BALANCE OF PAYMENTS STATICTICS OF TURKEY Murat TOPKAYA

BALANCE OF PAYMENTS STATICTICS OF TURKEY Murat TOPKAYA National Seminar on Developing A Program for the Implementation of the 2008 SNA and Supporting Statistics in Turkey 10 September 2013 STATISTICS DEPARTMENT BALANCE OF PAYMENTS DIVISION

OUTLINE • • Legal Framework Methodology Compilation Method Major Data Sources Main Items Publications BPM 6 Implementation

LEGAL FRAMEWORK CENTRAL BANK OF THE REPUBLIC OF TURKEY (CBRT) LAW Law No: 1211 Date of Acceptance: 14. 1. 1970 PART IV- Authority to request information, the balance sheets and reports of banks Article 43 - (As amended by Law No. 4651 of April 25, 2001) Paragraph 4: «… The Bank shall be authorized to directly request and collect, all statistical information relating to financial system and other statistical information that shall be deemed necessary for the surveillance of developments in the economy and the balance of payments, from banks, other financial institutions and persons. The aforesaid persons shall be obliged to submit these information accurately within the period and form to be determined by the Bank. The Bank shall be authorized to investigate and supervise the accuracy of these information at the concerned parties, and to request additional information and documents. » Paragraph 5: «… The Bank may publish the statistical information that it deems necessary. However, the Bank shall not publish, disclose or submit the statistical information having a private and personal nature to an official authority or private body other than the Banking Regulation and Auditing Institution. These information shall not be used for purposes other than statistics and shall not be considered as evidence. »

METHODOLOGY • IMF Balance of Payments Manual 5 th Edition (BPM 5) Studies are still in-progress for adopting the 6 th Edition (Balance of Payments and International Investment Position – BPM 6), planned to be finalized in 2014. 2 Basic Principles Conversion Economic Territory Unit of Account: USD Residency Accounting Principles Double entry Change of ownership Market value

COMPILATION METHOD • International Transactions Reporting System - ITRS Foreign exchange transaction reports of the resident banks and the CBRT : “Monthly FX Reports” • Direct Reporting Data provided through direct reporting of the related resident enterprises • Administrative Records

MAJOR DATA SOURCES - I • International Transactions Reporting System - ITRS: “Monthly FX Reports” of the banks and the CBRT • Foreign trade statistics compiled by the Turkish Statistical Institute (Turkstat) • Credit and debit figures on freight and insurance regarding merchandise trade, provided by Turkstat • The surveys conducted by the Ministry of Culture and Tourism, Turkstat and the CBRT on travel revenues and receipts • Data provided through direct reporting of the related resident enterprises • Stocks data on nonresidents’ portfolio investments provided from custodian banks • Annual direct investment survey • Financial press

MAIN ITEMS • Current Account – – Goods Services Income Current Transfers • Capital and Financial Account – – Direct Investment Portfolio Investment Other Investment Reserve Assets • Net Errors and Omissions

CURRENT ACCOUNT GOODS Foreign Trade Statistics (Turkstat) • Exports f. o. b. basis • Imports c. i. f. basis • Imports adjusted as f. o. b. • Shuttle Trade: Survey conducted by Turkstat – Average Expenditure – Number of shuttle traders

CURRENT ACCOUNT SERVİCES • Transportation – Freight – Other Transportation • Travel • Construction Services • Insurance Services • Financial Services • Other Business Services • Government Services • Other Services

CURRENT ACCOUNT TRANSPORTATION-I Freight – In the balance of payments statistics, freight services provided to nonresidents by resident transport operators regarding exports are recorded as credit, whereas freight services acquired from nonresident operators by residents regarding imports are recorded as debit. – Credit and debit figures for freight services are calculated within the framework of the results of a monthly study performed by Turkstat based on the invoices attached to customs declaration forms.

