graphs; it is available in Icelandic with English translation of tables and a short English summary, in printed format and on the SI’s website. - CPI data are also published in the Statistical Yearbook of Iceland and Iceland in Figures; charges apply to those publications but all price data are available free on SI’s website. - Latest CPI data are also available via e-mail, fax service, and by telephone to SI. - Precise release dates for the CPI during the coming calendar year are announced in a special press release at the beginning of October each year and are disseminated on the SI’s website. - CPI is released simultaneously to all users with one exception: three members of the Advisory Committee on the CPI meet with the CPI Division one hour prior to release to receive a briefing; this is a lock-up situation and Advisory Committee members must not make outside contact until the release time of 9:00 a.m. - Rigorous procedures ensure CPI is released at 9:00 a.m. on the scheduled day: - When finalized, two CPI staff members check all information and that all files in a specified list are loaded on computers; each signs that this has been done. - The CPI data to be released are sent to the server provider in encrypted form at 8:55 a.m. - The data are posted to SI’s website (as a press release) at precisely 9:00 a.m., delivered to the SI’s information center, and sent to specific users by e-mail and fax. ### Availability of unpublished data and user requests - Unpublished CPI data may be made available on request, but relatively few instances occur because detailed CPI data are available free on the website. - Data below the subindices level would not normally be released as they would not normally be considered sufficiently reliable. - SI evaluates requests for unpublished data based on proposed use; data for research purposes not otherwise published are generally supplied. - Charges are not usually made for release of unpublished data; limiting factor is availability of CPI resources. If a large workload is involved, the request would normally be declined. - The availability of additional nonpublished CPI data could be more specifically mentioned in publications, although considerable detail is already published. ### Metadata accessibility - CPI metadata are included on the IMF’s DSBB and are updated regularly. - Documentation covering concepts, scope, classifications, data sources, statistical techniques, and weighting pattern is included on SI’s website but only in Icelandic; an English translation is understood to be planned and would be desirable. - Technical papers on aspects of the CPI (dwelling ownership, housing costs, telecommunication services, measurement of inflation, measurement of quality) are listed on the website and are available mainly in English. - There is a need for a nontechnical guide to the CPI (about 20 pages) in both Icelandic and English. - Methodological revisions are noted on SI’s website when changes are made; when the CPI is rebased, the methodology is described and disseminated in both Icelandic and English on SI’s website. Recommendation (as stated in source): - Prepare and publish a guide to the CPI (of about 20 pages) describing the index in nontechnical terms, in both Icelandic and English. ### Assistance to users - Publications containing CPI data list main contact persons, telephone numbers, and e-mail addresses; the website also lists all relevant contact information. - SI Information Center and Prices Division staff provide prompt service and support and are available to answer queries by telephone or e-mail. - Assistance to users is monitored and reviewed periodically. - The Information Center and Prices Division handle about 250 enquiries per month. - SI does not produce a catalog of publications, but a simple list of all publications issued by SI is shown on the SI’s website, including prices. *Italic source: _cr05414 - 3.4 Assessment and validation of intermediate data and statistical outputs_* ### 2. Methodological soundness 2.1 Concepts and definitions ### _cr05414 - 2. Methodological soundness 2.1 Concepts and definitions ### Methodological soundness checklist (overview) - 2.1 Concepts and definitions: X - 2.2 Scope: X - 2.3 Classification/sectorization: X - 2.4 Basis for recording: X - 3.1 Source data: X - 3.2 Assessment and validation of source data: X - 3.3 Statistical techniques: X - 3.4 Assessment and validation of intermediate data and statistical outputs: X - 3.5 Revision studies: X - 4.1 Periodicity and timeliness: X - 4.2 Consistency: X - 4.3 Revision policy and practice: X - 5.1 Data accessibility: X - 5.2 Metadata accessibility: X — Nontechnical guide available only in Icelandic. - 5.3 Assistance to users: X ### 0. Prerequisites of quality — Legal and institutional environment (key findings) - SI (Statistics Iceland) is the primary producer and disseminator of Icelandic official statistics and is formally a government ministry. - Article 6 of the Regulation of the Central Government Administration assigns SI responsibility to organize, coordinate, and execute official statistics, and to collect, produce, and disseminate statistics on economic and social developments; SI has exclusive responsibility for compiling the NA and price statistics. - The Act on Statistics Iceland, 1913 authorizes SI to request and collect from public and private parties all information necessary to fulfill its duties. - The Act on the Consumer Price Index, 1995 mandates SI to compute and publish the Consumer Price Index (CPI); there is no corresponding Act for the Producer Price Index (PPI). - SI engages in inter-agency cooperation (examples): - A joint project with the CBI regarding the compilation of statistics of trade in invisible services and exchange of data on trade in goods and services. - Cooperation on GFS between SI and the MOF through the committee on budget accounting. - No conflicts of interest identified regarding data security; Data Protection Authority requirements enhance public trust in data security and assist SI's role. ### 0.1.2 Data sharing and coordination among agencies (assessment and recommendation) - Legal framework: - Article 6 of the Regulation of the Central Government Administration, No. 3, February 1, 2004 states SI is responsible for “organizing, coordinating and producing Iceland's official statistics.” The legislation does not give SI specific coordinating powers beyond this general statement and there are no regulations to this effect. - Practical coordination: - In practice coordination appears sufficient to ensure consistency and avoid duplication in many areas (examples include Customs; the Land Registry; the Government FMA; the Ministry of Social Affairs; the Institute of Labour; the Federation of Municipalities; the Ministry of Health; and the State Tobacco and Alcohol Monopoly). - Under taxation law, taxation and other authorities undertake specific collections for statistical purposes and SI has required use of specific classifications (e.g., ISAT 95 via the Official Gazette). - Cooperation is exercised through formal meetings and workshops but mainly through informal contacts. - Weaknesses: - SI lacks explicit authority to require other agencies to adopt statistical standards. - Coordination and cooperation are less than optimal in some areas, including government finance and balance of payments. - Indicates need for modern statistical legislation to strengthen SI’s coordinating powers and ensure adoption of national and international standards and elimination of duplication. - Recommendation (explicit): - Consolidate the legal framework by preparing a single, modern, and comprehensive statistical Act and take steps towards its enactment. - Include provision for strengthening coordination among statistical agencies and consistency of methodologies and statistical outputs by assigning the authority for coordination to the central statistical authority. ### 0.1.3 Confidentiality of individual reporters’ data (policies and practices) - Legal and procedural basis: - No specific confidentiality requirements in the Act on Statistics Iceland or the Act on the Consumer Price Index. - SI established Rules of Procedure for Treating Confidential Data (dated October 8, 2004) based on: - The United Nations' Fundamental Principles of Official Statistics - Government Employees Act, No. 70/1996 - Administrative Procedures Act, No. 37/1993 - Information Act, No. 50/1996 - Act on the Protection of Privacy as Regards the Processing of Personal Data, No. 77/2000 - Act on Statistics Iceland, No. 24/1913 - Act on the National Population Registry and Civil Registration, No. 54/1962 - Act on Notification of Change of Residence, No. 73/1952 - Domicile Act, No. 21/1990 - Rules on Publishing Certificates and Granting Information from the National Population Register No. 112/1958 - Key provisions of SI Rules of Procedure: - Article 3: All information gathered by SI for statistical purposes concerning specified natural or legal entities must be kept confidential; same applies to information in administrative registers used for statistics. Exceptions permitted with entity consent or where the authority previously participated in collection or provided data. - Article 3: Care must be taken to ensure published information cannot be traced to specific entities; SI has aggregation rules to prevent residual disclosure (important given Iceland's size). - Respondents are informed of confidentiality rights and obligations in questionnaires. - Article 5: SI employees required to maintain confidentiality; Government Employees Act Article 18 also imposes confidentiality obligations that remain after employment ends. - Employees sign a pledge of confidentiality as part of job contract; applies to permanent and temporary staff. No known breaches of pledge. - No penalties are prescribed in SI Rules of Procedure for divulging confidential information; Government Employees Act provides for dismissal under various circumstances. - Article 8: Confidential electronic data accessible only to employees working with the data; network administrator controls access under DG supervision; DG may grant time-limited written authorizations for access for specific purposes. - Article 10: DG may grant access to confidential data for research if personal identities are obliterated or encrypted and Data Protection Authority has not objected; access on SI premises under strict supervision. - Article 6 (paper data): Confidential paper data must be secure during processing and destroyed once utilization is complete; project managers and division directors decide preservation periods; normally not kept longer than necessary for error detection. - Article 7 (electronic data): Electronically recorded confidential data must be kept secure during processing and destroyed or personal identities obliterated/encrypted once utilization is complete; possibility to encrypt identities for future linkages according to special rules. - Annual controls: Office managers must investigate and report to DG yearly how confidential data are kept and supervise destruction of data on one designated day. - Physical and IT access controls: - SI premises closed between 11:00 p.m. and 7:00 a.m. each day; access to work areas by electronic code only. - Access to computer files restricted to staff as required by work; additional access must be approved by network administrator. ### 0.1.4 Ensuring statistical reporting (mandates and response burden) - Legal mandates and provisions: - Regulation of the Central Government Administration and the Act on Statistics Iceland authorize SI to collect information from public and private parties. - Taxation legislation requires taxation authorities to supply SI with all data required for statistical purposes; similar provisions apply to Customs. - Act on the Consumer Price Index (No. 12, March 2, 1995) mandates SI to compute and publish the CPI. - Article 2 of the Act on Statistics Iceland specifies fields SI is charged with investigating; national accounts and price statistics are not explicitly listed but Article 2 covers statistics prescribed by law or mandated by Government or proposed by SI in consultation with authorities. - PPI specifics: - SI has compiled the PPI for exported fish products since 1986. - The PPI for manufacturing products has only recently been commenced. - Reporting enforcement and practice: - Article 4 of the Act on Statistics Iceland authorizes SI to require reports that had previously been submitted to county sheriffs be submitted directly to SI; SI may return inadequate reports for correction and may request further information, subject to penalties as prescribed by law. - In practice, penalties have not been applied for failure to submit returns or for submitting false information. - Response burden and data collection mode: - Response burden is not a major issue for SI because of reliance on administrative records, especially in economic statistics. - SI provides assistance to respondents (e.g., point of contact). - For the PPI for manufacturing products, data are obtained electronically from respondents who post required information on a secure website at SI. *Source: _cr05414 - 2. Methodological soundness 2.1 Concepts and definitions (Price Statistics (Producer Price Index), pages excerpted)* ### 0.2 Resources ### 0.2 Resources ### 0.2.1 Staff, facilities, computing resources and financing are commensurate with statistical programs - Staff composition and size - SI has a staff of 97 full-time equivalent employees, comprising 27 in the population register division and 70 in statistical fields (including also administrative staff). - The PPI for manufacturing products staff allocation is approximately 1.5 full-time equivalents. - About 0.3 full-time equivalents are allocated for the PPI for fish products (located in the national accounts branch). - Total PPI staff amounts to a total of slightly fewer than two persons on a full-time basis. - Staff turnover is reported to be quite small and not problematic. - Qualifications, training and development - The great majority of staff members are university graduates. - Staff attend appropriate courses and participate in international seminars and workshops on statistical matters. - PPI staff members have appropriate qualifications and have participated in a number of conferences and seminars. - Appropriate emphasis is given to staff training and development on price index theory and practice. - Assessment of sufficiency and robustness - Present staff numbers are barely sufficient to cope with present demands. - The small number of PPI staff appears to be barely adequate to undertake the current functions and is not sufficiently robust to cope with unexpected staff turnover. - Staffing is clearly insufficient to undertake planned developments including: - increased sample sizes to improve data validity; - improved periodicity from quarterly to monthly publication; - increased scope of the indices beyond manufacturing and fishing products. - Recommendation: Carefully estimate staffing numbers required and address budgetary, recruitment, and training issues as a matter of some urgency. - Organizational review - Organizational arrangements for price indices within SI were reviewed a few years ago; a further review is recommended. - The review should focus on the desirability of bringing all price index work together in one organizational unit and consider staffing needs for prices work in the context of recent and planned developments. - Recommendation: Examine the desirability of concentrating price index expertise by bringing all price index staff together in one organizational unit. - Technology, computing and backups - SI emphasizes application of technology in collection, compilation, and dissemination of statistics; up-to-date equipment and well-known/proven software are used. - Standardization emphasized, particularly through Microsoft products; in-house development aimed at data warehousing applications. - Back-up procedures: daily, weekly, and monthly back-up cycles are observed; tape library in secure computer room; monthly tapes kept in a “safe box” designed to withstand excess heat and strong magnetic fields. - SI plans to mirror all data between two remote sites (locally and in another geologically safe site). - PPI computing resources: - Manufacturing products PPI: data obtained electronically; data sent from respondents’ computers to a secure website maintained by SI; a system exists to check supplied data and compile PPI series; need for some programmer support to further develop and refine this system. - Fish products price index: computing resources are adequate, but the Excel-based processing system could be streamlined and made more efficient. - SI regards the computing resources allocated to PPI compilation as adequate. - Premises and funding - SI’s office premises and furnishings are of a good standard. - Funding is determined by the central government budget; SI has some flexibility to determine specific uses of its allocation. - Budget appropriations have increased in recent years, reflecting new tasks and obligations and the move to new premises in 2003. - Funding is generally adequate, but budget appropriations tend to lag behind demand for services. - There are no formal forward planning systems in SI—planning scenarios exist on an informal basis. - Recommendation: Strengthen staffing back-up arrangements and increase staff resources for work on the PPI. - Recommendation: Review staff resource requirements for all price indices as soon as possible with a view to allocating sufficient resources to allow further planned developments and to provide a more robust organization for price statistics generally. ### 0.2.2 Measures to ensure efficient use of resources are implemented - Use of administrative registers - Long tradition of using administrative registers and records as the major source of data for financial efficiency. - Electronic reporting and dissemination - SI has greatly increased reliance on electronic reporting and electronic dissemination (e.g., electronic capture of prices information for the PPI and dissemination via the SI’s website). - Monitoring and performance review - Ongoing monitoring of collection, compilation, and dissemination processes to ensure efficiencies. - SI does not periodically review staff performance or cost resources used in the various statistical programs. ### 0.3 Relevance #### 0.3.1 Monitoring relevance and practical utility - User contact and advisory arrangements - PPI staff had significant contact with a range of users when first establishing the PPI for manufacturing products. - There is no advisory body on the PPI, but consideration is being given to establishing such a group. - User survey results - The user survey conducted for this ROSC assessment indicates a large proportion of respondents were satisfied with the coverage of price statistics, their level of detail, frequency, accessibility, and underlying methodology. - A large percentage of respondents were satisfied with the timeliness of price statistics, their accuracy, and the availability of metadata. - Note: These responses relate to price statistics; separate responses were not obtained for the CPI and the PPI. - International engagement - PPI staff has participated in international statistical meetings and visited neighboring countries to study PPI methodology and practice. - SI has been a member of the International Statistical Institute since around 1930; the DG of SI has been President of the International Association of Official Statistics. ### 0.4 Other quality management #### 0.4.1 Processes to focus on quality - No formal quality management program is in place. - SI actively participates in discussions about quality