Government Finance Statistics Manual 2014

The Government Finance Statistics Analytic Framework 79

For example, privatization proceeds or the repay-
ment of policy lending is treated as fi nancing while
capital injections or loans to public corporations
(policy lending) are added to expense in calculating
the overall fi scal balance. Calculating the overall fi s-
cal balance requires therefore a distinction between
transactions in fi nancial assets/liabilities undertaken
for public policy purposes and those undertaken
for liquidity management (see paragraph  4.29 and
Box 4.1).

4.58 Cyclically adjusted and structural balances
are other examples of fi scal indicators where infor-
mation from various datasets must be assembled.
Th ese more complex fi scal balances attempt to mea-
sure fi scal positions net of cyclical and other transi-
tory eff ects by taking into consideration the eff ects
of exogenous factors on the fi scal balance. Examples
of these more complex balances are also provided in
Table 4A.2. Cyclically adjusted balances are measures
of the government’s fi scal position in an economy as
if the economy was operating at potential gross do-
mestic product (GDP). Th ese balances can be calcu-

lated by adjusting the GFS concept of net lending/net

borrowing (or other fi scal balances in the GFS frame-

work) for the eff ect on revenue and expense of the dif-

ference between actual and potential GDP. Structural

balances are an extension of cyclically adjusted bal-

ances, by adjusting for a broader range of factors, such

as commodity prices, which may over- or understate

fi scal performance.

4.59 In resource-rich countries, analysts oft en

take into account the volatility of commodity prices

(which aff ects fi scal balances but is outside of the di-

rect control of government) when assessing fi scal per-

formance. Calculating nonresource balances requires

removing from net lending/net borrowing (or other

fi scal balances) net resource-related revenue a nd ex-

penditure. Th ese resource-related items are not avail-

able in the core classifi cations of GFS, but could be

provided in underlying source data.

4.60 Table 4A.2 presents a list of fi scal indicators

that are built using GFS with additional data. Th ese

fi scal indicators are usefully expressed as a percentage

change or as ratios of aggregates, such as GDP.

Table 4A.1 Fiscal Indicators Available from the GFS Framework

Fiscal Indicator Equivalent Term in Statistical Methodologies GFS Codes

Fiscal balances

Cash balance

(also referred

to as defi cit/

surplus)

Cash surplus (+) / Cash defi cit (–) (CSD) equal to the net cash infl ow from

operating activities minus the net cash outfl ow from investment in

nonfi nancial assets.

Cash surplus/cash defi cit is also equal to total cash fl ows from fi nancing

transactions.

C1–C2–C31, or

C1–C2M, or

NFB+NCB

Net operating

balance (NOB)

Revenue minus expense.

Net operating balance is also equal to change in net worth due to

transactions.

1–2

Gross operating

balance (GOB)

Revenue minus expense, excluding consumption of fi xed capital. 1–2+23

Net lending/net

borrowing (NLB)

Revenue minus expense minus net investment in nonfi nancial assets; or

Revenue minus expenditure; or

Net operating balance minus net investment in nonfi nancial assets; or

Gross operating balance minus gross investment in nonfi nancial assets.

Net lending/net borrowing is also equal to total fi nancing.

1–2–31, or

1–2M, or

NOB–31, or

GOB–31.1+31.2

32–33

Primary cash

balance

Cash surplus/cash defi cit excluding interest expense or net interest expense.

For gross debt sustainability analysis, use cash surplus/cash defi cit excluding

interest expense.

For net debt sustainability analysis, use cash surplus/cash defi cit excluding

net interest expense.

CSD+C24

CSD+C24–C1411