As of October 2014, the Bank of Italy has adopted the new international standards laid down by the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6), published by the IMF, and the new European System of National and Regional Accounts (SEC 2010). The shift to the new standards was agreed at international level and during 2014 involved all the EU countries. It was made in parallel in order to harmonize, in terms of content and presentation, the external accounts and the national accounts.
The sixth edition of the Balance of Payments and International Investment Position Manual takes account of the changes that have occurred in the world economy in recent years: the growing international fragmentation of production, the complexity of international firms' structures, the increased attention paid to financial aspects. The changes with respect to the previous standards concern definitions, methods and measurements. The most important are discussed in the linked document.
The impact of the new standards
With the publication of the new Balance of Payments and International Investment Position, the Bank of Italy is also making available historical data reconstructed for the period 1995-2012, with less detail for the earlier years. Overall, the revisions do not significantly change the valuation of Italy's external relations, since the most important items and the main balances remain almost unchanged.
The main effects of applying the new standards are on the items of the current account. As regards merchandise trade, there are reductions in the flows both on the sales abroad side (credits) and on the purchases side (debits) following the elimination from that item of the gross exports and imports connected with processing; the net effect on the balance is negative but negligible at 0.01 percent of GDP per year (see the table for more detail for 2012, the last year for which definitive data are available based on BPM5). By contrast, the effect of the revisions on gross flows of services is an increase, that is small on the credit side and slightly more significant on the debit side, where the inclusion of indirectly measured financial services makes a greater impact; the overall effect on the services balance is again negative and a bit more pronounced, but still less than 0.1 percent of GDP. As a result of the revisions the current account balance declines slightly, roughly by 0.1 percent of annual GDP.
|Revisions of the main items of the current account in 2012 (1)
|(difference between the amounts calculated on the basis of BPM6 and BPM5)
|% of GDP
|Primary and secondary income (2)
|Data revised in July 2015.(1) 2012 is considered because it is the last year for which definitive data are available based on BPM5. - (2) They coincide with the sum of the BPM5 items “Income” and “Transfers”.
The Financial accounts, compiled by the Bank of Italy, undergo some changes envisaged by the new European system of national accounts (ESA2010), which enter into force together with BPM6.
The new standard modifies the line of demarcation between financial and non-financial corporations, dividing pure holding companies from those that undertake management activities, and permits a more accurate representation of transactions within the financial sector and of the role of special purpose vehicles. The reclassification of holding companies entails a reduction in non-financial private sector debt of about €12 billion (around 0.7 percent of GDP) to the end of 2013. The list of financial instruments is expanded to include provisions for calls under standardized guarantees, employee stock options, claims of pension funds on pension managers, and entitlements to non-pension benefits.