and has examined quality meeting practices in Nordic and other European countries. - Data quality is very much emphasized within SI. #### 0.4.2 Processes to monitor quality of the statistical program - Quality aspects are discussed with subject matter managers in annual planning and follow-up meetings. - SI regularly monitors response rates and timeliness. - Double checking of compilation work is practiced in the PPI. - The ARC is produced every autumn for the coming year. - EEA cooperation: under Article 76 of the EEA Agreement, Contracting Parties shall develop and use harmonized methods, definitions, and classifications; common methodology, quality standards, and monitoring are specified in many statistical fields, reinforcing SI’s focus on quality. #### 0.4.3 Processes to deal with quality in planning - SI considers quality issues in the annual planning process at the start of each year. - As part of this process, PPI staff outline plans for the coming year to make other staff aware of developments and needs for cooperation. - SI has identified many opportunities for improving data quality and acted on them through ongoing monitoring, periodic reviews, and feedback from users on quality issues. ### 1. Assurances of integrity #### 1.1 Professionalism - Professional independence and legal basis - Article 6 of the Regulation of the Central Government Administration establishes that SI has exclusive responsibility for compiling price statistics. - SI has had a long tradition of professional independence; other institutions have respected the agency’s authority. - SI is a full-fledged ministry; the DG, as head, has professional independence to conduct the affairs of the agency. - The current DG was appointed for an open-ended, life-time term and can remain in the post until he reaches the retirement age of 70. (Note: the tenure description is given in the context of historical practice.) - Terms and conditions for appointing the head were amended with the introduction of the Government Employees Act No. 70 of 1996: under the new Act, the DG is appointed by the Minister responsible for Statistics for a fixed five-year term, subject to renewal; the Minister may decide to advertise the post as vacant at the end of the term. - Article 36 of the Regulation gives the Minister authority to transfer appointees (including the DG) to another post under his authority or under another government authority, if that authority requests the transfer. - Directors within SI are subject to the same terms and conditions of employment as the DG. - The DG has the sole authority to appoint staff based on guidelines of the Government Employees Act; staff appointed on an indefinite contract and may be relieved upon receiving three months notice; vacant posts are publicly advertised; the DG establishes recruitment criteria. - Professional engagement and access - The DG and staff routinely participate in external seminars, expert groups, and task forces established by regional and international statistical bodies, including Eurostat and the OECD. - Staff undertake regular study trips to other statistical agencies in the Nordic region and participate in network groups of the Nordic statistical agencies. - Staff members have free, unlimited access to a wide range of international academic journals and research databases through a nationwide access portal. #### 1.1.2 Independence of statistical choices - The DG has sole authority to decide on statistical matters and may delegate to staff. - The agency decides on statistical techniques, methodology, and data sources based on need to implement best international practices, but decisions are influenced by cost considerations and resource constraints. #### 1.1.3 Right to comment on misuse - The DG is entitled to provide feedback on statistics to the press without external clearance. - Department heads have authority, without DG approval, to comment on erroneous interpretation of statistics compiled by their divisions. - Division heads monitor news reports following dissemination of official SI press releases; journalists routinely submit draft news reports to staff to verify accuracy before dissemination. ### 1.2 Transparency - Terms and conditions public - SI publishes the terms and conditions under which statistics are compiled on its website in Icelandic and in English; a hardcopy of the legislation is available in the agency’s library. - Terms and conditions are also presented on the DSBB. - When SI conducts surveys, respondents are informed of the general purpose and that information will be used for statistical purposes only. - Pre-release access - Access is not given to PPI data prior to release. - Identification of products - All SI products are clearly identified with the agency’s name and logo on publications and the SI’s website; publications advise users to identify the source when quoting SI. - Advance notice of major changes - SI may provide advance notice of changes in methodology, where appropriate; advance notice was given that a PPI for manufacturing products was being developed and meetings were arranged to solicit user views. ### 1.3 Ethical standards - Ethical guidelines and confidentiality - SI does not have comprehensive ethical guidelines of its own; staff behavior is guided mainly by the Government Employees Act. - The Rules of Procedure for Treating Confidential Data (in place since 2000 and formally adopted by SI in October 2004) establish additional guidelines for staff on treatment of collected information. - Staff are bound by the Data Protection Act No. 77 of 2000. - Staff take an oath of secrecy upon being hired and are made aware of regulations pertaining to confidentiality. - Staff are expected to seek the approval of the DG before undertaking any work outside the agency; the DG reports never having encountered a case of conflict of interest during his 20-year tenure. - No formal system reminds staff of ethical guidelines, but rules and regulations are readily available on the SI’s website and in the SI’s library. ### 2. Methodological soundness - PPI publication and structure - SI disseminated the PPI for the first time on May 13, 2004. - The PPI is at present compiled as a quarterly price index with a reference period of fourth quarter 2003 = 100. - The weights at present relate to the year 2002 and are based on the results of the annual PRODCOM (industrial) survey. - The PPI is a Laspeyres annual chain-linked index. - The PPI currently covers most of manufacturing production. - The PPI measures changes in prices received by producers for their products and covers both domestic sales and exports. - Fish products index - SI publishes a monthly price index for exports of fish products. - The price index for exports of fish products is an annually chained Laspeyres index, with a reference base of 1986 = 100. - Results of the fish products price index are incorporated with the new PPI for manufacturing products for publication purposes. - Scope and components - The PPI has two published components: manufacturing products and fish products; no additional detail is released at present, though further details are published separately for the monthly fish products index. - Quarterly unit value indices for all exported and imported goods are compiled by the national accounts division using Customs Department information: compiled quarterly as Laspeyres indices and annually as Fisher ideal indices; quarterly unit value indices are recompiled as Fisher indices when annual indices are compiled. - This assessment covers the PPI for manufacturing products and fish products. #### 2.1 Concepts and definitions - Standards and manuals followed - The 1995 ESA is followed regarding determination of index output weights for the PPI. - Concepts and definitions given in the Producer Price Index Manual (PPI Manual) are followed regarding specification of individual goods and services measured on a continuing basis. - The weighting concept is the market output of finished goods and services (as defined in 1995 ESA) or value of production (as defined in the PPI Manual). - Pricing basis and calculation - Basic prices are obtained and used in the PPI; only actual transaction prices are used. - Export prices for both manufacturing products and fish products are f.o.b. prices and are calculated from quantities and values obtained monthly from selected respondents. - Average prices for each respective quarter are used in index calculation. - Quarterly prices for manufacturing products are derived from total quantities and values of sales for each quarter, compiled from monthly quantities and values reported by respondents. - Quarterly price indices for fish products are derived from monthly price indices. - Classifications and confidentiality - The PRODCOM list is used as the basis for output weights and for compilation of indices within the PPI; PRODCOM is linked to NACE Rev.1.1 at the four-digit level. - NACE Rev. 1.1 is comparable to the ISAT 95 at the four-digit level. - The PPI is published only for manufacturing products and fish products, although more detailed indices for fish products are available elsewhere. - Plans exist to publish more detail for manufacturing products, but confidentiality issues likely limit indices to three or four broad industry groupings. - The PPI is not seasonally adjusted. *Source: _cr05414 - 0.2 Resources* ### 2.2 Scope ### 2.2 Scope ### Coverage and scope assessment - The PPI covers manufacturing products and fish products. - Manufacturing production is defined as industries within Divisions 14-36 of NACE Rev. 1.1 with the exception of 22.1 (publishing) and 35.1 (building and repairing of ships and boats), in accordance with EU Council Regulation No. 1165/98 concerning short-term statistics. - Mining and quarrying industries are included in Manufacturing for PPI purposes. - The PPI for fish products relates solely to fish products that are exported; exports are a very large component (at least 95 percent) of total fish production. - Energy and construction industries are not covered in the PPI. - It is envisaged that the scope of the PPI will ultimately be expanded to include energy and construction industries, but there is no firm timetable for these extensions. - Rationale for deferral: - The energy industry is currently undergoing significant structural changes, and SI considers that the expansion of the PPI in this regard should be deferred until these changes are fully effected. - SI is considering the possibility of developing a PPI for construction taking— as a starting point, the existing building cost indices— and supplementing this information with selling price data. - All resident market enterprises are in scope for the PPI. - There are no free trade zones. - Bonded warehouses are not included because no selected enterprises sell manufactured products from such warehouses. - The PPI excludes own-account production of goods for own final consumption and capital formation, services, and the production of illegal goods. ### Key quantitative context (as reported) - Exports are at least 95 percent of total fish production. - Construction and energy account for about 9 percent and 3 to 4 percent of GDP, respectively, compared with about 8 percent for Fishing and Fish Processing and about 9 percent for Manufacturing and Mining and Quarrying. ### Recommendation - Develop a phased and prioritized work program to ensure the planned improvements in the producer price indices. ### Classification and sectorization - ISAT 95 is used to classify enterprises and establishments according to their principal economic activity, down to the five-digit level. - The PRODCOM classification is used to classify products at the nine-digit national level, which can be linked to the eight-digit PRODCOM list. - The individual product classification system of each enterprise is used to classify the products within each PRODCOM nine-digit group. - Note: The ISAT 95 is comparable to NACE Rev. 1.1 at the four-digit level. ### Basis for recording and valuation - Weights and prices are valued at market prices. - Prices are ex-factory prices excluding VAT, other taxes on products, and transport charges separately invoiced; in practice these prices are equivalent to basic prices because there are no subsidies paid on products and production. - For exports of manufacturing and fish, products are f.o.b. - Only actual transaction prices are used. - Prices collected relate to detailed specifications of each transaction; each transaction is defined as narrowly as possible and established through discussions with each respondent. - Specifications for pricing: - Transaction terms for each individual customer (significant or unusual price changes should be identified and explained or queried with enterprises). - Product specifications (a change in specification would normally result in a different product number). - Recording is done on an accrual basis: - Weights and prices are based on sold production on a gross sales basis; therefore both weights and prices do not necessarily relate to actual production in the period concerned. - Weights are based on the PRODCOM survey, which records volume and value of sold production in accordance with the requirements of the European Community survey of industrial production. - For industrial finished goods the values used in calculating weights are total invoiced sales without correction for changes in inventories. - Average prices for each respective quarter are used in the index calculations. - Quarterly prices for manufacturing products are derived from total quantities and values of sales for each quarter, compiled from monthly respondent reports. - Quarterly price indices for fish products are derived from monthly price indices. - Consistent with the PPI Manual, prices are those applying at the time when there is a change of ownership from producer to buyer. - For fish products the values used for calculating weights are based on exports data on an f.o.b. basis, derived mainly from Customs declarations. - Grossing/netting procedures: - Stages of processing indices are not calculated, and transactions between establishments of the same enterprise are not covered; therefore net weights are not an issue in the PPI. ### Source data, data collection, and coverage - SI maintains a business register as the basis for enterprise/establishment surveys and as the main framework for conducting the PRODCOM survey. - The business register relies mainly on tax data such as monthly PAYE records, bi-monthly VAT data, Standardized Annual Accounts, and daily data from the Enterprise Register maintained by the Director of Internal Revenue. - By law (No 17/2003), all enterprises are required to be registered in the Enterprise Register maintained by the Director of Internal Revenue. Data contained in the Enterprise Register are supplied to SI on a daily basis. - The data provided for incorporation in SI’s business register include an activity code for each employee, according to ISAT 95. - To supplement the business register, SI surveys enterprises annually to provide detailed data on local units. - PRODCOM survey (reference year 2003): - Covered all enterprises exceeding a turnover threshold of 30 million ISK. - The survey covered about 600 enterprises, accounting for about 97 percent of total industrial turnover. - The survey population is derived from SI’s business register, as well as VAT and PAYE data from the Director of Internal Revenue. - Questionnaires are tailor-made for each enterprise; data from the previous year are included to assist respondents. - Pretesting and observation studies took place when PRODCOM was established in 1996, with annual review subsequently. - Response rate for the PRODCOM survey is about 85 percent, with imputation for nonresponse cases. - PPI data collection program: - About 23,000 price observations are obtained each month. - The PPI data collection covers about 40 percent of total turnover for manufacturing as defined. - Coverage by ISAT 95 levels: - At the four-digit level, activities accounting for about 71 percent of total turnover are covered. - At the two-digit level, activities accounting for about 84 percent of total turnover are covered. - SI plans to enlarge the PPI sample to increase coverage from 40 percent to about 47 percent. - After expansion: four-digit level coverage about 80 percent of total turnover; two-digit level coverage about 94 percent. - Fish exports price index: - Data obtained from a sample survey of several exporters providing prices for main products. - The sample covers nearly 50 percent of the export value of fish products. - Weights reflect the composition of total exports of fish products in the previous year. - Enterprises are selected using judgment sampling; selected transactions determined in cooperation with each enterprise. - Scope of transactions ranges from a few representative items per PRODCOM category to complete coverage of all transactions for an enterprise. - Respondents create text files and send them electronically to a secure dedicated website at SI. - For manufacturing PPI, basic value and quantity data from each enterprise (from which average prices are derived) are reviewed and checked when received. - New enterprises are added as identified through tax data received monthly or other sources such as the media. - Index publication currently only for fish products and manufacturing products; more disaggregated fish indices are available on SI’s website or on request from the contact person. - Media reports are monitored for price developments in manufacturing and taken into account. - PPI staff maintain ongoing contact with producers and the business community. - International guidance: - The PPI Manual has been the main source concerning international standards and has been closely followed. - Information from Eurostat and PPIs in other countries has also been examined. ### Source data quality, timeliness, and validation - Source data for weights and prices are consistent with PPI definition, scope, classification, valuation, and timing requirements. - PPI data are collected at a monthly frequency but currently only quarterly indices are compiled. - Publication occurs about 45 days after the end of the quarter. - As regards price collection, virtually 100 percent response is achieved within each quarter; selected enterprises send reports electronically each month directly from their computer systems to SI. - PRODCOM survey checks and validation: - Each questionnaire is evaluated and entered manually into SI’s computer system. - Response to the PRODCOM survey is about 85 percent; outstanding questionnaires are imputed using previous year’s data, VAT data, and key data sometimes obtained from the outstanding enterprise. - Sampling errors are not calculated for PRODCOM as it is virtually a census. - Collected data are subject to manual and computerized checks: manual checks for formal content; computerized checks for internal consistency and comparability over time. - Outliers are identified and confirmed with respondents. - Administrative data (PAYE, VAT) are checked for general validity when received, especially activity codes. - Price survey quality procedures: - Response rates for the PPI manufactured products and fish products are virtually 100 percent. - Substantial computerized editing procedures examine reported prices and identify outliers and unusual price changes. - Outliers in terms of price change for the previous month and quarter are identified in tables and shown in graph form, including their effect on aggregated indices. - PPI data for each enterprise are checked thoroughly; enterprises are contacted for clarification when abnormal fluctuations appear. - Sampling errors are not calculated for