Zero Equilibrium's Review of “New Standards for Economic Data Aim to Sharpen View of Global Economy” (by Vladimir Klyuev and James Tebrake for the IMF)

By Chinedu Okoye 

 

In the paper New Standards for Economic Data Aim to Sharpen View of Global Economy , , Vladimir Klyuev and James Tebrake discuss a new stated for calculating national accounts by leveraging or employing new technologies.we give a breakdown and make commentary in bracketed  italics. 

Said updated system of national accounts, “better captures digitalization, intangible assets, and global production—helping governments support growth, jobs, and investment”, [by given a more accurate picture of economic activity, which help better inform decisions]

They highlighted that “technology as we know it, smartphones, AI/other intelligence tools etc, did not exist in 2008 “the last time the world’s statistical community overhauled its approach to standardizing how countries measure the economy”..

These new tools referred to as “the global standard for producing measures of economic activity—more fully incorporates emerging technologies, digital services, and intangible assets”

 

[This gives a clearer indication on the true volume of investments, which determines values of overall output. A more comprehensive insight on the state of the global economy]

This marks “the sixth iteration in the almost nine-decade history of the System of National Accounts (SNA), a global standard for national metrics including production, income, consumption, capital investment and financial activities, as well as national wealth.”

The SNA update was reported as “a global effort coordinated by the International Monetary Fund, United Nations, World Bank, European Commission, and Organisation for Economic Co-operation and Development.”

 

Why Digitalise?

The IMF contributed significantly in areas such as; digitalization, trade, government finances, and financial innovation. It's objective is to ensure governments have the necessary tools to “make more informed decisions about how to grow their economies, create jobs, and respond to shocks”

For ”If it [measurement of economic activity] doesn’t keep up [with the pace of changes economic structures and industrial trends] central banks and finance ministries will end up setting monetary or fiscal policy based on incomplete, outdated, or inaccurate information.”

This is understandable as [data-deiven] poicies are only as effective as the data is accurate. And there has been some exclusion of certain economic activities based on the old system of national accounts

Crypto Exclusion:

 Crypto segment is one such area that has been neglected by the prior model, “because it doesn’t involve the creation of goods or services in the traditional sense, it isn’t counted in gross domestic product.”

Capital gains from crypto not being included in GDP calculations greatly under reports output growth.

 “While it may account for a relatively small share of global assets, it could have significant implications for future financial stability, tax policy, and regulatory oversight”. However, “statisticians have found a way to classify certain crypto assets as “non-produced nonfinancial assets,” and these are reflected in national wealth.

This is as, notwithstanding the scale of usage and level of penetration, the subsector carries production costs and can be sold for revenue. So it is possible to draw up an income statement seen as a revenue, cost of goods sold and [capital gains] tax(es) exists and/or can be derived.

The chart below shows Bitcoin electricity use, which is more than Argentina, an obvious mining [production] cost, and yet it isn't currently counted as part of the overall economic activity or output.

Other Excluded Economic Segments:

Crypto is just one neglected segment with a need for indicators that enable inclusion, Vladimir and James further wrote that the "the SNA recommends that countries develop a suite of indicators covering areas such as AI, cloud computing, digital intermediation platforms, and e-commerce”.

"As financial innovation accelerates and non-bank financial institutions play a larger role, [in the digital space mentioned above] these risks can become more complex". And therer are, more financial institutions are gaining exposure in the digital assets space m, be it crypto, AI, cloud computing digital intermediation etc.

For this reason, “the updated SNA calls for more detailed breakdowns of financial assets and liabilities, by both instrument type and institutional subsector."

 

Accounting for Natural Resource Depletion:

"The updated framework also gives greater visibility to net domestic product, or NDP, as a complement to GDP to better reflect sustainability” for it subtracts depreciation of fixed capital as well as depletion of natural resources, both of which are currently not captured in GDP calculations.

Meaning some segments of the economy cold be overstated as others are understated in the former models.

Valdmir and James wrote that “subtracting the depletion of nonrenewable natural resources will have a relatively small impact on NDP in most countries”

 

Challenging but Worth It:

However, Vladimir Klyuev and James Tebrake are under no illusions, as they understand the hurdles in enacting this change.

1. The uneven spread of technological prowess amongst and growth of these sectors countries,
2. An insufficient level – or lack of– technological know-how in certain countries
3. An absence of a standardized framework, to the failures of the [initial] implementation and series of updates.
4. The economy seems to grow faster than our ability to be improve upon calculating systems.

 

Challenges, Opportunities and Broader Implications:

As challenging as this changes are, “they are critical to ensure that economic data remains reliable in a rapidly changing world”. Therefore is “important for policymakers to provide national statistical institutions with the resources needed to implement the new standards”

[On the flip side, this also creates an opportunity as private sector entities and/or individuals with sufficient skills will naturally be contracted or employed.

Beyond planning, the updated System of National Accounts (SNA) could lead to the repricing of natural resources, particularly if actual depletion rates are more than previously assume, putting upward pressure on the prices of non-renewable resources.

In resource-rich Sub-Saharan African countries, this revision could also impact fiscal balances. For where natural resources are found to be depleting faster than accounted for, it may translate to reduced future revenues, thereby straining government budgets and long-term fiscal sustainability.]

Quotes reference:

- Vladimir Klyuev and James Tebrake. New Standards for Economic Data Aim to Sharpen View of Global Economy. IMF Blog: https://www.imf.org/en/Blogs/Articles/2025/07/31/new-standards-for-economic-data-aim-to-sharpen-view-of-global-economy?cmid=fb2a2dca-e91d-4584-9f5c-8f0462faefb2