CURRENT ACCOUNT TRANSPORTATION-II Modes of Transport 1 -Sea Transport 2 -Air Transport 3 -Other Transportation / Credit – Debit • Passenger • Air (Source: Domestic and Foreign Airline Operators) • Other • Air (Source: Domestic and Foreign Airline Operators, General Directorate of State Airports Authority) • Sea (Source: General Directorate of Coastal Safety)

CURRENT ACCOUNT SERVİCES • Travel: – Revenues : TURKSTAT Departing Foreign Visitors Survey – Expenditures: TURKSTAT Arriving Citizens Survey • Construction Services: – "Monthly FX Reports" of resident banks • Insurance Services: – Surveys conducted within resident insurance companies – Freight insurance provided by Turkstat • Remaining Other Services: – Monthly FX Reports of the resident banks and the CBRT – Surveys conducted with various companies

CURRENT ACCOUNT INCOME & CURRENT TRANSFERS CURRENT ACCOUNT/ INCOME: • Compensation of Employees: – Calculated by data provided by the Ministry of Labor and Social Security foreigners who have been granted work permits • Investment Income: – Monthly FX Reports of the resident banks and the CBRT – Reinvested Earnings: Annual inward direct investment survey CURRENT ACCOUNT/ CURRENT TRANSFERS: – Monthly FX Reports of the resident banks and the CBRT

CAPITAL ACCOUNT • Migrant’s Transfer: Official Records • Acquisition or Disposal of Non-produced and Non-financial Assets: – Turkish sport clubs which report revenues gained and expenses incurred from nonresident sports clubs for the transfer of a player.

FINANCIAL ACCOUNT DIRECT INVESTMENT • Equity Capital: Monthly FX Reports of the banks • Equity Capital/Non-cash transactions: Ministry of Economy • Reinvested earnings: Annual inward direct investment survey • Other Capital: Banks’ reports on a credit by credit basis • Real Estate: «Departing Visitors Survey» and administrative records of General Directorate of Land Registry and Cadastre • «The Daily Bulletins» of Borsa Istanbul and financial press are also used.

FINANCIAL ACCOUNT PORTFOLIO INVESTMENT Assets • Monthly FX Reports of the banks and the CBRT Liabilities • Equity Securities: Central Registry Agency of Turkey (CRA) • Debt Securities/Issued In International Markets: Monthly FX Reports of the banks and the CBRT • Debt Securities/Issued Domestically and Purchased by Non-residents: • Issued by the General Government: Custodian banks, on a security by security basis • Issued by Banks and Other Sectors: CRA, on a security by security basis

FINANCIAL ACCOUNT OTHER INVESTMENT-I Assets • Trade Credits • Disbursements: Turkstat exports by type of payments data • Repayments: Estimated by an moving average method • Loans: Monthly FX Reports of the banks and the CBRT • Currency and Deposits • Banks: Monthly FX Reports and the trial balances of the banks • Other Sectors: BIS Locational Banking Statistics

FINANCIAL ACCOUNT OTHER INVESTMENT-II Liabilities • Trade Credits: • Disbursements: Turkstat imports figures for cash against goods and monthly FX Reports of the banks for the remaining types of payments • Repayments: Estimated by an moving average method • Loans: Monthly FX Reports of the banks and the CBRT Private Sector External Debt Monitoring System (PS-EDMS): Short-term loans of all sectors & long-term trade credits, loans and international bond issues of the private sector on a credit by credit basis • Currency and Deposits: Monthly FX Reports of the banks and the CBRT and banks’ trial balances

FINANCIAL ACCOUNT RESERVE ASSETS Monthly FX Reports of the CBRT

BALANCE OF PAYMENTS PUBLICATIONS • • Balance of Payments Statistics International Investment Position Outstanding Loans Received From Abroad by Private Sector Short-term External Debt Statistics International Reserves/Foreign Currency Liquidity Real Effective Exchange Rate Bank For International Settlements (BIS) - Consolidated And Locational Banking Statistics