price surveys as they are based on judgment samples. - Response error/bias minimized due to direct transfer from respondent’s computer system to PPI computer system. - New goods bias minimized because most enterprises provide information on all goods produced and sold each month; new enterprise bias unlikely due to small market and monitoring. - Substitution bias is minimized within each enterprise by calculating a Fisher ideal price index between consecutive periods. - Limited opportunities to compare PPI data with other related sources exist currently because PPI series are very new; comparisons with relevant CPI components are recommended for the future. ### Statistical techniques, data processing, and handling of missing/new items - Data collection is electronic with direct transfer to minimize processing errors; all work is double-checked during index production. - Adjustments to unit records are made only when clearly warranted and can be identified in datasets. - If there is a lack of price data in the fish product index, the price from the previous month is used. - Replacement and new items: - Replacement items selected from other items produced at the same enterprise, based on volume of sales and representativeness. - New products introduced when an old item is permanently missing (linked using overlap, link to show no change, or quality adjustment) or when sample is augmented to increase coverage. - Overlap method is generally used for linking. - New products may be introduced at rebasing or followed from time of introduction with a special base price; a significant new product may warrant a mini-revision between annual reviews. - Procedures to improve coverage and definitions: - New enterprises are added when identified through tax data or other sources. - Grossing-up factors are derived scientifically based on sample design. - Treatment of missing prices and seasonal items (per PPI Manual): - Prices for temporarily missing products are handled by imputing price based on change in similar product prices or carrying forward last reported price. - Products are rarely missing temporarily due to detailed specification data collection. - No special procedures for seasonal items currently; seasonal products are treated the same as other missing prices. - Seasonal product imputation will need exploration before monthly publication. - When products become permanently unavailable, replacement products are selected automatically when index is calculated. - In the fish products price index, price of unavailable product is maintained until the next annual change in the base year (not normally recommended practice but applied due to seasonality). - Quality changes: - Where overlap pricing is not appropriate, quality changes are evaluated with enterprises and prices adjusted accordingly. - Quality adjustments (using internationally accepted methods) are made when quality differences are observed in replacement products. - Index compilation methodologies: - Weight reference period is updated in the fourth quarter each year; weights at detailed level (within elementary aggregates) are updated quarterly. - When new weights are introduced, new index is linked to old index using internationally accepted methods. - Elementary level indices for manufacturing products are calculated using the Fisher ideal price index. - Weights are calculated from values of sales reported by each respondent. - Price change is calculated using a matched sample approach (prices available in consecutive quarters). - Laspeyres formula is used to aggregate elementary indices to higher levels; product indices are aggregated by industry using the PRODCOM classification. - The Laspeyres index formula is used for compiling the fish products index at all levels. - A short-term price change from the previous period is used for the PPI for manufacturing products. - The current weight reference period and price reference period are the same for the first level indices. - For the second level index, no indices have been available to update the weights, so the Young Index has been used. The Lowe Index will be used as soon as practicable. *Source: 2.2 Scope (Price Statistics — Producer Price Index).* ### 3.4 Assessment and validation of intermediate data and statistical outputs ### 3.4 Assessment and validation of intermediate data and statistical outputs ### Assessment and validation practices - Intermediate results are validated against other information where applicable. - The PPI is a newly developed index and PPI component data are not yet regularly compared with similar component series from the CPI. - For fish products, comparisons are made with unit value indices for exports. - As the PPI series is further developed, these kinds of comparisons will become increasingly worthwhile and are encouraged. - Statistical discrepancies in intermediate data are assessed and investigated. - Part of the regular PPI review process involves investigating large or unusual changes in aggregate indices for particular industries or products. - Statistical discrepancies and other potential indicators of problems in statistical outputs are investigated. - No inconsistencies or statistical discrepancies exist in the PPI at various levels because it is compiled on a completely consistent basis throughout. --- ### 3.5 Revision studies ### Revision-study practices and findings - The PPI weights are revised in the fourth quarter each year. The weights for the fish product PPI are revised annually. - As part of each revision, PPI staff calculate the effects of the new weights on the published indices. - For the actual price series: - There have so far been no revisions of the PPI for manufacturing products. - There have been reasonably frequent revisions for fish product indices, usually confined to the previous month. - For the fish product index, SI studies revisions to data arising from the collection and compilation phases to ascertain causes of revisions and to improve data collection and compilation in future periods. --- ### 4 Serviceability ### 4.1 Periodicity and timeliness - Periodicity follows dissemination standards: - The PPI is compiled on a monthly basis but is published quarterly and therefore does not meet SDDS requirements. - SI is availing itself of a flexibility option on the periodicity of the PPI. - A monthly PPI is being developed and is planned to be completed by the end of 2005. - The price index of exported fish products is already compiled monthly. - Timeliness follows dissemination standards: - The PPI is published 45 days after the end of the reference quarter and therefore does not meet SDDS requirements. - SI is availing itself of a flexibility option on the timeliness of the PPI. - A monthly PPI is being developed and is planned to meet the SDDS requirement of dissemination within a month of the end of the reference month. ### 4.2 Consistency - Statistics are consistent with the dataset: - Price series compiled within the dataset by industry and product are entirely consistent. - Statistics are consistent or reconcilable over a reasonable period: - The PPI for manufacturing products was introduced in May 2004, and consistent time series data are only available from the fourth quarter of 2003. - The price index for export of fish products has been compiled as an annually-chained Laspeyres index since 1986, on a base 1986 = 100. - Statistics are consistent or reconcilable with other data sources/frameworks: - The PPI is newly developed and PPI component data are not yet regularly compared with similar component series from the CPI. - For fish products, comparisons are made with unit value indices for exports. ### 4.3 Revision policy and practice - Revisions follow a regular and transparent schedule: - The PPI weights are to be updated in the fourth quarter of each year. This schedule was announced when the PPI series was first published and is also announced in the DSBB. - The weights for the fish products PPI are also updated annually. - The actual PPI series for manufacturing have not been revised to date. In principle the PPI series are subject to revision at any time. - If changes are necessary to data already published, they will be shown in a press release, posted on the SI’s website, with explanations about the changes. - Revisions have been made to the PPI series for fish products, and these are shown in published tables. - Preliminary and/or revised data are clearly identified: - The PPI data for manufacturing products are published as final data but may be subject to revision. In practice they have not yet been revised. - Revisions to fish-product PPI series are shown in published tables; however, the revised data are not indicated as such in the published tables through an annotation symbol. - Recommendation: Clearly indicate revised data in published tables. - Studies and analyses of revisions are made public: - Revisions to weights have not yet occurred for the PPI manufacturing component. - The nature of the index and the process of introducing new weights will be described in detail in a document, to be issued in hardcopy and on the SI’s website. This document is expected to be available in early 2006. - Revisions to weights for the PPI for fish products occur annually and are announced in published statistics. - Revisions to PPI data for manufacturing products have not yet occurred. Revisions to PPI data for fish products are shown in publications. --- ### 5 Accessibility ### 5.1 Data accessibility - Presentation and formats: - The PPI data on the SI’s website are at present restricted to the quarterly indices and quarterly changes from last quarter for the total PPI and for fish products and manufacturing products. - Data are clearly presented in PX Web tables that allow download in Excel, PC-Axis, Text-file, and HTML and permit user-defined tables, graphs, and charts. - Main findings are reported in a press release with a link to the PX Web tables. Basic footnotes and explanations are attached to the PX Web tables. - Main limitations: lack of detailed PPI data, lack of monthly data, and restricted scope of the PPI. - For exported fish products, disaggregated price indices are available and can be obtained on the SI’s website or on request. - Dissemination media and format: - Statistics are disseminated in ways that facilitate redissemination in the media. - Current statistics and longer time series for fish products can be accessed through the SI’s website. SI’s general publications include broad-level PPI data. - Release schedule: - The PPI is released in accordance with the ARC which covers the calendar year. The ARC for the coming year is released in October. The ARC indicates in advance the release date for the PPI and is shown on the DSBB and on the SI’s website. - The PPI data are always released according to the schedule of 45 days after the end of the quarter. - Equal access and advance release: - The PPI is released at 9:00 a.m. on the SI’s website. Simultaneously a news release is sent to the media and other users by e-mail. - The news release is free of charge; the description is open for all and includes a hyperlink to the website. - No advance release of data is given. - Statistics not routinely disseminated: - PPI data additional to the published series have so far not been made available because the PPI is still developmental and some major confidentiality issues remain to be resolved. - More detailed data on price indices for fish products are available on request and have been supplied to users. ### 5.2 Metadata accessibility - Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques: - When publishing the PPI for the first time (on May 13, 2004) a short methodology description was given. - A general description of the PPI is included on the DSBB, with a hyperlink from the SI’s website to the DSBB section covering the PPI. - SI has plans to prepare metadata for inclusion on the SI’s website in the first half of 2005. - A more comprehensive document, to be published both on the SI’s website and in hardcopy, is planned and expected to be released in early 2006. - Recommendation: Prepare detailed documentation in Icelandic and in English, covering concepts, scope, classifications, data sources, statistical techniques, and weighting pattern. - Recommendation: Clarify methodology descriptions for price indices to emphasize that the introduction of new weights does not affect the level of the indices at the time of introduction. - Levels of detail adapted to audience: - A very general description of the PPI is available at present, with a hyperlink to the DSBB. - Recommendation: Include brief metadata about the PPI in general statistical publications, together with cross-references to more complete descriptions. ### 5.3 Assistance to users - Contact points: - News releases are sent by e-mail; recipients can request further information. The news release indicates the name, telephone number, and e-mail address of the appropriate contact person. - The name and e-mail address of the expert in charge of the relevant statistics are indicated, as well as the main telephone number, fax number, and address of SI in the publication Statistical Series. - Contact information is also shown on the SI’s website and on the DSBB. SI staff are available to answer queries by telephone or e-mail. - Catalogs and charges: - SI does not issue a catalog of statistical products and services but includes a list of publications on its website showing the prices of each publication. - Much of this data may also be accessed from the SI’s website free of charge. --- ### DQAF (July 2003): Summary of Results for Price Statistics (Producer Price Index) ### Key assessment items and comments (selected) - 0.1 Legal and institutional environment: Some lack of coordination; legislation assigning coordination role is important. (Assessment: X) - 0.2 Resources: Staff resources barely adequate to maintain current compilation and meet requirements of planned new developments. (Assessment: X) - 2.2 Scope: Scope limited to manufacturing and fishing products. (Assessment: X) - 3.4 Assessment and validation of intermediate data and statistical outputs: Practice observed. (Assessment: X) - 4.1 Periodicity and timeliness: Only quarterly published, 45 days after end of quarter. (Assessment: X) - 4.2 Consistency: No long-term series for manufacturing products. (Assessment: X) - 4.3 Revision policy and practice: Revisions not clearly identified. (Assessment: X) - 5.2 Metadata accessibility: Only a general description published. (Assessment: X) *Source: 3.4 Assessment and validation of intermediate data and statistical outputs — _cr05414 - 3.4 Assessment and validation of intermediate data and statistical outputs* ### 0.1 Legal and institutional environment ### 0.1 Legal and institutional environment ### Overview - The GFS examined are those of the general government account prepared in the national accounting framework and are broadly consistent with the guidelines in the IMF’s Government Finance Statistics Manual, 2001 (GFSM 2001). ### Institutional responsibilities and legal framework - Statistics Iceland (SI) is formally a government ministry and is responsible for organizing, coordinating, and executing official statistics in Iceland, including exclusive responsibility for compiling the National Accounts (NA), which include the general government account and price statistics (Article 6 of the Regulation on Central Government Administration). - The Act on Statistics Iceland, 1913 (also referenced as Act on Statistics Iceland No. 24/1913 and the Statistics Act No. 29/1895) authorizes SI to request and collect from public and private parties all information necessary to fulfill its duties. - Until 2002, the NEI compiled the GFS; after its abolishment, GFS responsibilities were transferred to SI. - SI collects central government operational information from the MOF, local government data from the Association of Local Authorities in Iceland (ALA), and Social Security Fund (SSF) information directly from the SSF. - The FMA (an agency of the MOF) compiles and publishes monthly data on central government outstanding debt and on central government operations on a modified cash basis; outstanding debt data are obtained from the CBI and the National Debt Management Agency. - Publication of the annual Frumvarp til fjárlaga (Budget Proposal) and the annual Ríkisreikningur (State Accounts) is required by Lög um fjárreiður ríkissins (Act No. 88, May 27, 1997, Clauses 7 and 21). Recommendation (legal framework) - Consolidate the legal framework by preparing a single comprehensive statistical act and assign the authority for coordination of official statistics, in the act, to SI. ### Data sharing, coordination, and user liaison - Article 6 of the Regulation on Central Government Administration, No. 3, of February 1, 2004, states SI is responsible for “organizing, coordinating and producing Iceland's official statistics,” but the legislation does not provide specific coordinating powers beyond this general statement. - In practice, SI’s coordination powers are sufficient; cooperative agreements exist for trade in goods and services and GFS. Cooperation is exercised through formal meetings, workshops, and frequent informal contacts. - SI, the FMA, the MOF, the CBI, the ALA, the SSF, and the National Debt Management Agency have established specific arrangements for the exchange of data in agreed formats. - SI has created a National Accounts Users Committee composed of representatives from the MOF, the CBI, economic faculties of three universities (University of Iceland, University of Reykjavik, and Bifröst School of Business), the Federation of Labour, the Confederation of Icelandic Employers, and the research departments of the three largest commercial banks. The Committee is scheduled to meet approximately three times a year to inform SI on the relevance and practical utility of GFS. ### Confidentiality, access, and ethical safeguards - There are no specific confidentiality requirements in the Act on Statistics Iceland, but SI has Rules of Procedure for Treating Confidential Data (dated October 8, 2004) based on: - United Nations' Fundamental Principles of Official Statistics - Government Employees Act, No. 70/1996 - Administrative Procedures Act, No. 37/1993 - Information Act, No. 50/1996 - Act on the Protection of Privacy as Regards the Processing of Personal Data, No. 77/2000 - Act on SI, No. 24/1913 - Act on the National Population Registry and Civil Registration, No. 54/1962 - Act on Notification of Change of Residence, No. 73/1952 - Domicile Act, No. 21/1990 - Rules on Publishing Certificates and Granting Information from the National Population Register, No. 112/1958 - Article 18 of the Government Employees Act, No. 70/1996: “Each employee is obliged to observe confidentiality in regard to matters of which he gains knowledge in his work and shall be regarded as confidential according to law, the instructions of superiors or by the nature of the matter. The obligation of confidentiality remains even if the employee concerned leaves his employment.” - All employees sign a pledge of confidentiality before commencing work; the pledge applies to permanent and temporary staff. - SI staff are informed of the United Nations' Fundamental Principles of Official Statistics and the International Statistical Institute's Declaration on Professional Ethics. ### Legal mandate for reporting and measures to encourage response - SI is authorized to request and collect necessary data from public and private parties; specific provisions in taxation and Customs legislation make it mandatory for those authorities to supply SI with required data. - Article 2 of the Act on Statistics Iceland states SI shall compile statistics