Implementation of the new edition of the Balance of Payments Manual (BPM6)

CBK will implement the sixth edition of the Manual of the Balance of Payments and International Investment Position (BPM6) of the International Monetary Fund (IMF) with the publication of statistics for the second quarter 2014, which will take place on September 30 this year. The implementation of BPM6 will be done simultaneously with the European Union countries. Balance of Payments Manuals are developed by the IMF in order to establish basic guidelines for compiling durable, qualitative and on time balance of payments statistics. The first edition was published in 1948. As a result of changes in economic and financial developments that the global economy has faced consistently, the IMF has updated manuals in 1950, 1961, 1977, 1993 and in 2009. Through this recent manual the IMF provides a standard methodology for all economies of the world regardless of their size or level of economic development.   Balance of Payments Manual serves as a standard framework for the compilation of statistics regarding the value of current transactions (balance of payments – BOP) and the accumulated value (International Investment Position – IIP), in an economy with the rest of the world. Furthermore, the manual explains the concepts, definitions and classifications for BOP and PIN. As a standard methodology, the manual enables international comparability of data for all economies of the world regardless of their size or economic development.   The new BPM6 Manual addresses many important changes that have occurred in the international economy since the previous edition published in 1993. The latest edition of the Balance of Payments Manual increased focus on PIN (which is reflected in the title of the manual itself) and elaborates broadly the components of the balance sheet. This manual also takes into account the developments as a result of globalization, for example, monetary unions, cross-border production processes, complex structures of international companies and remittances. In addition, the manual takes into account developments in international markets and financial innovations and the new complex instruments in the financial market. It does also increase integration of national accounts statistics and other macroeconomic statistics. The new manual has been developed in parallel with the manual “System of National Accounts” (ISA 2008) and is in full harmony with this manual. BPM6 is also in harmony with other specialized manuals for specific areas, which were published after the last publication, for example, the Manual for External Debt Statistics, Manual on Statistics of International Trade, Government Finance Statistics Manual, and Manual on Monetary Statistics, Manual of Financial Soundness Indicators, and Guidelines for International Reserves, etc. BPM6 can be downloaded from the website of the IMF: http://www.imf.org/external/pubs/ft/bop/2007/pdf/bpm6.pdf In general, the key frame of BPM6 has remained unchanged from the previous one recommended by the Balance of Payments Manual, fifth edition (BPM5). The overall changes to implement BPM6 are less structural than those that have been with the BPM5. Given the complexity and changes that contains the new edition of the manual BPM6, the IMF has urged countries to complete implementation of this manual by the end of 2014. IMF since August of 2012 has started publishing statistics by BPM6. Twenty-eight European Union countries agreed to begin with the publication of national statistics according to BPM6 by mid-2014. The European Central Bank and Eurostat will start to publish balance of payments and international investment position in accordance with BPM6 on the last quarter of 2014. Regarding statistics data, with BPM6 implementation, some of the components of the current and financial account will undergo changes in the structure of the components, but there will be no changes in the entire current account, capital and financial balance.   Full information regarding the methodological changes is available in Appendix 8 of BPM6. The IMF has prepared a summary of the most frequently asked questions regarding the implementation of major changes on BPM6, which can also be found on the website of the CBK. Furthermore, CBK offers on its website a conversion matrix in which the BPM5 standard components comply with standard components according BPM6. The matrix has been developed by the IMF and prepared in Albanian from CBK.     Frequently asked questions regarding the transition from version MBP5 in MBP6 and changes in treatment and classification under BPM6 Balance of Payments Manual and International Investment Position (BPM6)   Methodology of the Balance of Payments and International Investment Position (BPM6)