The Government Finance Statistics Analytic Framework 67
Analytic Objectives.
4.4 Th e GFS analytic framework is a quantitative
tool that supports fi scal analysis. To permit eff ective
analysis of fi scal policy, the GFS framework must fa-
cilitate the identifi cation, measurement, monitoring,
and assessment of the impact of a government’s eco-
nomic policies and other activities on the economy.
4.5 To achieve the analytic objectives, the GFS
framework should generate data that:
- Are suffi ciently detailed and eff ectively organized
to allow an assessment of management and pol-
icy decisions - Are closely linked to other macroeconomic sta-
tistical frameworks (national accounts, balance
of payments and international investment posi-
tion, and monetary and fi nancial statistics) - Enable analysts to assess the fi nancial soundness
of the general government and public sectors in
ways commonly applied to other organizations
in the economy^4 - Enable assessment of sustainability over the long
term - Enable assessment of liquidity constraints and fi -
nancing needs.
Construction of the Analytic
Framework: Relation to the GFSM 1986
4.6 Th e analytic framework of this Manual builds
on the GFSM 1986 framework, and extends it by incor-
porating additional elements that are useful in assess-
ing fi scal policy. Th ere are three types of modifi cations:
- Th e defi nitions of individual statistical variables
are closely aligned with economic concepts. An
important example is the treatment of nonfi nan-
cial assets, where the sale of such assets is no lon-
ger included in revenue and their purchase is no
longer included in expense. - Concepts are harmonized with the 2008 SNA.
Th ese include: the shift from a functional-based
defi nition of general government and public
sectors to one built on institutional units (see
paragraphs 2.22–2.48); a switch from using only
(^4) Organizations in other sectors of the economy record their op-
erations in the form of integrated accounting systems that include
income statements, balance sheets, and cash-fl ow statements.
the cash basis of recording to a framework of
accounts using the accrual basis of recording,
while maintaining a cash-fl ow statement (see
paragraphs 3.70–3.72); and the complete integra-
tion of fl ows and stock positions (see paragraphs
3.2–3.3).
- Th e GFSM 1986 framework has been extended
to include nonmonetary transactions, such as in-
kind and imputed transactions (see paragraphs
3.19–3.20), fl ows other than transactions (see
paragraphs 3.31–3.35), and a balance sheet (see
paragraphs 3.36–3.50).
4.7 In principle, the coverage of GFS encompasses
all institutional units that materially aff ect fi scal poli-
cies. Th erefore, two principal constructs are used for
which GFS should be compiled. Th e general govern-
ment sector captures those institutional units primar-
ily involved in nonmarket activities of government,
while the public corporations sector captures all the
activities of public corporations, including their mar-
ket and quasi-fi scal activities (see Chapter 2). Once an
institutional unit has been classifi ed to a sector, all its
fl ows and stock positions are recorded in that sector.
Th us, statistics for the general government sector as
well as for the public sector should be compiled. Th e
analytic framework described in this chapter can be
applied to both sectors, and their subsectors.
Components and Concepts of the Analytic Framework.
4.8 Th e core of the analytic framework is a set of
four fi nancial statements. Th ree of the statements can
be combined to show that all changes in stock posi-
tions result from fl ows (see Figure 4.1 and paragraph
3.4). Th ese are the:- Statement of Operations
- Statement of Other Economic Flows
- Balance Sheet.
In addition, the core framework includes a Statement
of Sources and Uses of Cash to provide key informa-
tion on liquidity.
4.9 Th e Statement of Operations is a summary of
the transactions of a sector or subsector in a given
reporting period. In essence, transactions represent
changes to stock positions that arise from mutually
agreed interactions between institutional units, such