prescribed by law or mandated by the Government or which SI may propose in consultation with competent government authorities. - All government agencies, bodies, and administrative offices are required and obliged to supply SI any requested data (Act on Statistics Iceland No. 24/1913 and Statistics Act No. 29/1895). - SI reduces response burden by relying heavily on administrative records and provides assistance to respondents (e.g., point of contact); SI encourages responses by telephone calls and focus groups. - Final data on all levels of government are submitted to SI by the responsible agencies by August of the following accounting year after audit by the Office of the Auditor General. - For the MOF, publication of the annual Ríkisreikningur and annual Frumvarp til fjárlaga is required by Lög um fjárreiður ríkissins (Act No. 88, of May 27, 1997, Clauses 7 and 21). ### Resources: staff, facilities, computing, and financing - SI staffing: - SI has a staff of 97 full-time equivalent employees, comprising 27 in the population register division, and 70 in statistical fields (including administrative staff). - Two employees in SI (one full-time and one part-time) compile the macroeconomic statistics in the government finance area. - In January 2005, the two employees in the National Accounts Department responsible for compiling GFS have on average 3.5 years working experience in this area of statistics. - SI has made effective use of technology to reduce reliance on staff; staff turnover is small. - Training: - Most training in GFS occurs on the job; SI is obtaining services of an expert in NA for theoretical and on-the-job training. - None of the current staff has attended an IMF course on GFS or received any official training in GFS. - IT and systems: - A modern computer system exists to collect and process data, maintain databases, receive source data automatically, and disseminate compiled statistics. The system stores bridge and derivation tables linking accounting and budgeting source data and the GFS in an accessible form. - MOF staffing: - In the MOF three staff members take care of evaluation and dissemination of monthly statistics on central government debt and central government operations as a small part of their job description. Recommendation (resources) - Strengthen back-up arrangements and increase staff resources for work on GFS; increase the level of training made available to GFS compilers. ### Quality management and monitoring - SI sets priorities and continuously searches for ways to improve efficient use of resources; ongoing monitoring of collection, compilation, and dissemination processes is in place. - Quality checks regularly monitored include coverage, classification, missing or erroneous recordings, internal consistency, and consistency between alternative or linked data sources (SI, the MOF, the SSF, and local governments). - All deviations between data disseminated by the MOF and SI are thoroughly checked and recorded as part of an annual reconciliation. - Quality aspects are discussed with subject matter managers in annual planning and follow-up meetings. - Under EEA cooperation (Iceland as one of three EFTA States that is a Contracting Party to the EEA Agreement), Article 76 gives the basis for statistical cooperation, development and use of harmonized methods, definitions, and classifications, and specifies common methodology, quality standards, and monitoring. - SI recognizes trade-offs among quality considerations (such as accuracy and timeliness) explicitly in the context of general government statistics and local government reporting. ### Assurances of integrity and professionalism - SI has a long tradition of professional independence; the Director General (DG) as head of the ministry has professional independence. - DG appointment and tenure: - The current DG was appointed for an open-ended, life-time term and can remain until retirement age of 70. Historically, the current DG is only the third appointee since 1914. - Under Government Employees Act No. 70 of 1996, the DG is appointed by the Minister for a fixed five-year term, subject to renewal; the Minister may advertise the post as vacant at end of term. - Article 36 of the Regulation gives the Minister authority to transfer appointees (including the DG) to another post under his authority or another government authority if requested. - The DG has sole authority to appoint staff based on Government Employees Act guidelines; staff are appointed on indefinite contracts and may be relieved with three months notice; all vacant posts are publicly advertised. - The DG has sole authority to decide statistical matters and may delegate to staff; decisions on techniques and sources are based on best international practices but influenced by cost and resource constraints. - The DG and division heads can comment publicly on erroneous interpretation of statistics without outside clearance; division heads monitor news reports after SI press releases. - SI staff participate in external seminars and task forces (Eurostat, OECD) and have access to international academic journals and research databases through a nationwide access portal. *Source: _cr05414 - 0.1 Legal and institutional environment* ### 1.2 Transparency ### 1.2 Transparency ### 1.2 Transparency — Terms, preaccess, identification, and advance notice - SI publishes the terms and conditions under which statistics are compiled on its website in Icelandic and in English; a hardcopy of the legislation is available in the agency’s library. - When SI conducts surveys, respondents are informed of the general purpose and that information will be used for statistical purposes only. - SI provides annual general government data to the Economic Division of the MOF prior to wider dissemination for forecast development; there is no established schedule for providing preaccess and the time span may vary. - The MOF is under strict instructions not to release preaccess data and has adhered to these instructions. - Internal government preaccess is described on SI’s website and in the metadata on the DSBB of the IMF. - SI, the FMA, and the MOF share working materials with each other, but these data are not shared with policy-level staff. - There is no internal government access to monthly central government operations data (compiled by the FMA) and central government debt data (compiled by the CBI and the National Debt Management Agency) before MOF releases them to the public. - All SI products are clearly identified with the agency’s name and logo on publications and the website; publications advise users to identify SI as the source when quoting. - SI may provide advance notice of methodological changes where appropriate; the last major revision of the general government account was undertaken in 1998 when an accrual accounting system, consistent with sectorization and classification of international standards, was adopted by the NEI. - The NEI provided advance notice of the framework and methodology changes to major users in the CBI and the MOF. ### 1.3 Ethical standards — Staff guidance and confidentiality - Neither SI, nor the MOF, nor the FMA have comprehensive internal ethical guidelines; staff are guided mainly by the Government Employees Act. - The Rules of Procedure for Treating Confidential Data (in place since 2000 and formally adopted by SI in October 2004) provide additional guidance on treatment of information collected for statistical purposes. - Staff are bound by the Data Protection Act No. 77 of 2000. - Staff take an oath of secrecy upon hiring and are made aware of confidentiality regulations. - Staff must seek DG approval before undertaking work outside the agency to avoid conflicts of interest; the DG reports no observed conflict in his 20-year tenure. - No formal reminder system exists, but rules and regulations are readily available on SI’s website. ### 2. Methodological soundness — Concepts and definitions - Iceland compiles annual general government, central government, and local government statistics on an accrual basis in the context of national accounts based on the 1995 ESA and the ESA 95 Manual on Government Deficit and Debt. - The overall structure of Icelandic GFS follows international standards and guidelines as recommended in the 1995 ESA and ESA 95 Manual; definitions and concepts are broadly similar to the IMF’s GFSM 2001 with known divergences. - The analytical framework closely follows requirements of European regulations; revenue and expenditure data by economic type and by function can be related to GFSM 2001. ### 2.2 Scope - Annual GFS covering the central government, the SSF, and local governments are compiled and disseminated by SI. - SI disseminates the annual balance sheet for local governments and only the annual financial balance sheet of the central government in its yearbook Statistical Yearbook of Iceland. - A register of central government nonfinancial assets (excluding infrastructure) is kept by the FMA. - In June 2004 SI began disseminating main aggregates of general government revenue, expenditure, and financial balance on a quarterly basis, providing data closer to accruals during the year. - Government expenditure by function is based on the FMA accounting system, identified according to COFOG; SI plans to implement the new COFOG classification for central and local governments in 2005. - The MOF disseminates monthly data compiled by the FMA on central government accounts in a presentation adopted to monitor budget execution (not according to international standards). - The MOF, in cooperation with the CBI and the National Debt Management Agency, disseminates monthly central government debt data. - All general government activities are included in general government statistics; basic sources are central government accounts, the SSF, and accounts for local governments. - Recommendation: Compile and disseminate annual balance sheets for the central government and for the consolidated general government. - Recommendation: Disseminate more detailed quarterly GFS. ### 2.3 Classification/sectorization - General government statistics are compiled in the context of national accounts (1993 SNA and 1995 ESA); the institutional sector of the general government is fully consistent with the SNA. - GFS statistics are provided separately for consolidated general government and for central and local governments. - Data are disseminated for revenue and expenditure by economic type and function; main financial balance indicators (e.g., savings, net lending and borrowing) are disseminated. - Except for central government and the SSF, data on financial transactions are only disseminated until 2001. - Financing data distinguish between domestic and foreign financing, and between bank and nonbank domestic financing, but cannot distinguish between types of instruments. - Central government debt data disseminated by the MOF distinguish between foreign and domestic debt and further distinguish between short- and long-term debt. ### 2.4 Basis for recording - Most flows and stocks (excluding infrastructure) are valued at market prices. - Outstanding government debt is recorded at face value in accordance with EU recommendations. - Domestic central government debt is recorded at face value with accrued interest and indexation; foreign central government debt is revalued for exchange rate changes. - Foreign currency assets/liabilities of central and local governments are converted at mid-point market exchange rates at the end of each period. - The central government balance sheet includes only financial assets and liabilities; financial assets (notably shares in the local Phone Company) are discussed annually in the MOF and revaluation decisions are made. - Recommendation: Use market prices to value all stocks. - Statistics on the general government sector published by SI are based on accrual accounting; preliminary data published in March are based on modified accrual data adjusted by SI to full accrual (e.g., including consumption of fixed capital). - The FMA is in the process of including all agencies into its new Oracle software system; some agencies remain outside the centralized system and some are still making use of cash accounting. - Statistics for general government and subsectors are compiled on a gross basis for revenue, expenditure, and financing (in line with 1995 ESA); financing is compiled on a gross basis but recorded on a net basis (e.g., loans minus repayments, purchase of shares minus sale). - Attention should be given to tax revenue estimation to include only the amount realistically expected to be collected. ### 3 Accuracy and reliability — Source data collection and timeliness - SI prepares a preliminary annual general government account in March each year based on accounting data received from the FMA, the SSF, and a sample survey on local governments; SI adjusts and reclassifies these data to be consistent with the 1995 ESA. - In August each year SI receives final audited central government data from the FMA, the SSF, and consolidated local government data from the ALA to compile a final annual general government account. - These sources provide all necessary stocks except for nonfinancial assets of the central government. - Since 2001 SI has problems distinguishing between domestic and foreign financing and between bank and nonbank financing due to local government issues; SI is part of a committee addressing the problem and expects to resume publication of this data for the general government for 2005. - Intergovernmental transactions and positions are available in enough detail to compile a consolidated general government account; transfers from central government to the SSF are adjusted based on amounts received by the SSF. - All adjustments made by SI to FMA data are stored in the database and were made available to the mission. - Recommendation: Clarify the classification of financial liabilities of the local governments. - Final source data are mostly based on accrual accounting; for many agencies the gap between cash and accrual is very small, particularly on the expenditure side. - Preliminary central government data provided to SI are on a modified cash basis and require adjustment to accrual by SI. - Annual central government operations data are provided to SI by the FMA in August; preliminary March data are based on monthly cash data (January-December). - Preliminary local government data are compiled by SI in March; full coverage local government data are provided by the ALA in August. - Preliminary source data availability is timely enough to meet SDDS timeliness for general government operations; preliminary data are replaced in August when final data arrive. - Monthly data provided by the FMA to the MOF for NSDP publication are not timely enough for SDDS requirements due to software update delays in central government operations and debt compilation. - Recommendation: Expedite resolution of software problems at the FMA to provide compiling agencies with timely monthly source data. ### 3.2 Assessment and validation of source data - Final source data are based on audited accounts of all general government institutions. - Payments between government levels are checked against amounts received by the recipient level. - Preliminary central government data are assessed against final data; large changes are noted and investigated. - Preliminary local government survey data are assessed against final data; large changes are investigated and surveys adjusted if a local authority’s size or importance changes. - Changes in financing data are regularly reconciled with changes in financial assets and liabilities. ### 3.3 Statistical techniques and procedures - Central government, SSF, and local government data are collected from administrative records and generally do not require estimation. - The perpetual inventory method is used to estimate written-down replacement costs of fixed assets (including infrastructure) to calculate consumption of fixed capital; stock values are based on acquisitions/disposals accumulated and revalued over long periods with assumptions on remaining service life and accumulated consumption. - SI estimates underfunding of the Government Employees B-Pension Fund and records the estimate as compensation of employees (debit) and liabilities as insurance technical reserves (credit); the Government Employees A-Pension Fund is fully-funded. - SI adjusts preliminary modified cash central government data to accrual based on differences between previous years’ modified cash and final accrual data as approximations. - Preliminary annual local government data are obtained via a sample survey covering more than 80 percent of local governments’ revenue and expenditure; results are adjusted for full coverage. - For quarterly compilation SI uses budgets of central and local governments and a sample of a few local authorities covering approximately 50 percent of total local government activity to estimate quarterly revenue and expenditure. ### 3.4 Assessment and validation of intermediate results and outputs - Final GFS disseminated by SI use audited accounts of all government levels and full coverage of the general government sector. - Before dissemination, all tables are checked for internal consistency. - Comparisons are made between net lending/borrowing (from nonfinancial accounts) and changes in net financial assets/liabilities (from financial accounts). *Source: _cr05414 - 1.2 Transparency* ### 3.5 Revision studies ### 3.5 Revision studies ### 3.5 Key findings on revision practice - Studies and analyses of revisions are carried out routinely and used internally to inform statistical processes (see also 4.3.3). - The revision practice of general government account statistics follows the same practice as for all the national accounts. - Reasons for revisions are accounted for and analyzed. - Revisions do not generally entail long-term series, and changes are minimized owing to the extensive use of accounting data as the data source to compile results, even at the preliminary stage. - Owing to the nature of the statistics and the full coverage of the general government sector, no specific studies or analyses of routine revisions are made public. However, major revisions are made public with analyses and descriptions (example: the 1998 revision of the accounting system implemented in August 2000, where main aggregates were calculated back to 1990). ### 4. Serviceability — periodicity and timeliness - Iceland meets the periodicity requirements of the SDDS as follows: - Central government operations data, on a modified cash basis, are published monthly. - Central government debt data are published monthly. These data distinguish between foreign and domestic debt and between short- and long-term maturity. - General government operations data are published annually. - Since June 2004, SI started to publish some of the main aggregates of general government operations on a quarterly basis. - Timeliness: - General government operations data: the annual preliminary data for each financial year are published in March of the following year, which is within the timeliness requirement of two quarters after the end of the financial year. Final data for the general government are only available in August. - Central government operations: currently Iceland does not meet the timeliness requirement of the SDDS of one month after the reference period; delays are attributed to updating of computer software used for compiling central government operations and central government debt data. - Central government debt data: Iceland disseminates monthly data within one month after the reference date; due to software updates, Iceland is not meeting its own monthly timeliness standard, although