BPM 6 IMPLEMENTATION- I • Implementation of BPM 6 standards will be starting in 2014. • BOP data for 2002 -2012 periods were converted to BPM 6 template. • The ODEN (Balance of Payments) Project was implemented. v Aims to reduce human intervention to a minimum v XML (e. Xtensible Markup Language) based report forms v Automated cross-checks v Flexible Data Compilation Process v Fully Integrated System

BPM 6 IMPLEMENTATION- II • Studies within the context of BPM 6: v Manufacturing services on physical inputs owned by others (Goods for Processing) v Maintenance and repair services (Repairs on Goods) are recorded under Services, where these items were recorded under goods in BPM 5. Compiled within an on-going study by the TURKSTAT and to be reflected in the BOP statistics of Turkey.

BPM 6 IMPLEMENTATION- III • Studies within the context of BPM 6: v Taking into account the changes in the methodology of the tourism statistics by European Statistics Office (EUROSTAT) and United Nations World Tourism Organization (UNWTO), Turkish Statistical Institute (TURKSTAT) announced on February 14, 2013 with a Press Release that its tourism statistics methodology was revised. International Recommendations for Tourism Statistics (IRTS 2008) v It is recommended that tourism statistics should allow tourism related expenditure to be identified in “travel” and “international passenger transport” as a supplementary item to the standard components of the balance of payments. This is also a recommendation that is explicitly mentioned for the balance of payments compilation.

BPM 6 IMPLEMENTATION- IV • Revisions and expenditures included in tourism income: v International transportation expenditures of visitors realized by using domestic companies v Marina service expenditures of visitors such as rent, electricity, water etc. v GSM roaming expenditures of visitors v The revision of the ratio of the amount of package tour expenditures remained in Turkey which is determined in 2001 • Revisions and expenditures included in tourism expenditures: v International transportation expenditures of Turkish citizens realized by using foreign companies v GSM roaming expenditures of Turkish citizens v The revision of the ratio of the amount of package tour expenditures remained abroad which is determined in 2003

BPM 6 IMPLEMENTATION- V With the publication of January, 2013 balance of payments statistics, consistent with International Monetary Fund (IMF) Balance of Payments Manual 5 th Edition (BPM 5), since the items; * Current Account / Services / Transportation / Other Transportation and * Current Account / Services / Other Servies already covers “international transportation fees” and “GSM roaming fees”, only other revisions resulted from “updating the package tour ratio” and “marina services” has been reflected in “Current Account/Travel” item covering the period between 2003 -2012.

BPM 6 IMPLEMENTATION- VI • Studies within the context of BPM 6: v FISIM and other implicit financial services are planned to be calculated and included in services. v Insurance Services, namely, (a) Direct Insurance, (b) Reinsurance, (c) Auxiliary insurance services, (d) Pension and standardized guaranteed services as defined in BPM 6, are planned to be recalculated to adjust for claim volatility, taking into account also the premium supplements.

BPM 6 IMPLEMENTATION- VII • Studies within the context of BPM 6: v A separate supplementary breakdown of travel will be provided according to product group, namely: (a) goods, (b) local transport services, (c) accommodation services, (d) food-serving services, and (e) other services. This breakdown is already available in the TURKSTAT Departing Foreign Visitors and Arriving Citizens surveys. v Financial derivatives transactions

BPM 6 IMPLEMENTATION- VIII • Studies within the context of BPM 6: v. Following the meeting on ITS statistics held in November 2011 under the co-ordination of the Republic of Turkey Ministry of Economy and with the participation of the CBRT and TURKSTAT officials: – A strategic action plan was adopted, – Working groups were formed also with the participation of the related regulatory and supervisory institutions, – Meetings were held throughout 2012 with a focus on the following services items: “Travel”, “Transportation”, “Construction”, “Audiovisual Services”, “Computer Services”, “Education Services” and “Health Services”. – The work is still in progress for this joint long-term study.

THANK YOU STATISTICS DEPARTMENT BALANCE OF PAYMENTS DIVISION