Up-to-date and adequate statistics is the basis of both micro- and macroeconomic decisions. Eesti Pank draws up the balance of payments of the Republic of Estonia and banking statistics which help the central bank to fulfil its basic functions. Eesti Pank also collects and uses economic statistics of other institutions and countries when analysing the Estonian economy and the foreign economic environment. As a public service, Eesti Pank provides fresh and adequate statistics also to the external users.
BALANCE OF PAYMENTS
Eesti Pank's greatest responsibility lies in the field of foreign economic since according to the Law of the Central Bank of the Republic of Estonia the central bank draws up the country's balance of payments. The role of the central bank in compiling the balance of payments was detailed in the Official Statistics Act adopted on 1 July 1997, under which Eesti Pank is the second main body to organize the collection of national statistics besides the State Statistical Office. The above act should considerably improve the quality of collecting national statistics since it specifies both the providers of data, the organizers of statistical studies and the protection of data, as well as punishments for failing to provide the required data or knowingly distorting the data.
The aim of the statistics of the balance of payments is to reflect the economic transactions between the country in question and the rest of the world over a certain period of time and thus offer all agents on the market systematic information on the foreign economic transactions of a given country. The transactions can be in the form of goods, services, investments, etc (see Estonian Economy, Table 2.10 and Statistical Appendix, Table 2). In addition to the balance of payments, Eesti Pank also compiles another document that characterizes Estonia's foreign economic relations - the international investment position (see Estonian Economy, Table 2.11).
Changes in the Balance of Payments Statistics
Eesti Pank has been compiling Estonia's balance of payments since 1992. From that time, the methodology of data collection and sources have been constantly improved and specified. In addition to Eesti Pank's balance of payments questionnaires and banking statistics, data collected and processed by a number of other institutions is used. The main sources of information are the State Statistical Office, the Ministry of Finance and the Central Depository for Securities.
The balance of payments of Estonia is drawn up once a quarter. According to international practice, preliminary data is released on the 10th to 13th week after the end of the quarter. The final data, used in longer time series, is usually published 1.5-2 years later. There have been occasions when countries have revised their balance of payments for the period of up to ten years.
In September 1997, Eesti Pank released Estonia's balance of payments for the second quarter of the current year, complemented with the time series of data on the previous five quarters. After publication, however, new important information was received and therefore considerable corrections had to be made in the data already published.
In compiling the foreign trade section of the balance of payments, Eesti Pank uses the customs statistics processed by the State Statistical Office. The customs statistics is based on either of the two internationally acknowledged methods, the general trade system or the special trade system. The main difference between these two methods is that in the first case import into customs warehouses and re-export from there is included, while in the second case it is not. The countries are free to choose the method.
The Estonian customs statistics is collected using the general trade system. Changes in the recording of goods stored into customs warehouses introduced from 1 October 1996, created a situation where the share of customs warehouses in exports and particularly imports increased considerably. However, transactions made in customs warehouses are mainly transactions between non-residents (with the exception of import from customs warehouses into free circulation) and are only linked with the Estonian economic space through storage and various transport services.
Since the balance of payments, as a rule, only reflects transactions between residents and non-residents, it is more correct to proceed from the special trade principle in drawing up the balance of payments. This approach is also supported by Estonia's favourable geographical position for transit trade and the importance of transit for the Estonian economy.
In co-operation with the National Customs Board and the State Statistical Office, Eesti Pank studied the movement of goods through the customs warehouses and determined the volume of trade that had to be excluded from the balance of payment statistics for 1996 and the first half of 1997. As a result, the deficit of the current account changed considerably in the first half of 1997, from the previously announced EEK 4.3 billion to EEK 3.2 billion. The 1996 deficit was also somewhat reduced.
Since the Estonian side had not actually paid for goods stored into customs warehouses, it led to an unjustified increase of the trade credit debts. This, in turn, distorted the financial account, creating an illusion of extensive inflow of short-term capital. After the above-mentioned changes had been made in the foreign trade statistics, the trade credit liabilities of residents also decreased.
The above changes reflect Estonian's foreign economic transactions more adequately and correspond fully to the international standards. The changes were also approved beforehand by the International Monetary Fund (IMF), which co-ordinates the methodology of compiling the balance of payments, and other foreign experts.
The right to collect data from credit institutions is granted to Eesti Pank by the Law of the Central Bank of the Republic of Estonia as well as the Credit Institutions Act. Unlike the balance of payments statistics, the collection of which is the official function of the central bank under the Official Statistics Act, the banking statistics first of all serves to support the main functions of Eesti Pank itself - banking supervision, monetary policy, analysis of the financial sector and monitoring of the development of payment facilities. Also, Eesti Pank has to pass on banking statistics to international institutions such as the IMF and, in the future, to the European Central Bank.
In order to inform the general public of the developments in the Estonian banking sector, Eesti Pank publishes data on the balance sheets of credit institutions, their lending activity, securities portfolio, external assets, equity, interest rates, etc . In carrying out its primary functions as a central bank, Eesti Pank is much concerned about the continuing development of the Estonian financial markets, transparency of the markets and good business practices pursued on these markets, and therefore also publishes the balance sheet data of individual credit institutions.
Development of Banking Statistics in 1997
The rapid development of the Estonian banking sector sets high requirements on the methodology of collecting banking statistics which has to reflect developments on the financial markets adequately. Therefore, the reporting forms sent out to the banks and methodology have been constantly improved. After a three-month test period, reporting on the structure of assets (loan portfolio and the securities portfolio) and liabilities (resources raised by credit institutions) was introduced from April 1997. As a result, it is now possible to examine in more detail the financing of the credit institutions and investments into various institutional and economic sectors, the structure of loan collaterals, distribution of the securities portfolios, etc. The new reporting methodology yields better results also in calculating the interest rates in case of following interest rates across different currencies and institutional sectors.