the data are disseminated within the timeliness requirement of the SDDS (quarterly within one quarter after the reference date). - Recommendation: - Ensure the dissemination of data on the central government operations is in line with the requirement of the SDDS. ### 4.2 Consistency and reconciliation - Internal consistency: - General government finance data are internally consistent for the general government account and accounts for other levels of government; aggregates are consistent with components and balances. - In source data, transfers received do not always equal transfers paid between subsectors; SI monitors these differences and makes adjustments recorded in an annual reconciliation table. - Consistency over time: - Major methodological improvements or changes in accounting standards are explained and time series revised. Example: when the accounting system was revised and implemented in 1998, time series for general, central, and local government were revised back to 1980, and some time series back to 1970. - Consistency with other frameworks: - As SI compiles the general government account as part of the national accounts, it is consistent with NA aggregates (savings, net lending/borrowing, government consumption, gross fixed capital formation, consumption of fixed capital). - The general government financial balance sheets/financing data and government financial assets and liabilities held by other sectors are not consistent with annual monetary and banking statistics because the definition of general government in GFS differs from the definition for general government in monetary statistics. - All foreign grants and other transactions are assumed consistent with the balance of payments data, as the same source data are used. - Recommendation: - Reconcile GFS with the monetary statistics and regularly check the consistency between GFS and balance of payments. ### 4.3 Revision policy and practice - Publication schedule: - Publication of general government data follows the timetable used for national accounts: initial data are preliminary and replaced by final data. Ordinary revision schedule: preliminary data in March subsequently replaced by final data in September. - Identification of preliminary and revised data: - Preliminary data are clearly indicated in publications or on cover pages. Revised data are not annotated in the publications. - Recommendation: - Clearly indicate, in all publications, data that were revised. - Public studies of revisions: - No specific routine revision studies are made public due to nature of statistics; major revisions are publicized with analyses (example: 1998 accounting system revision implemented in August 2000 with aggregates calculated back to 1990). ### 5. Accessibility — dissemination, metadata, and user assistance - Presentation and detail: - GFS are presented to broadly allow major aggregates/balancing items to be identified and related to detailed underlying data. Annual publication provides equivalent coverage and details set out in the GFSM 2001 tables with a few exceptions. - For annual figures, many GFS time series are available from 1980 and some from 1970. - Central government reporting practices: - Monthly data disseminated by the MOF for central government operations are on a modified cash basis and are useful for cashflow analysis. - FMA compiles for SI every quarter data on central government finances based on a modified accrual basis; FMA compiles the Government Account for the year as a whole on a modified accrual basis. The fiscal budget is also based on a modified accrual basis. - FMA adjusts modified cash data quarterly to approach modified accrual data to meet SI demand for quarterly accrual data; SI adjusts further to meet full accrual requirements of national accounts. - Dissemination media and formats: - All data are released by compiling agencies on their websites in Icelandic and in English; hard-copy format available for a fee. - Advance release calendars (ARC) and preannouncement: - SI releases statistics according to an ARC covering the next 12 months and updated routinely; an ARC is also available on the DSBB. - Because of timeliness problems from FMA software updates, the MOF stopped releasing an ARC on its website; the only ARC available for MOF data is on the DSBB. MOF is experiencing problems keeping actual dissemination dates in accordance with preannounced dates on the DSBB. - Recommendation: - The MOF should resume the publication of an ARC on its website. - Equal access and prerelease: - Statistics published on SI’s website are made available to all users at the same time. SI releases data to the MOF in advance; the prerelease to MOF is publicly known. - Non-routine data and fees: - Statistics not routinely disseminated are made available upon request, but this is not made public; SI charges a fee for this information. - Metadata accessibility: - SI provides a link to metadata and summary methodology on the DSBB for general government statistics. - The MOF does not provide metadata or summary methodology on its website. Metadata for central government operations and debt are available on the DSBB but do not provide information on the methodology used in compiling the statistics. - Recommendation: - The MOF should provide metadata and summary methodology, explaining the compilation of statistics on central government operations and debt on its website. - Information on the methodology used in compiling the central government operations and debt should also be provided to the IMF to comply with the requirements of the SDDS. - User assistance: - Contact persons are indicated on the SI’s website. - A list of publications, prices, and an order form are available on the SI’s website. ### Table IV. DQAF (July 2003): notable assessments and operational issues - Resources: - SI compiles GFS with only two staff members; vulnerability to staff turnover or absence noted. - Scope and valuation issues: - Currently, the balance sheet of the central government excludes all nonfinancial assets. - Not all stocks are valued at market prices. - Source data gaps and operational delays: - Source data on the financial liabilities of local governments are not available for 2002, 2003, and 2004; therefore, no information is disseminated on the financing of the general government. - Due to implementation of new software at the FMA, monthly source data on central government are slightly delayed. - Consistency and dissemination shortcomings: - Monthly dissemination of central government operations data does not comply with the SDDS requirement (timeliness of one month after reference period). - Due to differing definitions of general government in GFS and monetary sector, data are not consistent. - Revised data are not clearly annotated in all publications. - MOF has stopped publication of an ARC on its website. - MOF does not disseminate metadata or methodological notes on the compilation of data on central government operations and debt to the public. *Source: _cr05414 - 3.5 Revision studies (Government Finance Statistics section of the IMF DQAF report).* ### 0.2 Resources ### _cr05414 - 0.2 Resources ### 0.2 Resources — staff, facilities, computing resources, and financing - The Statistics Department (SD) has nine staff members, of which one staff is assigned to the compilation of monetary statistics. Another staff member of the SD has been designated as the back up to compile monetary statistics in case the compiler is away. - The monetary compilation is highly automated and is done as a routine operation. The compiler consults with the senior management of the SD on matters that need special attention. - Human resources concern: one staff member is sufficient for routine compilation, but additional staff resources may be needed to: - undertake methodological reviews, - prepare metadata, and - further advance methodological work, given rapid change in the financial landscape. - Recruitment and training: - Compiling staff member recruited on a competitive basis. - Only candidates with a bachelor’s degree (business or economics) are recruited; no prior experience is necessary (though encouraged). - New recruits receive on-the-job training; no formal courses or seminars are offered within the CBI. Some staff attend international courses (BIS, IMF) or local college/university courses on their own initiative. - Compensation and turnover: - Salary levels comparable with other government agencies, but below private sector; there has been staff turnover in the compilation of monetary statistics. - During the past six years, three different staff members have been assigned to the compilation of monetary statistics because they either got a job outside the CBI or were working on other projects within the SD. - Computing and other office resources: - Each SD staff member has a computer. Monetary data are stored in the CBI’s mainframe computer. - Software “LAKI” is used to extract data from the mainframe. A project is underway to transfer the data into a FAME database; some aggregated data have already been transferred. - The Information Technology Department backs up the database every night. - The SD has sufficient funding to procure necessary equipment and resources to compile monetary statistics. - Recommendation: - Consider providing additional staff resources to undertake methodological reviews, prepare metadata, and further advance the methodological work, given that the country is facing a rapid change in the financial landscape. ### 0.2.2 Measures to ensure efficient use of resources - Annual performance review process informs staff of standing versus expectations; not linked to salary increases. - Salary increases are negotiated by the staff union with management. - Director of the SD informs staff of deficiencies and encourages improvement. ### 0.3 Relevance — monitoring user needs - Internal user needs (Economics Department, Financial Stability Department, management) are regularly reviewed. - The Director of the SD attends the Committee on Monetary, Financial, and Balance of Payments Statistics (CMFB) twice a year. - Feedback channels: personal contacts and a common e-mail address on the CBI website for data queries; no formal external user meetings or user advisory groups. - Recommendation: - Establish a formal users’ group and/or user advisory groups, including representatives from the private and academic sectors, to (1) solicit views of a broad cross section of users, and (2) assess relevance and practical utility of existing monetary statistics and monitor evolving needs. ### 0.4 Other quality management — processes for quality - Quality focus: - Priority given to meeting requirements of macroeconomic analysis and policymaking within the CBI. - Awareness of need for quality has increased due to rapid expansion of the banking system and efforts to improve sectorization of loans and deposits with deposit money banks (DMBs). - CBI is considering further expansion of statistical activities because of rapid economic transformation and emerging data needs for monetary policy. - Monitoring quality: - Ongoing process: weekly meetings of department directors with management provide briefing opportunities. - Director of the SD presents a work program to the Governor at the beginning of each year in one of these weekly meetings. - Planning and quality considerations: - CBI monitors financial markets for new developments and instruments. - SD considers feedback from internal and external users to improve collection and compilation systems. ### 1 Assurances of integrity — professionalism and transparency - 1.1 Professionalism - Since March 27, 2001, Iceland has adopted inflation targeting as its monetary policy framework. The Prime Minister sets the inflation target, and the CBI has full independence in employing monetary policy instruments. The CBI Act ensures instrument and financial independence. - Within this framework, monetary statistics are compiled on an impartial basis. - Recruitment process: - Vacancy advertised in Morgunblaðið and on the Confederation of Icelandic Bank and Finance Employees website. - Shortlist prepared by staff manager at Operations Department; SD interviews and selects candidate. - Appointments include a probationary period of three-to-six months. - Staff professional development: some staff lecture; others attend local college/university classes; encouraged to publish in the CBI’s Fjármálatíðindi and Monetary Bulletin and sometimes in local weekly business paper Vísbending. - Data sources and techniques: - Choices of source data and techniques are based solely on statistical considerations. - SD collects source data from all four commercial banks and 24 savings banks. It also obtains data on savings deposits with the cooperatives from the FME. - Except for carrying forward quarterly data on savings deposits with the cooperatives to compile monthly statistics, the SD does not make any estimation. - Monthly analytical accounts of the CBI and the DMBs, and the monetary survey, are produced within 21-23 days after the end of the reference month. - Media and misuse: - Informal mechanism monitors press; if significant misinterpretation occurs, the CBI contacts media to request explanation and correction (instances not common). - 1.2 Transparency - The CBI Act and CBI Rule 389/2002 discuss confidentiality and penalty for noncompliance of reporting; these documents are available on the CBI’s website. The CBI’s website provides publication lists and background information. - Internal access prior to release: - No-one outside the CBI or within the CBI (departments other than the SD) has access to monetary statistics prior to their release. - Identification of products: - Statistical publications (Annual Report and Monetary Bulletin) clearly identify the CBI as publisher. Website tables explicitly state source as “Central Bank of Iceland, Statistics Department.” The CBI requests attribution when its statistics are used or reproduced. - Advance notice of methodological changes: - Advance notice is not given to the public. Changes are explained when introduced via articles in the Annual Report and Monetary Bulletin and on the CBI’s website (“Statistics”), in Icelandic or English. Changes to data are indicated by footnotes in publications and on the website. - Recommendation: - Provide advance notice of major changes in methodology, source data, and statistical techniques affecting compilation of monetary statistics on the CBI’s website and/or in the CBI’s publications. - 1.3 Ethical standards - Guidelines for staff behavior (conflicts of interest, discipline, ethical issues) are in the CBI’s Rules Handbook (last update January 2005) and available on the CBI intranet. - CBI’s Rule No. 831 covers treatment of confidential information and securities/currency trading by employees. - New recruits briefed on staff regulations and required to sign an “Employee’s Pledge.” All staff required to read the Rules Handbook. ### 2 Methodological soundness — concepts, scope, classification - 2.1 Concepts and definitions - Concepts and definitions broadly conform to the Monetary and Financial Statistics Manual (MFSM). - Monthly monetary survey (Accounts of the Banking System) is equivalent to the MFSM’s Depository Corporations Survey (DCS). - Four monetary aggregates: M1, M2, M3, and M4. Authorities term M3 as broad money. - M1 = currency in circulation (outside commercial banks and savings banks) plus current accounts in kronur (transferable deposits). - M2 = M1 plus savings accounts and sight deposits in kronur and foreign currency accounts. - M3 = M2 plus indexed deposits (fixed-term deposits indexed to the CPI), other time deposits, currency-linked deposits (denominated in kronur but linked to euro or SDR), and supplemental pension deposits (restricted until age 60). Deposits of all resident sectors (including central government) and foreign sectors are included in monetary aggregates. - M4 = M3 plus three types of bonds (currency-linked, indexed, and unindexed). Currency-linked bonds are mostly European Medium-Term Notes (EMTN) issued by resident banks in Europe and purchased by nonresidents; traded in secondary markets. Authorities do not have information on residency of final holders of these bonds; some indexed bonds also held by nonresidents. - Counterparts of monetary aggregates: net foreign assets and domestic credit (which contains claims on various resident sectors). Central government deposits with DMBs are included as part of monetary aggregates. - CBI also presents: - Accounts of the Central Bank: foreign assets in net terms, net claims on central government, claims on resident sectors, and monetary base (“Base Money”). - Accounts of DMBs: balance sheet data by instruments on both asset and liability sides. - Recommendations: - Exclude the deposits of nonresidents and of central government from the definition of monetary aggregates. - Ascertain the residency of holders of currency-linked and indexed bonds issued by resident banks and classify these bonds into domestic/foreign liabilities, as appropriate. - 2.2 Scope - MFSM guidance: ODCs should include all financial corporations that issue liabilities included in national broad money. - Financial corporations in Iceland: - CBI, four resident commercial banks, and 24 savings banks. Commercial banks and savings banks are DMBs and fall under ODCs. - These are the only financial institutions that accept deposits in the country. - The authorities also include savings accounts of customers held with four cooperatives; SD obtains these data from the FME and includes them as part of M2 (as of end-2004, these deposits amounted to about ISK 1 billion, compared to total deposits with DMBs of about ISK 536 billion). - Other credit institutions and OFCs: - Several other credit institutions (140) operate and fall under MFSM category of other financial corporations (OFCs). - OFCs include: credit undertakings (9), deposit departments of cooperative societies (4), securities companies (6), securities brokers (3), management companies of Undertakings for Collective Investment in Transferable Securities (UCITS) (10), investment funds (15), Icelandic Stock Exchange (ICEX) (1), Central Securities Depositories (1), pension funds (49), insurance companies (15), insurance brokers (17), and Housing Finance Fund and other parties (5). - Three of the four commercial banks have branches abroad; those branches are considered nonresidents and are not included in coverage. - 2.3 Classification/sectorization - Residency criterion used aligns with 1993 SNA and BPM5. - MFSM-recommended sectoral classification listed; Iceland’s resident sectors classified as: (1) CBI; (2) commercial banks; (3) savings banks; (4) nonbank financial institutions; (5) treasury and government institutions; (6) municipalities; (7) enterprises; (8) households; (9) foreign sector; and (10) other. - Sectorization mostly in line with MFSM: ODCs = commercial banks and savings banks; OFCs = nonbank financial institutions; municipalities = local government; enterprises = other nonfinancial corporations. Treasury and government institutions category contains both central government and nonfinancial public corporations. - Classification of financial instruments broadly consistent with MFSM. - Repos: - Commercial banks and three investment banks conduct repos among themselves and with the CBI. Two savings banks conduct repos directly with the CBI. - Repos are classified correctly as collateralized loans, using collateral such as CBI certificates of deposit, electronically registered treasury bills, treasury notes and bonds rated by international agencies. - Deviations from MFSM recommendations: - In the Accounts of the CBI, fixed assets are expensed in the year of purchase or