GENERAL GOVENMENT SECTOR OF THE REPUBLIC OF ARMENIA

1. ՀԱՅԱՍՏԱՆԻ ՀԱՆՐԱՊԵՏՈՒԹՅԱՆ ԱԶԳԱՅԻՆ ՎԻՃԱԿԱԳՐԱԿԱՆ ԾԱՌԱՅՈՒԹՅՈՒՆ NATIONAL STATISTICAL SERVICE OF THE REPUBLIC OF ARMENIA GENERAL GOVENMENT SECTOR OF THE REPUBLIC OF ARMENIA Workshop on implementation of the 2008 SNA in EECCA countries and linkages with BPM6 and GFSM 2014 May 6-8, 2015, Istanbul, Turkey

2. Structure of Presentation • Institutional structure: current state • Characteristics of main data sources • Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014 • Questions 2

3. Institutional Structure: Current State • Accounts of the General Government sector are compiled annually according to methodology of the 1993 SNA and GFS 2001: • Economic classification (by types of expenditures) • Functional classification (by types of economic activity) • The General Government sector covers all government institutions and non-profit institutions (NPI) • Transactions are recorded according to the cash-basis method; an accrual method is not applied yet. 3

4. Institutional Structure; Current State • The General Government sector combines institutional units which fulfill functions of the General Governmentas a primary activity, i.e.a provision of goods and services on non-market basisto the society for collective or individual use and redistribution of income through transfers. • According to the level of regulatory authorities, the General Government sector includes: • Central government: • all government subdivisions which exercise authority throughout economic area of the country. • administration of 10 regions (marzs) which do not have budgetary autonomy • extra-budgetary funds (pension fund), resources and their use are also included in the central government. • Local government authorities

5. Characteristics of Main Sources of Information • General information is submitted by the Ministry of Finance (administrative register) as per: • Law on State Statistics of the Republic of Armenia • Law on Three-Year Statistical Work Program of the Republic of Armenia • Decision of the State Council on Statistics of the Republic of Armenia on the Procedure of reporting of Statistical Information No.11 of October 03, 2003 • Annual State Statistical Work Program 5

6. Characteristics of Main Data Sources • National accounts use consolidated data from quarterly and annual reports on execution of the state and local budgets (GFS 2001): • Quarterly figures are presented in aggregated form • Annual figures contain data on expenditures for each functional section • Additional sources: • Balance of Payments (BPM5, BPM6) • Report on main economic activities of organizations • Report on financing and expenditures of the State Social Security Service (Pension Fund) • “National Accounts of Armenia” yearbook is published annually. It contains a section of the general government sector (consolidated accounts, production account and generation of income account) by types of economic activity. 6

7. Characteristics of Main Sources of Information • Government institutions are non-market producers • Assessment of non-market output – sum of current expenditures: • intermediate consumption • compensation of employees • other taxes on production (less other production subsidies) • consumption of fixed capital • Intermediate consumption – cost of goods and services consumed within the accounting period. 7

8. Characteristics of Main Sources of Information • Final consumption expenditures: • Individual consumption (healthcare, education, culture, social protection) • Collective consumption (protection of public order and environment, defense and security, management of the economy) • Final consumption expenditures are determined by: • output of non-market services • plus expenditures on consumer goods and services provided to the households • Gross capital formation: • acquisition of equipment and valuables • construction • capital repairs • capital transfers 8

9. Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014 • In order to improve statistics on general government sector in the course of implementation of 2008 SNA and GFSM 2014: • The planning and preparations are made • The recommendations of the CIS Statistical Committee on alignment of the government finance statistics (GFS2014) indicators and the system of national accounts by a transition key method are considered • The model statistical classification of economic sectors recommended by the Eurasian Economic Commission is considered and implemented • Trilateral interdepartmental agreement has been concluded between the National Statistical Service, Ministry of Finance and Central Bank of the Republic of Armenia for implementation of 2008 SNA new international standard into the statistics of national accounts (23.10.2014).

10. Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014 • The Commission and interdepartmental working groups consisting of employees from NSS, MoF, CB, law enforcement authorities and State Committee on Property and Cadastre have been established. They develop the national strategic program on implementation of the 2008 SNA and GFS 2014 for next years, taking into account own resources and opportunities of international cooperation, and coordinate a process for implementation of this program: • Financialand insurance activities • General Government(military expenditures andresearch and development) • External sectoraccounts • Non-observedeconomy 10

11. Improvement of statistics of the General Government Sector within the context of implementation of the 2008 SNA and GFSM 2014 • Imputed rent of owner-occupied dwellings • Structure of non-financial assets • Input-output tables • Financial account • Working groups develop new methodological documentation with indication of necessary sources of information, perform experimental calculations to determine the changes affecting GDP. 11

12. Questions • Which sections of functional classification form the output of “Public Administration and Defense; Compulsory Social Security”branch (section O, NACErev. 2) • Reserve fund of the government and local authorities (section 11 -Reserve funds, unrelated to main sections) • Lack of information on expenditures (by economic classification) by types of economic activity inlocal authority budgets. • Which operating expenditures of the economic classification of the budget can be included in the output of non-market services in the respective industries (for example: grants, subsidies) • Lack of data on depreciation charges in budget expenditures, what are the approximate rates of consumption of fixed capital (in % to output of products) 12

13. Questions • Is it necessary to include all expenditures and revenues of the state budget in the accounts of the general government sector and as a result what is the correspondence between the state budget deficit and net lending / borrowing of the general government calculate in national accounts • Data sources on market services in “Public Administration and Defense; Compulsory Social Security” (section O,NACErev.2), delineation between payment for rendered services and tax collection • Implementation of the 2008 SNA is possible without implementation of GFSM 2014.Balance of payment is already compiled in accordance with the new BPM6 • Implementation of accrual method when recording the transactions 13

14. ՀԱՅԱՍՏԱՆԻ ԱԶԳԱՅԻՆ ՎԻՃԱԿԱԳՐԱԿԱՆ ԾԱՌԱՅՈՒԹՅՈՒՆ NATIONAL STATISTICAL SERVICE OF THE REPUBLIC OF ARMENIA THANK YOU FOR YOUR ATTENTION Web page: NSSRA http://www.armstat.am Workshop on implementation of the 2008 SNA in EECCA countries and linkages with BPM6 and GFSM 2014 May 6-8, 2015, Istanbul, Turkey