Press Release of June 30, 2000

Taking over the compilation of the national balance of payments

In accordance with the agreement "On the Preparation of the National Balance of Payments" signed on August 10, 1999 by the Bank of Latvia and the Central Statistical Bureau of Latvia, the Bank of Latvia is to take over the compilation of the balance of payments starting with the data for the first quarter of 2000. The aim of this agreement is to speed up and improve the compilation of the balance of payments, ensuring that EU requirements concerning the schedules for the dissemination the balance of payments are met. Experience of those European countries where the balance of payments is the responsibility of the central bank was taken into account. Also, since the Bank of Latvia has undertaken to collect and summarize the statistics on non-bank external payments, a large portion of the information required for the compilation of the balance of payments is already concentrated there.

National balance of payments and its significance

The national balance of payments is a statistical summary of the economic transactions of a country's residents with the rest of the world (non-residents) for a definite period of time (a month, quarter or year).

The balance of payments is one of the most significant sources of information to analyze economic development and to do macroeconomic forecasting. It is a valuable tool in assessing the volume of foreign investments and flow of funds in the capital and financial accounts, identifying possible sources for covering the current account deficit, evaluating a country's ability to pay its external debt and gauging the influence of these various indicators on that country's economic processes.

The information provided by the balance of payments can be of use when deciding whether to invest in the national economy or to issue loans, analyzing the foreign sector of the economy and forecasting and assessing the country's economic policy. This information allows every participant in foreign economic activity to analyze and predict their role in the interaction between the economies of various countries.

Sources of information and Bank of Latvia's role in their improvement

The national balance of payments is compiled from both the statistical data the Bank of Latvia has collected from enterprises and banks and those collected by other institutions, e.g., the Central Statistical Bureau, Ministry of Finance, State Treasury and Ministry of Foreign Affairs.

The statistics concerning external payments by non-banks compiled by the Bank of Latvia and the "Aggregated data on contracts for employment abroad concluded by natural persons" submitted by enterprises that mediate employment contracts between the citizens or permanent residents of the Republic of Latvia and employers registered abroad are brand new sources of information. Sources of information used previously have also been improved this year, for example, information on the income and expenditures of the Republic of Latvia embassies, missions and consulates abroad is now broken down by country.

To obtain more precise information on, for example, transactions in the financial and capital markets, the Bank of Latvia expects to expand its range of sources collaborating with the Insurance Supervision Inspectorate, the Securities Market Commission and other institutions.

Availability of information

The statistics on the national balance of payments and balance of international investments will be published at the Bank of Latvia's web page () and in its bulletin "Latvia's Balance of Payments". For dates of publication, please refer to the Bank of Latvia's web page and the IMF Data Dissemination Standards Bulletin Board web page (