construction and are not shown on the balance sheet. - In the Accounts of DMBs, financial derivatives are classified as off-balance-sheet items, and claims on and deposits of nonfinancial public corporations are indistinguishably included as part of treasury and government institutions. - Recommendations: - In the Accounts of the CBI, classify fixed assets on the balance sheet. - In the Accounts of DMBs, classify (1) claims on and deposits of nonfinancial public corporations separately out of treasury and government institutions, and (2) financial derivatives on the balance sheet. *Source: _cr05414 - 0.2 Resources* ### 2.4 Basis for recording ### 2.4 Basis for recording ### 2.4.1 Market prices and valuation practices - General principle: Valuation of financial assets and liabilities should be on the basis of market prices or market price equivalents (fair values), per the MFSM. Loans are an exception and should be valued at creditors’ outstanding claims without adjustment for expected loan losses (book value = outstanding principal plus any accrued interest). - Monetary gold and nonmonetary gold: Valued on the basis of the market price of gold. Holding gains and losses from changes in market values (fair values) should be recorded separately in a revaluation account. - Iceland practice and institutional presentation: - The CBI applies a mix of analytical and accounting presentation for IMF accounts: accounting presentation records IMF quota as foreign assets and IMF No. 1 and 2 accounts as foreign liabilities; analytical presentation nets IMF No. 1 and 2 accounts from the IMF quota and records the net as reserve tranche position with the IMF (foreign assets). - The CBI records reserve tranche position with the IMF as foreign assets in the CBI Accounts, but also records the IMF No. 2 account on the liability side as part of other items net. - Valuation methods currently followed (CBI vs DMBs) — main items: - Monetary gold: Market price; London closing price at the end of the last working day of the month (CBI). Not applicable (DMBs). - SDRs: Rate fixed by the CBI (fixed daily by the CBI using the same weights as the IMF does at the same time when the official exchange rate is set) as of the last working day of the month (CBI). Not applicable (DMBs). - Foreign exchange (currency/deposits): Official exchange rate prevailing on the last working day of the month (both CBI and DMBs). - Deposits: Nominal value (both CBI and DMBs). - Loans: Book value (both CBI and DMBs); DMBs, except for a couple, present loans net of provisions on the asset side. - Securities other than shares: Market value (CBI); Market/fair value (DMBs). - Shares and other equity (asset side): Nominal value (CBI); Market/fair/historical value (DMBs). - Shares and other equity (liability side): Nominal value (both). - Foreign-currency conversion: All stocks and flows denominated in foreign currency should be converted to national currency at the market exchange rate prevailing at the time they are entered in the accounts; the midpoint between buying and selling rates should be used so any service charge is excluded. Both the CBI and the DMBs follow this principle. The CBI sets the official exchange rate at 10:45 a.m. each working day; rates are computed as the averages of rates prevailing in three commercial banks active in foreign exchange markets; the midpoint between the buying and selling rates of exchange is taken. - Specifics and shortcomings: - Loan portfolio on balance sheets of the CBI and DMBs is valued at book value (outstanding principal plus accrued interest). All DMBs, except for a couple, present loans net of provisions on the asset side. Valuation adjustments are not separately shown; valuation adjustments are realized in the profit/loss account. DMBs value securities held for investment on a historical value basis. - The MFSM recommends compiling stocks and each of the three flow components (transactions, revaluations, other changes in volume). The CBI and the DMBs do not compile data on flows. - Recommendations (valuation and presentation): - Show loans gross of provisions on the asset side and present data on provisions as part of other liabilities. - Present in the Accounts of DMBs the value of securities held for investment purposes by the DMBs in terms of market/fair value. ### 2.4.2 Recording on an accrual basis - MFSM recommendation: Compile monetary statistics on an accrual basis; revenues and expenses recognized in the period in which they arise regardless of corresponding cash flow timing. Interest due but not paid should be incorporated into the outstanding amount of the financial asset or liability (i.e., accrued interest included in stock). - Iceland practice: Monetary statistics in Iceland are compiled on an accrual basis, in line with MFSM recommendations. ### 2.4.3 Grossing and netting procedures - MFSM-aligned practice: Assets and liabilities of the CBI and DMBs are collected and compiled on a gross basis; claims on particular transactors are not netted against liabilities to those transactors. - Presentation practices and issues: - Many categories are analytically presented on a net basis in surveys and presentations (for example, net foreign assets and net claims on central government); MFSM recommends presenting net claims in surveys while including gross figures. - The CBI presents only net foreign assets in the Accounts of the Central Bank (with foreign liabilities being zero). Accounts of the Banking System show net foreign assets with underlying gross positions. In the Accounts of DMBs there is no presentation of net foreign assets, and it is difficult to measure the net foreign assets position from DMBs’ presented data. Data on net claims on central government are not explicitly available in the Accounts of DMBs and of the Banking System. - Recommendations (gross/net presentation): - Present net foreign assets with the underlying gross figures in the Accounts of the CBI and of DMBs. - Present data on net claims on central government with the underlying data on claims on and deposits of the central government in the Accounts of DMBs and of the Banking System. ### Key numeric and timing facts (preserved) - ISK 18.8 million (amount of shares and other equity on asset side as of end of 2003). - CBI exchange rate setting time: 10:45 a.m. each working day. - AD provides detailed CBI balance sheet with additional sectoral and instrument breakdown within 21-23 days after the end of the reference month. - IBDC monthly report generation: within four days after the end of the reference month. - DMBs required to submit monthly reports within 11 days after the end of the reference month. - AD provides data on the CBI to the SD within 10 days after the end of the reference month. - CBI typically compiles monetary statistics within about 10 calendar days; monetary statistics are usually compiled within 21 or 23 days after the end of the reference month. - Historical data availability for some aggregates: as early as 1960. ### Recommendations on source data, compilation, and reconciliation - Establish plans to include financial derivatives as on-balance-sheet items to be reported by banks as part of source data to compile monetary statistics. - Examine the reasons for inconsistency between the monetary statistics and balance of payments as well as government finance statistics, and reconcile the differences through regular bilateral meetings. - Disseminate historical data for the Accounts of DMBs and of the Banking System that are consistent with the current data. If breaks in data series occur, indicate these breaks with appropriate explanation. ### Source data collection, validation, and processing (accuracy and reliability) - Source data for CBI Accounts: Provided by the Accounting Department (AD), available monthly; AD disseminates the CBI balance sheet on the website under “News and Speeches” within four working days after the end of the reference month; a simplified balance sheet (Main Figures) is sent to the SD the following Monday for posting under “Statistics”; a detailed balance sheet with sectoral and instrument breakdown is disseminated within 21-23 days after the reference month. - Source data for DMBs: Two sources — direct submission of monthly reports to the SD by all DMBs, and balance sheets from the IBDC downloaded by the compiler. Monthly report contains detailed disaggregation of deposits, loans, and marketable securities by instrument/holder/borrower/issuer. - Classification and identifiers: - Since September 2003, classification accuracy enhanced by automating classification of loans and marketable securities by sector and instrument. - Enterprise Register (Fyrirtakjaskr) uses five-digit coding to distinguish company activity and ownership. National Register (Pjodskra) uses ten-digit identification numbers for residents and nonresidents. DMBs include these identification numbers in customer records. IBDC uses these numbers and SD coding scheme to generate monthly reports within four days after month end; IBDC forwards reports to DMBs which send them to SD. - Validation and checks: - SD performs vertical checks comparing detailed monthly reports from DMBs with balance sheet data from IBDC (compare aggregates and sum of components), visual checks, and follows up with banks for unusual movements. Misreporting requires resubmission and manual re-input and recompilation. - The compilation process is highly automated; electronic reporting, data processing, and validation contribute to accurate and timely statistics. - Treatment of specific items and procedures: - Financial derivatives: source data do not provide positions because DMBs treat derivatives as off-balance-sheet items. - Savings deposits with cooperative societies are included in M2; these data are small and available only quarterly, so CBI carries forward the most recent quarterly data for intervening months. - Seasonal adjustments are not carried out. - Recommendations (data collection/validation): - Establish plans to include financial derivatives as on-balance-sheet items to be reported by banks. ### Timeliness, periodicity, consistency, and revisions (serviceability) - Periodicity: SDDS requires monthly dissemination of analytical accounts of the central bank and the banking sector; Iceland meets this requirement. - Timeliness: Analytical accounts of the CBI are posted on the CBI’s website within four working days; banking sector accounts no later than 25 calendar days after the reference month; these meet SDDS requirements. - Internal consistency: Monetary statistics in the Accounts of the Central Bank and of the DMBs are internally consistent; claims and liabilities between the CBI and DMBs are very close with minor reconcilable differences. - Cross-dataset consistency issues: - Foreign assets in the Accounts of the CBI do not match exactly gross reserves in the international investment position data. - Data on foreign positions of DMBs used for balance of payments and monetary statistics differ due to different data collection frameworks (balance of payments uses monetary reports under the 2001 Foreign Exchange Act; monetary statistics use data provided by banks based on balance sheet items). - Material differences exist between net claims on central government in monetary statistics and financing by the banking system in GFS because monetary statistics indistinguishably include nonfinancial public corporations as part of treasury and government institutions. - Revisions practice: Deviations, omissions, misreporting, processing error, and other data problems are identified, investigated, corrected, and published as monetary data; no formal revision studies or documentation exist. - Recommendations (serviceability and reconciliation): - Examine and reconcile inconsistencies between monetary statistics and balance of payments as well as government finance statistics through regular bilateral meetings. - Disseminate historical data for the Accounts of DMBs and of the Banking System that are consistent with current data, indicating breaks when they occur. *Source: _cr05414 - 2.4 Basis for recording (PDF chapter/section).* ### 4.3 Revision policy and practice ### 4.3 Revision policy and practice ### 4.3.1 Revisions follow a regular and transparent schedule - In practice, revisions are rare and insignificant because monthly reports submitted by the DMBs are usually final. - Exception: data for December each year may be revised following the external audit of the annual balance sheets of each DMB. - The FME makes available to the public these audited annual balance sheets electronically on its website. - The compiler uses these audited balance sheets to compare against what was submitted earlier by each DMB. - If differences are noticed, the SD requires the DMBs to resubmit the revised monthly reports for December and for subsequent months. - The revised December data are incorporated and disseminated in the following cycle of data release. Recommendations: - Indicate in the CBI’s publications and on the CBI’s website that the December data of each year are subject to revision until the external audit of the annual balance sheets of the DMBs are conducted. - Clearly identify whether the data presented on the Accounts of the CBI, DMBs, and of the Banking System, as well as in the supporting tables, are preliminary, revised, or final. ### 4.3.2 Preliminary and/or revised data are clearly identified Findings: - The tables on monetary statistics presented on the CBI’s website and in publications indicate that the latest figures are preliminary. - When tables are revised and republished on the website, they do not indicate that the data are revised; rather, the new release date is shown in the bottom of the relevant table. - December data for each year are subject to revision until the external audit of the annual balance sheets of the DMBs is concluded, but no information is posted regarding the possibility of such revision in the publication or on the website. Recommendation: - Clearly identify whether the data presented on the Accounts of the CBI, DMBs, and of the Banking System, as well as in the supporting tables, are preliminary, revised, or final. (This repeats and reinforces the recommendation under 4.3.1.) ### 4.3.3 Studies and analyses of revisions are made public (see also 3.5.1) Findings: - No studies and analyses are carried out routinely on the revisions to monetary data. - Errors and data shortcomings in the data reported by the DMBs are the focus of internal analysis. - The public is not informed on the procedures that determine preliminary and revised data; users are not informed of the causes of the revisions. Recommendation: - Subject to the availability of staff resources, conduct studies and analyses on the level and direction of revisions, possibly on an annual basis, and share them with the users. *Source: _cr05414 - 4.3 Revision policy and practice* ### 0.1 Legal and institutional environment ### 0.1 Legal and institutional environment ### 0.1.1 The responsibility for collecting, processing, and disseminating the statistics is clearly specified - Quarterly and annual balance of payments data are compiled and disseminated under the responsibility of the Balance of Payments Division of the CBI. - Compilation and publication are based on: - the 2001 Act on Central Bank of Iceland (Act No. 36/2001 adopted by the Parliament on May 18, 2001) (CBI Act), and - the Exchange Act (No. 87/1992). - The 2001 CBI Act provisions: - Authority to collect information from: - institutions engaging in transactions with the CBI, - institutions and firms engaged in the payments systems, and - other firms or institutions subject to official supervision from the CBI on the basis of the Act on the Official Supervision of Financial Activities (Act No. 87/1998). - Authority to collect balance of payments input data from deposit institutions (commercial banks, savings banks, branches of foreign deposit institutions, and other institutions and companies authorized by law to accept deposits from the public for safe keeping and earning of interest), other credit institutions and securities companies. - Article 30: responsibility to produce on a regular basis balance of payments data and forecast (frequency and timeliness not specified in law; tradition of quarterly and annual dissemination). - International Transaction Reporting System (ITRS) is a main data source; framework set by the Exchange Act: - Article 11 obliges domestic entities involved in foreign exchange transaction via domestic banks to report this information to the CBI, via the domestic banks, for statistical purposes. - CBI issued Rules on the Obligation to Provide Information in respect of Foreign Exchange Transactions and Cross-border Capital Movements, No. 13, of January 16, 1995. - Rule Article 1 includes: “In order for the Central Bank of Iceland to be able to perform its mandatory regulatory functions and compilation of economic statistics, cf. Articles 10 and 11 of Act No. 87/1992, on Foreign Exchange, and Articles 44 of the regulation No. 470/1986, on the Central Bank of Iceland, it is obligatory to provide the Bank with all information regarding foreign exchange transactions and other aspects of the balance of payments and external position. In this respect the Central Bank has the same rights as SI and the same penalties apply to nonfulfillment of the obligation to provide information.” - Rule Article 4: “Individuals and legal persons shall give notification of the opening of accounts with nonresident banks. Legal persons shall submit a monthly statement of balances on such accounts, whereas individuals shall submit an annual statement of balances at the end of the year.” - CBI collects and compiles data on government external borrowing in its role managing government external debt; MOF disseminates annual current account statistics compiled by the CBI on its website. - Act on Statistics Iceland No. 24/1913 (amended by Acts No. 71/1919, No. 91/1991, and No. 83/1997) assigns SI responsibility for external trade data; trade data compiled from monthly reports from the Customs Administration (CA) on goods crossing the border after clearance. ### 0.1.2 Data sharing and coordination among data-producing agencies are adequate - No formal legal coordination requirement among CBI, SI, and CA, but informal arrangements ensure effective data sharing. - Customs Act No. 96/1987 Article 146: minister of commerce must coordinate with SI on information requested in Customs declaration and other CA records. - CBI and SI have a formal task force on development of service statistics and a formal agreement on exchange of raw data for balance of payments purposes. - SI and CA meet monthly to ensure flow of information for trade statistics; SI produces trade statistics on its own timetable and releases an update and revision calendar for monthly data flow to CBI. - Informal meetings and ongoing contacts between SI and the CBI ensure timely provision of trade statistics for goods item compilation. ### 0.1.3 Individual reporters’ data are to be kept confidential and used for statistical purposes only - Article 35 of the 2001 CBI Act: CBI employees bound by secrecy concerning affairs of customers, affairs of the bank, and other matters gained in course of work that should be kept secret; duty continues after employment ends. - Article 12 of the Foreign Exchange Act: persons implementing the Act bound to secrecy as regards conditions pertaining to individual clients and other confidential facts; duty continues after employment ends. - Additional confidentiality provisions in CBI internal staff regulation and ethical rules. - Access to individual data restricted to staff working in the balance of payments division. - Premises permanently guarded; data