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Source: MIL-OSI Submissions

2020 revisions to balance of payments and national accounts – Methods paper

11 September 2020

This page explains the revisions to the data sources and methods that will be included in the balance of payments and national accounts for 2020.

We make revisions annually, in line with international best practice, to ensure the statistics continue to reflect our changing world. Revisions fall into three broad categories:

  • new or updated information becoming available
  • new or updated annual benchmarks
  • conceptual or methodology changes.

These revisions will appear in the following upcoming releases:

  • Balance of payments and international investment position: June 2020 quarter – release date 16 September 2020
  • Balance of payments and international investment position: Year ended 31 March 2020 – release date 25 September 2020
  • Gross domestic product: June 2020 quarter – release date 17 September 2020
  • National accounts (income and expenditure): Year ended March 2020 – release date 20 November 2020
  • National accounts (industry production and investment): Year ended March 2019 – release date 20 November 2020.

The above releases will also include data on goods and services from International trade: June 2020 quarter, which was published on 2 September 2020. Revisions that were included for this release are detailed here: International trade: June 2020 quarter – data sources and methods.

Seasonal adjustment
Sharp changes in activity pose challenges for our usual seasonal adjustment processes. This has affected some series in the March and June 2020 quarters. We have reviewed all series exhibiting unusual changes in activity and have applied outliering of the latest data point where required. This has the effect of subduing the impact of unusual data points on the seasonal adjustment process. We will continue to monitor our seasonal adjustment over the next few quarters and will make interventions where required.

It is not possible to estimate current trend levels to Stats NZ’s usual quality standard until we know the full effect of COVID-19 on the time series. Once the series stabilises, we will estimate the COVID-19 effect on trend. The timeframe for this will vary for different series depending on how they are specifically affected by COVID-19.

Imputation
For the balance of payments release, we collect data about transactions and balances of international financial assets and liabilities; and foreign investment in New Zealand and New Zealand’s investment abroad through the Quarterly International Investment Survey (QIIS).

When a business is unable to respond to the QIIS questionnaire, we impute a value for them by using other available information. For the June 2020 quarter, we changed our imputation method for some QIIS question responses from historic imputation to carry forward movement factor imputation.

Historic imputation uses a business’ past data to estimate the current value. Carry forward movement factor imputation uses current data from businesses who have responded to the survey for the current quarter, as well as the business’ past data. We changed our imputation method for the June 2020 quarter to better reflect the ongoing change in the economy resulting from COVID-19. We plan to continue this imputation method in future quarters.

Investment income
Each June quarter, we update investment income estimates derived from Inland Revenue (IRD) data, to reflect the latest income tax returns. IRD data is an under coverage estimate for the overseas income of individuals, trusts, and small companies not included in surveys. We classify all IRD data to ‘other investment income’ as we cannot distinguish between the different types of income that make up this estimate.

Personal transfers
We revised personal transfers back to the March 2014 quarter. Revisions result from:

  • incorporation of updated household economic survey data from the September 2017 quarter
  • updates in migration data.

The revisions affect the current account, secondary income, and may also impact on real gross national disposable income.

Overseas reinsurance claims from the Canterbury and Kaikōura earthquakes
We updated reinsurance claims and settlements based on updated data from insurance companies. The revision increased reinsurance claims and settlements for the Canterbury and Kaikōura earthquakes.

Compensation of employees
For compensation of employees, we use data from IRD to estimate wages paid to non-resident seasonal workers. For the June 2020 quarter, we received more up-to-date provisional data from IRD, which better captures the impact of COVID-19.

Other revisions to the national accounts in November and December
Other revisions will be published in the following national accounts releases to be published on 20 November 2020:

  • National accounts (income and expenditure): Year ended March 2020
  • National accounts (industry production and investment): Year ended March 2019.

We will publish more information on our website before the November releases, describing how the revisions will affect key measures, including current-price GDP.

We will show how these changes and other methodological improvements affect the September 2020 quarter GDP, to be published on 17 December 2020. The release will also include revisions from our regular incorporation of annual benchmarks.

MIL OSI