Australian Bureau of Statistics
5342.0 - Balance of Payments Statistics, Information Paper on Quality , 1996
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 20/02/1996
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3.74. Table 10 shows, for each of the main balance of payments aggregates, counts of positive, negative or zero revisions derived by deducting the initial estimates for each period from the latest available estimates for those periods. Revisions for the months from January 1986 to June 1994 and the quarters from March quarter 1986 to June quarter 1994 have been analysed. (Revisions to annual data are not analysed here because the small number of observations available would be unlikely to yield useful statistics.) For example the first published estimate of merchandise exports (on a shipping date basis) for January 1991 was $3,905 million. In data consistent with the January 1995 issue of 5301.0 that estimate had been revised to $3,969 million. This is counted as one positive revision in Table 10.
3.75. The direction of revision relates to the upward (positive) or downward (negative) adjustment that the initial estimate has undergone to reach the latest estimate (estimates consistent with the January 1995 issue of 5301.0 and the December quarter 1994 issue of 5302.0). In the case of net series, such as balance on merchandise trade, net services, and total general government transactions, a positive revision indicates an increase in a surplus or a decrease in a deficit and a negative revision is a decrease in a surplus or an increase in a deficit.
3.76. Broadly, the information contained in Table 10, which in the absence of bias in the initial estimates would be expected to show approximately equal numbers of positive and negative revisions over the revisions history for any series, complements the information shown in Table 6. Table 10 provides a long-term view of the revisions process from initial to final estimate whereas Table 6 presents a measure of the short-term performance from initial to one-year estimates. While many analysts focus on the expected short-term behaviour of revisions when assessing the significance of initial estimates, it is useful for others to place this short-term performance within a longer frame of reference.
3.77. When comparing data in Table 6 and Table 10 it should not be forgotten that Table 10 shows only counts of revisions (without regard to size) whereas Table 6 shows only monetary values. The different long-term and short-term perspectives should also be kept in mind. For example, one-year revisions may be on a path that is towards the final outcome, but in some cases there may be a tendency for a one-year revision in one direction to work against a longer term tendency for revision in the other direction.
Sign of monthly revisions
3.78. Looking first at the monthly data in Table 10, it can be seen that in the long-term revisions to the merchandise trade items show little bias in terms of direction of revision - this is consistent with the statistics on the one-year revisions experience shown in Table 6. Both services credits and services debits are strongly positively biased in Table 10, while in Table 6, the positive direction of revisions in the short term is not nearly as marked. This tends to suggest that positive revisions continue to be made after the end of the first year. This is borne out by an examination of Graphs A.7 and A.8 in Appendix 1. A similar position is evident for income. Table 10 indicates that income credits revisions tend to be positively biased while revisions to income debits are strongly positively biased (more than twice as many positive as negative revisions). Table 6 confirms this picture with the direction of one-year revisions to income debits being positive but for income credits the one-year revisions are not consistently in one direction. Graphs A.5 and A.6 are consistent with these findings from Table 3.1 and Table 10. In particular, Graph A.5 indicates that significant positive revisions to income credits are made after the end of the first year. Table 6 also indicates no clear direction in one-year revisions to unrequited transfer debits, while Table 10 shows a strong positive bias for longer term revisions to these estimates; both findings are in keeping with Graph A.10.
Sign of quarterly revisions
3.81. Turning to the counts of revisions to quarterly statistics shown in Table 10, it can be seen that in the merchandise trade items there is a tendency toward positive revisions to exports and negative revisions to imports. Table 6 is consistent for exports but indicates no clear direction for imports revisions (the median value being -$2 million) measured one year after the initial estimates. Graph A.16 provides further explanation for these findings, showing that the initial imports estimate is virtually equal to the latest estimate on average and that revisions are insignificant in value terms. In Table 10 revisions to both services credits and debits are strongly positively biased. This is consistent with Table 6 for debits but not so for credits where Table 6 indicates a slight tendency for one-year revision to be negative (-$11 million). This indicates that positive revisions to services credits must predominate after the end of the first four quarterly revisions. Examination of Graph A.21 in Appendix 1 confirms this and it can be seen that, even after 12 quarterly revision cycles (i.e. after three years), the revised estimate still represents on average less than 95% of the latest estimate.
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