production and dissemination environment and databases secured against unauthorized access and manipulation. - Individual data regarded as confidential during entire data production cycle, including updates and revisions, until records stored in CBI archives after data considered final. - Data provided through direct reporting from companies disseminated as part of balance of payments statistics with consent of reporting entity; confidential information from individual respondents is never disseminated—only aggregate data per international standards. ### 0.1.4 Statistical reporting is ensured through legal mandate and/or measures to encourage response - 2001 CBI Act and Act on Foreign Exchange provide legal authority to sanction nonreporting, late reporting, or misreporting. - Article 37 of the 2001 CBI Act: CBI authorized to impose penalties in the form of per diem sanctions upon parties that neglect to provide information or provide deliberately misleading information; Board of Governors lays down rules on sanctions, agreed by the Supervisory Board. Improvement compared with previous Act which required consultation with MOF. - Article 13 of the Foreign Exchange Act: violations (including mandatory data reporting) punishable with fines or custody; penalties on management of legal persons, fines on legal person, withdrawal of legal right to operate; violations may be punishable under the Criminal Act. - CBI has legal mandate to impose fines in case of nonresponse from domestic entities involved in crossborder transactions settled in foreign accounts. - CBI emphasizes cooperative environment: visits to major enterprises, frequent phone contact, variety of electronic reporting options. - Recommendation: - Measures should be taken to ensure respondents fully understand the legal framework for surveys including clear provision for confidentiality. - Legal authority to collect data for statistical purposes should be recalled upfront in each reporting form, particularly for direct reporting companies. --- ### 0.2 Resources ### 0.2.1 Staff, facilities, computing resources, and financing are commensurate with statistical programs - Four staff members (including the manager) are allocated to the Balance of Payments Division of the SD of the CBI. - All staff have adequate education at the university level, with specializations in an economic field. - Division responsibilities include balance of payments, international investment position, external debt, and the reserve template on foreign currency liquidity. - As a subscriber of the SDDS and participant in European statistics committees, the division faces a heavy workload in frequency and timeliness. - Division is under considerable stress to cope with regular production; absence of any member (training, leave) significantly impacts output. - Workload includes considerable number of ITRS reports, direct reporting checks/validation, and ad hoc surveys. - ITRS difficulties to accurately record all crossborder transactions on a gross basis increase burden for checking and follow-up. - External Trade Department of SI consists of five people (including the manager) and also faces heavy workload due to limited resources. - Recommendation: Reassess current staff resources. Options include: - more effective sharing of work with other CBI departments (Economic and Monetary Departments) and SI, - increase in staff resources, - continued participation in international seminars and courses. - Addressing balance between options should be a near-term priority. - Task force set up in early 2004 to formulate recommendations on a new data collection system with focus on the services account; limited resources available for project. - All SD staff provided with up-to-date computers; Information Department maintains advanced mainframe system for electronic data sharing and database management. - Salaries believed to attract high-quality employees. ### 0.2.2 Measures to ensure efficient use of resources are implemented - Human Resources Division of the Operations Department, in liaison with SD managers, fosters culture of efficient resource use. - Staff involved in informal meetings on procedures and processes. - Efficient use monitored via regular meetings before and after data production cycle to address problems. - Process review has led to consideration of changing the ITRS data collection system and designing a new system. --- ### 0.3 Relevance ### 0.3.1 The relevance and practical utility of existing statistics in meeting users’ needs are monitored - No formal users’ Advisory Committee for balance of payments statistics. - CBI maintains constant contact with external users through ongoing requests to the Balance of Payments Department on data quality and methodology clarifications. - Identified new needs difficult to cover relying on ITRS: - more accurate data on the service account, - greater emphasis on geographical breakdown by main trading partner. - CBI and SI launched a dedicated task force to advise on improvements, including a proposal on a new data collection system and different sharing of work between CBI and SI. - CBI’s SD participates in European statistics committees and working groups exposing CBI to user needs discussions. - Recommendation: Establish a formal users’ group including private and academic sector representatives to assess evolving needs and define plans and priorities for new balance of payments statistics. --- ### 0.4 Other quality management ### 0.4.1 Processes are in place to focus on quality - Management is sensitive to data quality issues and provides the Board of the CBI with input on challenges in current data collection system, including information on the level and sign of errors and omissions (E&O) and the level and size of revisions. - Ambitious quality assessment and improvement programs constrained by available staff resources. - Quality measures include provision of up-to-date computer systems and design of quality checking and reporting systems in IT used to collect and validate data online. ### 0.4.2 Processes are in place to monitor the quality of the statistical program - Complete data production cycle monitored from provision of balance of payments codes by domestic banks in ITRS to validation of final aggregates. - Where parallel sources exist (ITRS and direct reporting), the two time series are compared and statistical analyses conducted to choose the source providing best coverage. - Consistency with other datasets monitored occasionally; in most cases data sources are the same. ### 0.4.3 Processes are in place to deal with quality considerations in planning the statistical program - Despite staff constraints, SD engaged in formal and informal discussions to improve processes and procedures. - Task force on revision of balance of payments data collection system (including CBI and SI members) expected to identify problems of ITRS reliance and suggest new data collection approach. - Internal debate led to implementation of an ad hoc survey of the IT industry’s exports. --- ### 1. Assurances of integrity ### 1.1 Professionalism #### 1.1.1 Statistics are produced on an impartial basis - 2001 CBI Act stresses CBI status as an independent institution owned by the state with governance subject to the Act. - Act grants authority to issue rules needed for assigned tasks; Act does not explicitly state independence in compiling statistics, but staff report CBI enjoys total independence from political pressure and compiles statistics on professional considerations. - Staff recruited and promoted based on aptitude and/or expertise in statistics; ongoing education promoted. #### 1.1.2 Choices of sources and statistical techniques as well as decisions about dissemination are informed solely by statistical considerations - Independence granted by the 2001 CBI Act is understood to extend to statistics compiled. - CBI inherited ITRS-centered collection system from exchange control era (suspended in 1995); since then designed alternative sources including direct reporting and dedicated surveys. - CBI and SI are considering moving to a new data collection system due to ITRS coverage challenges arising from openness of the economy. - CBI posts a comprehensive set of data on the CBI’s external website, including dissemination of historical data. #### 1.1.3 The appropriate statistical entity is entitled to comment on erroneous interpretation and misuse of statistics - CBI staff monitor press coverage and maintain close relationships with economic press to explain content and analytical value of statistics. - CBI has provided additional comments clarifying reasons behind substantial revisions of preliminary data in some instances. *Source: _cr05414 - 0.1 Legal and institutional environment* ### 1.2 Transparency ### 1.2 Transparency ### Legal and public availability of statistical terms and conditions (1.2.1) - The 2001 CBI Act and the 1992 Foreign Exchange Law, which include all references to the CBI’s responsibility to collect, compile, and disseminate balance of payments statistics, are available at the CBI’s external website, including a complete translation in English. - The law specifies the confidentiality regime and the penalties for nonresponse, late response, or misreporting. - The 2001/3 issue of the Monetary Bulletin included dedicated articles specifying the new CBI Act, which includes references to its authority to collect data for statistical purposes. ### Internal governmental access and pre-release procedures (1.2.2) - One day prior to the release, the CBI’s Board of Governors is debriefed about the balance of payments data updates and revisions to prepare for the regular meeting with the media on the release day. - There is no possibility to change the data during that debriefing. - There is no external government access to the balance of payments statistics compiled by the CBI prior to release; however, this absence of external access is not clearly stated in any of the CBI’s online or paper publications. - All data are released simultaneously to all public and private users on the CBI’s external website. ### Identification of statistical products (1.2.3) - All statistical publications compiled and disseminated by the CBI are clearly identified as products of the CBI. - The CBI’s external website and the regular paper publications inform users which data are compiled directly by the CBI itself and which are obtained from external sources. - The annual balance of payments statistics disseminated by the MOF both online on the external website and as paper publications quote the CBI as the institution in charge of compiling and disseminating data on the external sector. ### Advance notice of methodological changes (1.2.4) - Advance notice to explain major methodological changes is not provided as a rule online or in paper publications. - Occasionally, the CBI publishes dedicated articles explaining the reason behind the decision to develop a new data collection approach for certain items, including detailed explanations on the methodology, source data, and statistical techniques. - Example: The CBI published in the former version of the monthly bulletin (Hagtölur mánaðarins) and on the CBI’s website a dedicated analysis on the impact of collecting data on exports of IT services through sampling the most important enterprises, and the impact in terms of breaks in the disseminated series. - Recommendation: Advance notice should be given to the public on methodological changes. The advance notice should include an explanation of the new methodology and of the reasons that have led to adopting it, and an assessment of the likely impact on the data (including the estimation of consistent historic data, if available). ### Ethical standards for staff (1.3.1) - At the inception of the employment, staff members of the CBI are provided with guidelines and ethical principles governing conduct. - The guidelines cover independence from external influence and the obligation to treat all information gathered in the course of tasks under strict confidentiality. - The general public regards the CBI as an institution that operates according to the highest professional and ethical standards in the country. ### 2. Methodological soundness ### Concepts and definitions (2.1.1) - The balance of payments statement compiled and disseminated by the CBI is generally consistent with the guidelines outlined in the BPM5. - Current, capital, and financial accounts are defined according to BPM5 guidelines, and transactions in assets and liabilities are recorded separately. - Resident institutional units are defined in conformity with BPM5 as those that have a center of economic interest in Iceland. - As a member of the EEA and by virtue of agreements with Eurostat, Iceland additionally implements the European statistical standards. ### Scope (2.2.1) - The data collection system and legal framework provide for the coverage of all resident-nonresident transactions in principle, but reliance on the ITRS poses practical difficulties to ensure full coverage in all instances. - Specific issues noted: - Compensation of employees is net of withholding taxes. - Certain settlements reported by domestic entities via the banks include both the goods and services element in the payment, even if the ITRS guidelines specify reporting on a gross basis. - All resident institutional units engaged in transactions with nonresidents are covered, including transactions of domestic fishing fleets operating in domestic and international waters. - Proper regulations ensure that domestic agents involved in crossborder transactions and operating bank accounts abroad are in principle included, although verification may be difficult in all circumstances. - Foreign direct investments include all short- and long-term intercompany claims and liabilities on a directional basis. ### Classification and sectorization (2.3.1) - Classification and sectorization used are in line with BPM5, but not published in full detail on the CBI’s website. - Within the income item, dividends are not shown separately for income on direct investments and income on portfolio investments. - Contrary to BPM5 guidelines, loan transactions of the banking sector are not classified separately from the currency and deposit transactions of this sector. - Recommendation: Direct investment income on equity and portfolio investments should be shown separately in the income account. - Recommendation: Loans should be shown separately from currency and deposits. - The financial derivatives item is shown separately from portfolio investments, but it is shown on a net basis and, based on other data disseminated by the CBI on net purchase of foreign securities, it appears that the actual values are included under portfolio investments. ### Basis for recording (2.4) - Market prices are used to value flows and stocks in general. - Monetary gold and financial instruments’ stock and flows are valued at market prices, except when they involve nontradable financial instruments (valued at nominal value). - SI compiles merchandise trade exports and imports on a f.o.b. basis; SI receives data from the CA, which converts trade denominated in foreign currency into national currency using the selling rate for imports and the purchase rate for exports. - The CBI adjusts trade data by using the buying rate for both imports and exports, using the monthly average exchange rate or the shortest period applicable. - The stock of foreign direct investments abroad and in the reporting economy is valued at book value; the CBI staff regards market value as very difficult to apply for inward FDI and not desirable in case of market volatility. - Recording is done on an accrual basis in principle, but reliance on the ITRS and other data sources limits full implementation of accrual recording. - Trade in goods timing is based on clearance by the CA, a proxy for recording in the importer’s books. - More than 50 percent of trade in services data are collected through the ITRS, which recognizes transactions when settlement occurs rather than when services are delivered or received; anecdotal evidence points to frequent time lags and underestimation of trade credits. - Interest payments on short- and long-term debt are calculated on a due-for-payment basis, including between affiliated enterprises. - The CBI maintains a detailed database on external debt, enabling accrual calculations for long-term debt; the CBI is planning to include the recording of interest payments on an accrual basis towards the end of 2005. - Interest receipts from holdings in foreign securities are compiled on an accrual basis and are based on the stock data. - Data on domestic banks’ financial flows and related income are calculated on an accrual basis from monthly reports on the banks’ external assets and liabilities, broken down by instrument and currency. - The mission welcomes the CBI’s plans to compile income payments on external liabilities (debt securities, within portfolio investments, and other investments) on an accrual basis. - Grossing/netting procedures: - Current and capital account transactions are recorded on a gross basis. - Financial account transactions are recorded on a net basis, separately for individual assets and liabilities components. - Exception: Financial derivatives are presented as net between change in assets and liabilities within the financial account. - Processing for goods is recorded on a gross basis; goods for repairs are recorded on a net basis. *Source: _cr05414 - 1.2 Transparency* ### 3.1 Source data ### _cr05414 - 3.1 Source data ### 3.1.1 Source systems and data collection - Balance of payments data collection relies on multiple sources: ITRS, direct reporting from large companies, Statistics Iceland (SI), commercial banks, and central government. - ITRS is a main data source for trade in services (more than 50 percent of data collected). - Preliminary financial account estimates use ITRS and direct reports and are substituted with annual surveys for FDI, CPIS, and foreign long-term borrowing. - Merchandise trade: collected by SI based on monthly reports of the CA. - Transport services: quarterly reports from two major domestic shipping companies and one airline; reports include breakdown freight/passengers, other services, and stock of foreign assets and liabilities by instrument and original maturity. - Travel services: monthly data from two credit card companies operating in Iceland. - IT services exports: annual reports from recognized IT companies. - Military base operations: quarterly reports from the Ministry of Foreign Affairs to calculate exports of services and compensation to Icelandic employees. - Investment income: quarterly direct reporting from banks; annual surveys of FDI companies abroad and in the reporting economy; annual survey on main portfolio investors; annual survey on external borrowers (private and public); monthly reports on CBI reserve assets and other balance sheet items. - Diplomatic operations: quarterly data from the MOF for embassies and diplomatic bodies abroad. - FDI (abroad and in Iceland): collected annually via separate surveys; forms sent to companies based on a business register updated using ITRS records, Ministry of Commerce information on new foreign direct investors, and media. - Domestic securities crossborder transactions: monthly from domestic securities dealers. - Issuance of domestic securities abroad bought by nonresidents in primary market: collected via annual external debt survey. - CPIS used to assess accuracy of domestic securities secondary market coverage and ITRS-derived data. - Domestic entities transactions in foreign securities: monthly; stock of foreign securities: yearly in CPIS; respondent list from CBI’s Financial Stability