By Carlos Sánchez-Muñoz and Joji Ishikawa
The Balance of Payments (BOP) is a statistical statement that summarizes all cross-border transactions of (residents in) a country vis-à-vis the rest of the world, including trade in goods and services as well as income and financial transactions. In tandem with the BOP, many countries also compile the International Investment Position (IIP) that shows the external financial assets and liabilities of a country vis-à-vis the rest of the world.
In a globalized world, BOP and IIP are essential for economic analysis, forecasting, policy making, and investment decisions. The rich information provided by these statistics helps governments, corporations, and individuals make effective policy and investment decisions.
For many years now, Malaysia and the International Monetary Fund have been collaborating on the collection and analysis of these important statistics. Malaysia compiles external sector statistics according to the IMF’s Balance of Payments and International Investment Position Manual.1 These statistics are disseminated in Malaysia and submitted to the IMF for re-dissemination on the IMF’s Balance of Payments Portal so that the data can be used by analysts and policy makers all over the world.2
Malaysia also reports to the IMF other cross-border statistics by partner country, such as the IMF’s Coordinated Direct Investment Survey3 and the Coordinated Portfolio Investment Survey.4 The reported data are available on the IMF’s website along with similar data reported by other countries, providing crucial information on global interconnectedness through direct and portfolio investments.
Malaysia also participates in the IMF’s Committee on Balance of Payments Statistics (https://www.imf.org/external/bopage/bopindex.htm), which advises the IMF to set international methodological standards for the compilation of external sector statistics. The committee also fosters greater international cooperation in addressing data collection and compilation issues, in closing data gaps on financial interconnectedness and in reducing bilateral and global asymmetries.
Malaysia’s cooperation in providing these vital statistics greatly supports the IMF’s provision of policy advice to its 189 member countries.
Carlos Sánchez-Muñoz and Joji Ishikawa are Assistant Director and Senior Economist of the Balance of Payments Division, Statistics Department, International Monetary Fund, respectively. The views expressed herein are those of the authors and should not be attributed to the IMF, its Executive Board, or its management.