At the end of 1997, a draft for reporting payment statistics, an area previously uncovered, was completed. The methodology has been drawn up in accordance with the recommendations and terminology of the so-called Blue Book of the European Monetary Institute on the comparative statistics of the payment systems of the European Union (EU) member states, as well as the needs of Eesti Pank and proposals of the credit institutions. The testing of the payment statistics reports began in December 1997 and will continue throughout the first half of 1998. The aim of collecting payment statistics is to obtain information on the total turnover of payments and the distribution of the different payment instruments, at the same time keeping track of the use of bank cards, telephone and Internet banking and the development of other non-cash payment services offered by credit institutions. The data thus collected will, on one hand, support the strategy of Eesti Pank for the development of the payment and settlement systems (see Payment and Settlement System) and, on the other hand, help credit institutions in designing new products for their customers.
International Monetary Fund
In order to guarantee the comparability of the balances of payments, the IMF has since the 1950s published handbooks on the methodology of compiling the balance of payments. The most recent of those, the fifth edition, was published in 1995 and most of the world countries try to follow its recommendations. Estonia has applied most of the recommendations and thus our balance of payments statistics is comparable to that of any other country.
In the field of monetary and banking statistics, the IMF in 1997 presented the working draft of a respective methodological guide - the Manual on Monetary and Financial Statistics. The manual covers in more detail than ever before the collection of the financial sector statistics and methodology of keeping records. Special attention is paid on financial derivatives for which no internationally acknowledged principles of comparison existed. The final version of the IMF Manual on Monetary and Financial Statistics is expected to be completed in the first half of 1998 and it will be the basis for developing the respective sphere of statistics for Eesti Pank.
The Estonian balance of payments statistics as well as banking statistics are regularly published on the Estonian page of the IMF's statistical bulletin International Financial Statistics.
Special Data Dissemination Standard
In 1995, the IMF began to introduce the Special Data Dissemination Standard (SDDS), aimed at improving the availability of fresh and comparative statistics on the countries active on international financial markets. The importance of correct and timely statistics was also proved by the events that took place in the financial markets in the autumn of 1997. The SDDS identifies the data disseminated in the framework of economic and financial statistics requirements in four dimensions:
- coverage, periodicity and timeliness of publishing the data;
- access by the public;
- integrity of the disseminated data;
- quality of the data.
Subscription the SDDS is voluntary (recommended to members of the IMF) and their inclusion into the pages of the electronic Dissemination Standard Bulletin Board (DSBB)  is gradual, depending on the country's readiness to conform its statistics to the requirements of the special standard. So far, 37 countries have joined the SDDS.
The required data covers four areas:
- the real sector (national accounts, production indices, the labour market, price indices);
- the fiscal sector (general government or public sector operations, central government debt);
- the financial sector (the analytical accounts of the banking sector and the central bank, interest rates, the stock market);
- the external sector (the balance of payments, foreign trade, international investment position, exchange rates, international reserves).
Estonia has decided in principle to join the SDDS. In September 1996, a working group of Government was set up under the Ministry of Finance to prepare Estonian statistics for meeting the requirements of the SDDS. The financial and external sector statistics is the responsibility of Eesti Pank. The first results of the working group indicated that the majority of Estonian economic and financial data already corresponds to the requirements of the SDDS. The main problem is the methodology of calculating the labour statistics and the deadlines for publishing the GDP data.
Subscribing member would have to disseminate a long-range calendar that identified, at least one quarter in advance the day the release will take place. This means that the system of disseminating statistical information in Estonia has to be modernized and a more rigid framework for publishing dates and procedures has to be introduced.
Institutions of the European Union
In the European Union, statistics is collected by two institutions, the Statistical Office of the European Communities (Eurostat) and the European Monetary Institute (EMI), the future European Central Bank. Eesti Pank started forwarding various economic statistics to Eurostat on a regular basis in 1997. Based on the adequate statistical data provided by Estonian institutions, Estonia was chosen to the first round of negotiations to sign an accession treaty with the European Union.
The requirements of Eurostat are clear by now, but the EMI has not made its final requirements known yet. Apparently, this will happen in May 1998, after the establishment of the European Central Bank (ECB). Both Eurostat and EMI proceed in their requirements and methodology mostly from the principles elaborated by the IMF. At the same time, more specific data is required in the statistics used for regulating economic relations within the EU, including statistics relevant in the framework of the European Monetary Union (EMU) to develop unified monetary policy (money supply, interest rates, foreign reserves of central banks, etc). The latter also makes the Member States collect information proceeding from the geographical aspect, in order to monitor the EMU region's relations with the rest of the world (the balance of payments by countries, claims and liabilities of banks by countries).
At the end of 1996, Eesti Pank began to analyse the comparability of the statistical data collected by the bank with the requirements of the future European Monetary Union, both from the legal and the content aspect. In 1998, the most important task is the introduction of the above-mentioned geographical aspect, compiling certain balance of payments entries on a monthly basis instead of the quarterly basis, and improving the coverage of the banking sector in accordance with the EMI definition of Monetary Financial Institutions.
 Month, quarter, year.
 The banking statistics is available from the publications of Eesti Pank, as well as from the bank's home pages in the Internet (http://www.bankofestonia.info).
 The Internet address is http://dsbb.imf.org.