Department. - External borrowing (original maturity > one year): annual loan-by-loan and debt security-by-debt security collection by the CBI. - Domestic banks: monthly reporting on external assets and liabilities by instrument and currency; used to calculate financial flows and accrual income. - Reserve assets and balance sheet items: monthly reporting by CBI Accounting Department. - ITRS simplification thresholds introduced: ISK 400,000 in 1995, raised to 700,000 in 1998. - The average amount of transactions below the simplification threshold during the period 1998–2004 has been 0.7 percent of the total balance of payments transactions. - Bank client identification procedures: identification number from immigration and census office required; foreign citizens staying in Iceland > one year require permanent address and Icelandic identification number; for nonpermanent residents banks request legal address as proxy for residence status. - Known ITRS-related problems: misclassification by banks; netting of transactions by enterprises with transactions in both directions; netting in company reports that deduct withholding tax from wages to nonresident workers (recorded net of tax). - Structural changes since abolition of foreign exchange controls: liberalization of international securities transactions, globalization of financial markets, increased FDI activity, expansion of services industry — posing challenges to ITRS coverage and accuracy. - Task Force on Services and the Future of the Balance of Payments Collection System (CBI and SI) established to assess impact and recommend approaches; expected to provide recommendations by the end of 2005. - CBI Balance of Payments Division monitors E&O regularly; absolute level of E&O in percentage of the GDP in Iceland is about 1.1 percent (compared to other industrial countries, not high). - Increased crossborder transactions impose processing costs on banks in ITRS systems, likely reducing accuracy via incorrect codification or use of residual codes. ### 3.1.2 Conformity with definitions, scope, classifications, valuation, and timing - Source data broadly consistent with BPM5 recommendations. - Limitations of ITRS: - Simplified breakdown into services; no distinction direct vs portfolio equity investments. - No distinction between debt security interest and debt security repayment. - Banks receive comprehensive instructions on ITRS compilation. - Trade statistics invoiced in foreign currencies use selling exchange rate for imports and buying exchange rate for exports; Balance of Payments Division adjusts by using the buying exchange rate for both (instead of midpoint) contrary to BPM5 recommendation. - Major shortcoming: domestic banks do not classify holdings in financial derivative instruments as on-balance sheet items — leads to total lack of data at balance of payments level for derivatives. - Domestic currency deposits held by nonbank nonresidents in domestic banks are not included in monthly reports under the 2001 Foreign Exchange Act obligations. - Contrary to BPM5 recommendations, data on foreign direct investments do identify permanent debt (i.e., subordinated capital loan) between affiliated banks separately from other claims and liabilities. Recommendations (explicit in source): - Establish plans to include financial derivatives as on-balance sheet items to be reported by banks for balance of payments purposes. - CBI should monitor ongoing evolution of the financial market and identify if the nonbank sector engages in transactions in financial derivatives. - CBI should classify deposits held by nonresident nonbanks in domestic currency with domestic banks as external liabilities. - Collect and include data on permanent debt between affiliated banks as part of foreign direct investments. ### 3.1.3 Timeliness of source data - Generally timely data collection, except annual surveys on foreign direct investments abroad and in Iceland. - In some instances, data related to major players have been late, resulting in sizeable revisions on both yearly and related quarterly data. - Processing required to meet publicized deadlines creates stress and has in some instances led to dissemination of wrong data. Recommendation (explicit in source): - Efforts should be made to improve the timeliness for reporting balance of payments data. ### 3.2 Assessment and validation of source data - Raw trade data from CA to SI undergo thorough validation and consistency checks (automatic and manual). - ITRS processing includes validation checks at all reporting stages, error messages for corrections, outlier identification (checked with respondents), and assessment of temporal consistency. - ITRS and parallel sources are contrasted for internal and external consistency; implausible codes are flagged for follow up. - FDI annual survey results checked against specialized press; new entities not in business register prompt immediate contact and register update. - Business registers (FDI and External Borrowing) believed to have very good coverage given country size and public information availability. ### 3.3 Statistical techniques and procedures - Compilation tools (Excel spreadsheets and relational databases) use IMF standard codes and descriptors. - ITRS evident misrecordings are revised by CBI staff before compiling aggregates. - For nonresponse or late response from important reporters, estimation techniques based on previously reported value are used. - CA collects trade input data both on f.o.b./f.o.b. and c.i.f./f.o.b. bases. - No adjustments done to calculate tax withheld on income payments from foreign bonds held by residents. - Shuttle trade not believed significant and is not estimated. - Occasional reconciliation of FDI via bilateral comparisons in Nordic balance of payments compilers’ meetings. - When new survey on exports and imports of IT services was introduced, detailed analysis of services account revision led to methodology to backcast the data. ### 3.4 Validation of intermediate data and statistical outputs - Financial transactions, stocks, and related income routinely assessed, possibly in original currency. - If difference between change in stocks and financial flows exceeds 10 percent of the last period stock for large numbers, problem is assessed thoroughly. - Significant aggregate discrepancies may be brought to CBI Board attention with explanations. - CBI Balance of Payments Division regularly monitors size, sign, and dynamics of E&O; results provided to the CBI Board. - Differences between ITRS and parallel sources (direct reporting and surveys) are monitored to assess coverage, valuation, or timing issues; detailed assessment reports maintained. ### 3.5 Revision studies - Revisions assessed regularly, with focus on annual FDI surveys as they impact quarterly financial and income accounts for the reference year. - Most revisions due to late responses or misreporting; revision analysis confined to assessing reporters’ understanding of reporting obligations and whether new respondents replaced previous ones. - Introduction of IT services survey: detailed revision analysis led to methodology to backcast data. ### 4 Serviceability: periodicity, timeliness, and consistency - Periodicity: - CBI disseminates balance of payments statistics quarterly, in line with SDDS requirements. - Timeliness: - Quarterly balance of payments data are disseminated within 10 weeks after the end of the reference quarter. - SDDS deadline is 12 weeks. - Internal consistency: - Quarterly and annual BOP statistics follow same concepts, definitions, and classifications; sums of quarterly data and annual statistics are consistent. - Absolute level of E&O as percentage of GDP about 1.1 percent. - No table is disseminated regularly reconciling change in stocks, transactions, exchange rate adjustments, price, and other changes. - Time series consistency: - Quarterly and annual BOP statistics disseminated consistently from the year 1990 onwards for main aggregates. - Consistent detailed BOP categories available upon request from the year 1990. - Methodological changes (e.g., direct reporting, IT exports survey) have been backcast so no methodological breaks in disseminated CBI time series. - Monetary Bulletin provides explanations when important trend changes occur. - Cross-dataset consistency: - CBI compares BOP data with other datasets to check consistency; trade data from SI reconciled with goods item after including goods procured in ports by carrier. - Government external debt data for BOP and GFS obtained from CBI external debt database; inconsistencies exist between CBI and MOF general government external debt data with no reconciliation table provided. - Revision revealed inconsistency between BOP and monetary statistics for external assets and liabilities (loans and deposits) of banks vis-à-vis nondomestic nonbanks: - BOP data appear sizably larger on the asset side and smaller on the liabilities side compared to monetary statistics. - Both datasets use same residence concept and same financial instrument classification but are obtained separately: BOP inputs from monthly reports of banks under 2001 Foreign Exchange Act; monetary statistics from banks’ balance sheet items. Recommendation (explicit in source): - Conduct an in-depth investigation to disclose reasons for inconsistency between the two datasets. - Some discussions suggested a different definition of deposits; possibly BOP statistics (contrary to BPM5) include some tradable certificates of deposit that should be classified under portfolio investments. *Source: _cr05414 - 3.1 Source data (excerpt).* ### 4.3 Revision policy and practice ### 4.3 Revision policy and practice ### Revisions follow a regular and transparent schedule (4.3.1) - Findings: - Revisions are introduced in the balance of payments statistics on an ongoing basis and can affect observations related to the last two or three years. - Revisions due to the late response or misreporting from some major players can affect the data substantially, both in terms of yearly and related quarterly data. - Manual errors have been detected in data released; the CBI has immediately issued a new press release with the correct figure, but the explanations as to the reason for the revision were unclear to users. - Public concern has arisen about the instability of the time series. - The revision policy has not been made known to the public. - Recommendation: - The revision policy should include new (current and historic) data as soon as they arrive and it should be clearly stated in the statistical publications. ### Preliminary and/or revised data are clearly identified (4.3.2) - Findings: - The disseminated balance of payments data are clearly identified as provisional for the reference year and quarter. - No mark suggests which data may have been revised within the balance payments statements. - Recommendation: - A plan should be established to adapt the data production environment so that that the revised data are clearly marked within the balance of payments statement in all statistical publications. ### Studies and analyses of revisions are made public (4.3.3) - Findings: - No studies on the size, sign, and developments over time of the revisions, including commentary on the reasons behind the observed changes, have been disseminated to the public. - Recommendation: - Subject to staff resource availability, studies and analyses on the level and direction of revisions should be conducted possibly on an annual basis and shared with the users. *Source: _cr05414 - 4.3 Revision policy and practice* ### 4. Serviceability ### 4. Serviceability ### Revision policy and practice - Data revisions follow a regular and publicized procedure. - 4.3.3 Studies and analyses of revisions are made public (see also 3.5.1). ### Data accessibility (5.1) - Statistics are presented in a clear and understandable manner; forms of dissemination are adequate; statistics are made available on an impartial basis. - 5.1.1 Statistics are presented in a way that facilitates proper interpretation and meaningful comparisons (layout and clarity of text, tables, and charts). - 5.1.2 Dissemination media and format are adequate. - 5.1.3 Statistics are released on a preannounced schedule. - 5.1.4 Statistics are made available to all users at the same time. - 5.1.5 Statistics not routinely disseminated are made available upon request. ### Metadata accessibility (5.2) - Up-to-date and pertinent metadata are made available. - 5.2.1 Documentation on concepts, scope, classifications, basis of recording, data sources, and statistical techniques is available, and differences from internationally accepted standards, guidelines, or good practices are annotated. - 5.2.2 Levels of detail are adapted to the needs of the intended audience. ### Assistance to users (5.3) - Data and metadata are easily available and assistance to users is adequate. - 5.3.1 Contact points for each subject field are publicized. - 5.3.2 Catalogs of publications, documents, and other services, including information on any charges, are widely available. - Prompt and knowledgeable support service is available. ### Results of User Survey — General information about uses of official macroeconomic statistics of Iceland (Number of Responses) - Which official statistics do you use regularly? - National accounts (NA): 21 - Prices: 17 - Government finance statistics (GFS): 14 - Monetary statistics (Monetary): 13 - Balance of payments (BOP): 10 - Other: - Production indices: 8 - Labor market: 10 - Merchandise trade: 12 - International reserves and foreign currency liquidity: 6 - External debt: 8 - International investment position: 9 - Other: 2 - Where do you obtain the official statistics? - Official press releases and publications on macroeconomic statistics: 21 - Private sector summaries and analyses: 7 - Official policy papers: 15 - Publications from international organizations about the country: 12 - Other sources: 0 - Do you refer to official descriptions of the sources and methods used? - Yes: 9 - No: 11 - For what purposes do you use the official statistics? - Analysis of current developments for short-term decision making: 11 - Analysis of trends for longer-term policy formulation: 15 - Econometric model building and forecasting: 9 - Economic research: 13 - Comparison with economic developments in other countries: 17 - General economic background: 17 - Other: 0 ### Coverage and detail (Question 5) - 5.1 In general, are you satisfied with the coverage of official statistics? - NA: Yes 17, No 5 - Prices: Yes 18, No 2 - GFS: Yes 13, No 3 - Monetary: Yes 18, No 1 - BOP: Yes 14, No 2 - Other: Yes 4, No 2 - 5.2 In general, are you satisfied with the official statistics in terms of their level of detail? - NA: Yes 13, No 9 - Prices: Yes 17, No 3 - GFS: Yes 12, No 4 - Monetary: Yes 19, No 0 - BOP: Yes 15, No 1 - Other: Yes 4, No 3 ### Periodicity and timeliness (Question 6) - 6.1 Are you satisfied with the frequency of compilation? - NA: Yes 18, No 3 - Prices: Yes 17, No 3 - GFS: Yes 13, No 3 - Monetary: Yes 19, No 0 - BOP: Yes 14, No 2 - Other: Yes 4, No 1 - 6.2 Are the official statistics disseminated with appropriate timeliness? - NA: Yes 16, No 5 - Prices: Yes 15, No 2 - GFS: Yes 9, No 6 - Monetary: Yes 16, No 1 - BOP: Yes 9, No 6 - Other: Yes 4, No 1 ### Other dissemination practices (Question 7) - 7.1 Do you know if there is a publicly disseminated calendar of release dates? - NA: Yes 15, No 5 - Prices: Yes 14, No 4 - GFS: Yes 9, No 8 - Monetary: Yes 14, No 2 - BOP: Yes 13, No 3 - Other: Yes 2, No 2 - 7.2 If there is a calendar, are statistics released on the dates announced? - NA: Yes 15, No 1 - Prices: Yes 16, No 1 - GFS: Yes 9, No 1 - Monetary: Yes 15, No 1 - BOP: Yes 12, No 2 - Other: Yes 3, No 1 - 7.3 Is there enough information about revisions to official statistics? - NA: Yes 14, No 4 - Prices: Yes 13, No 1 - GFS: Yes 11, No 4 - Monetary: Yes 12, No 3 - BOP: Yes 11, No 4 - Other: Yes 4, No 1 ### Accessibility (Question 8) - 8.1 Can you easily access the official statistics? - NA: Yes 22, No 0 - Prices: Yes 19, No 0 - GFS: Yes 16, No 1 - Monetary: Yes 19, No 1 - BOP: Yes 17, No 0 - Other: Yes 6, No 0 - 8.2 Can you easily access information pertaining to official statistics you use (explanatory notes, methodological descriptions)? - NA: Yes 15, No 1 - Prices: Yes 14, No 1 - GFS: Yes 11, No 3 - Monetary: Yes 11, No 2 - BOP: Yes 9, No 5 - Other: Yes 1, No 0 - 8.3 Is the above information on methodology sufficiently clear and at an adequate level of detail to be useful to you? - Yes 14, No 4 - 8.4 How do you get access to official statistics? - Official releases: 11 - Hard copy publications: 10 - Data specifically requested: 9 - Official website: 22 - Other: 2 - E-mail requests: 12 ### Overall assessment (Question 9) - 9.1 Is the underlying methodology of official statistics sound and appropriate? - NA: Yes 19, No 2 - Prices: Yes 17, No 1 - GFS: Yes 15, No 2 - Monetary: Yes 18, No 0 - BOP: Yes 16, No 1 - Other: Yes 4, No 2 - 9.2 Are the official statistics unbiased and accurate? - NA: Yes 18, No 1 - Prices: Yes 16, No 2 - GFS: Yes 15, No 1 - Monetary: Yes 16, No 1 - BOP: Yes 16, No 0 - Other: Yes 3, No 1 - 9.3 How do you compare the quality of official statistics with those of other countries in the region? - NA: Better 1, Same 14, Worse 3 - Prices: Better 4, Same 11, Worse 1 - GFS: Better 1, Same 10, Worse 4 - Monetary: Better 1, Same 15, Worse 0 - BOP: Better 0, Same 12, Worse 2 - Other: Better 0, Same 2, Worse 1 - 9.4 Overall quality of the official statistics (1 rated as poor and 5 as excellent) - NA: 3.9 - Prices: 4.3 - GFS: 3.6 - Monetary: 4.3 - BOP: 4.0 ### Users' comments — strengths and weaknesses - Prerequisites of Quality - Confusion between Ministry and National Audit Office. - Methodological Soundness - Lack of social and economic statistics (including labor) at the regional level. - NA: Income Account. Monetary: Flow of Funds not available. - Need for better labor market information (especially accurate information on the changing size of the labor force, activity rates, etc.). - Desire for regional division for as many statistics as possible for planning, research, and education. - Lack of regional statistics creates problems in international cooperation. - Need more regional information on occupations, wages, unemployment, education, and regional support and services. - Total lack of useful information about commerce (e.g., volume, profit, etc.); a private research unit has been set up to address this. - Accuracy and Reliability - Monetary statistics are unbiased but there is concern about accuracy. - Some respondents do not consider the statistics biased, but fear inaccuracy. - Serviceability - Volume of poorly classified branches of trade based on VAT returns covers two month period and is published too late to be useful. - Latest statistics at regional level (Municipal) from 1997. - Accessibility - Steep deterioration in reporting sectoral progress in recent years. - Abolishing the NEI was a mistake that has reduced the accessibility of some statistics. - In general there is lack of information describing the official statistics. - Balance of payments lacks methodological description. - Official websites (CBI, SI, and MOF) have improved a great deal, but certain statistics compiled by the NEI were more useful and more accessible. - Requests from users: - A calendar of release dates for GFS and a more clear and reliable release calendar for monetary and BOP. - Better methodological descriptions for all official statistics. - Can you easily access official statistics? - Yes, but too often by conversation instead of by reading official documents. - Most often yes, but not always. *Source: _cr05414 - 4. Serviceability* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05414.pdf_