Proceedings of the IFC Conference on external statistics, co-organised with the Bank of Portugal (BoP) and the European Central Bank (ECB), Lisbon, Portugal, 17-18 February 2020.
Globalisation is posing important challenges to external statistics. The removal of national barriers induced by economic and financial liberalisation has made it harder for statisticians to promptly and correctly capture trade and cross-border financial and capital flows. These measurement challenges have been reinforced in recent decades by rapid digital innovation, the complexity and limited transparency of multinational corporate structures, and the increased importance of global financial centres.
A prominent feature has been the fragmentation of global production chains, which has altered the relevance of “traditional” residency-based statistics, while also affecting national economic indicators. Another important consequence of globalisation has been the changing nature of foreign direct investment (FDI): today, dominant FDI transactions are often financial in nature, instead of being motivated by “real production” considerations as in the past.
Promoting constant interaction between compilers and users of data is the key to understanding and addressing these kinds of challenges. Such an exchange of views is crucial, not only on a daily basis to respond to urgent requests, but also structurally to address medium- and long-term data requirements. As both producers and users of external statistics, central banks are ideally placed to foster this dialogue and facilitate a mutual understanding of the evolving needs to support policymaking.
One fundamental question is whether the multipurpose analytical tool provided by external statistics should be simply adapted or radically transformed to address the above-mentioned issues. The experience of central banks suggests that a progressive and flexible approach might be a preferred option, considering in particular the limited resources devoted to official statistics, competing priorities, and the fact that the challenges faced differ across countries. Another important consideration is that a number of alternative ways can be effectively developed in the medium term to adapt the current external statistics compilation framework.