Accuracy and reliability

Overall accuracy

The compilation of the balance of payment is mainly based on other statistics. Accordingly, the accuracy of the balance of payments statistics is very much dependent upon these statistics. Most importantly, there will be uncertainty associated with the first compilations of a given period, as some of the relevant information will not be available until later.

Coverage is high, as there is a particular focus on coverage in the largest sources, ITGS and ITSS. The biggest source of error is measurement errors in the data sources that are survey-based.

Ongoing validations are performed and therefore, the accuracy of the first publications can be lower than the latest, as it takes time to correct the data which may have been identified as erroneous in the validations. The calculations and model assumptions in the compilation are not considered to affect the overall accuracy of the main items in the balance of payments.

The most important data sources for the balance of payments are based on monthly data so sudden changes in activity, such as due to the COVID-19 situation in the spring of 2020, are captured in these sources. For investment income, the geographical distribution of interest and dividends from portfolio investments is affected by the fact that securities are largely deposited in Euroclear and Clearstream, which are domiciled in Belgium and Luxembourg, respectively. This means that these two countries are overestimated as holding countries.

Sampling error

Not relevant.

Non-sampling error

5.3 Non- sampling errors (s13.3): Since the balance of payments is based on other statistics, the uncertainties associated with these statistics will also apply to the balance of payments. In addition, some smaller data sources have insufficient coverage due to missing data. This is the case for personal transfers to and from abroad.

For the International Trade in Services Statistics, the basis for the population is updated every five years, which means that there is increased uncertainty, especially towards the end of the five-year period, regarding whether the population is accurately defined. From the survey year 2019, the method for updating the population for International Trade in Services has been changed to a rolling annual update, which is expected to increase the precision of the population.

The increasing globalisation, including the international splitting of value chains by production companies, has resulted in lower coverage, particularly for the largest companies' production abroad. For this reason, a unit in Statistics Denmark has been established. This unit specifically looks at the coherence of the data that the larges Danish companies report across different statistics and surveys. This work often extends over a long period and can therefore lead to significant revisions in data back in time.

From the third quarter of 2019, the returns related to investment income from portfolio investments paid to abroad are not distributed by country in StatBank Denmark, as this information is not available in the source used to compile portfolio payments to abroad. Work is being carried out internationally on a solution to allocate portfolio payments geographically.

Furthermore, the balance of payments inherits the coverage errors that may exist in the sources, particularly relevant for the major data sources like the statistics on International Trade in Goods and International Trade in Services. See the statistical documentation for International Trade in Services and International Trade in Goods.

Quality management

Statistics Denmark follows the recommendations on organisation and management of quality given in the Code of Practice for European Statistics (CoP) and the implementation guidelines given in the Quality Assurance Framework of the European Statistical System (QAF). A Working Group on Quality and a central quality assurance function have been established to continuously carry through control of products and processes.

Quality assurance

Statistics Denmark follows the principles in the Code of Practice for European Statistics (CoP) and uses the Quality Assurance Framework of the European Statistical System (QAF) for the implementation of the principles. This involves continuous decentralized and central control of products and processes based on documentation following international standards. The central quality assurance function reports to the Working Group on Quality. Reports include suggestions for improvement that are assessed, decided and subsequently implemented.

Quality assessment

Compared to the balance of payments in other countries comparable in size and development, the Danish balance of payments is considered to be of good quality. The EU's annual quality assessment concludes that the quality of the statistics meets the EU requirements.

Data revision - policy

Statistics Denmark revises published figures in accordance with the Revision Policy for Statistics Denmark. The common procedures and principles of the Revision Policy are for some statistics supplemented by a specific revision practice.

Data revision practice

After the first publication of the balance of payments, it is continuously revised, as supplementary or adjusted statistical material becomes available. For investment income from direct investments, the preliminary estimates are replaced by reported data up to 22 months after the end of the reference period and are therefore, associated with greater uncertainty than the other data.

The balance of payments data are published in June of the year following the end of the reference period. It is standard practice that, at the beginning of June, the months of the previous years are finalized (locked). At the same time, the months of the year before the reference year are revised and locked again. This latter year is internally revised in June to be included in the final calculations of the national accounts. This year thus becomes final in the balance of payments the following June.

Historically, there have been particularly large revisions in international trade in services due to the updating of the population basis in 2009, 2014, and 2019. From the survey year 2019, the transition from a five-year to an annual update has begun. The new method limits the revisions resulting from uncertainty about the population.