Definitions

Annexes

Definitions

Carry-trade: Carry-trade speculation is a strategy whereby an investor sells a currency that yields a relatively low interest rate (i.e. the so-called "funding currency") and uses those funds to purchase short-term assets denominated in a different currency that yields a higher interest rate.
Commodities: Commodities include food products, agricultural raw materials, minerals, ores and metals, and petroleum.
Commodity derivatives: Commodity derivatives include futures and options contracts traded on organized exchanges, as well as forward, options and swaps contracts traded on OTC markets. A derivative is a financial asset, generally a contract between two or more parties, whose value is dependent upon or derived from one or more underlying assets, such as a commodity futures contract or a commodity index.
Competitiveness: Competitiveness is a measure of a country's advantage or disadvantage in selling its products in international markets. Different measures of competitiveness can be calculated based on the differential between domestic and competitors' unit labour costs in manufacturing and consumer prices both expressed in a common currency. Unit labour cost stands for labour cost per unit of output.
Contribution of a component (net exports, domestic demand etc.) to GDP growth: Contribution of a component (net exports, domestic demand etc.) to GDP growth is usually calculated as the real growth rate of this component weighted by the share of this component in the GDP in the previous period. Thus, contributions reflect two effects: the speed with which a component changes and the relative importance of the component in total GDP.
Current account: Current account includes all the transactions recorded in the balance of payments (other than those in financial items) that involve economic values and occur between resident and non- residents entities. Specifically, the major classifications are: goods and services; income and current transfers.
Debt relief: Debt relief is any form of debt reorganisation which relieves the overall burden of debt.
Emerging Market Economies (EMEs): Emerging Market Economies (EMEs) include include Argentina, Brazil, Chile, Malaysia, Mexico, Peru, the Republic of Korea, Singapore, Taiwan Province of China and Thailand.
Employment: Employment should include full- and part-time employees on the payroll, but not contract and temporary employees. Ideally, figures for part-time employees should be reported on a full-time equivalent basis.
Exports: Exports of merchandise are goods leaving the statistical territory of a country. It is recommended that merchandise exports be reported f.o.b. (free on board) i.e. not included transportation costs and insurance charges between the customs frontier of the exporting country and that of the importing country.
Fiscal balance: Fiscal balance is the balance of a government's tax revenues, plus any proceeds from asset sales, minus government spending. If the balance is positive the government has a fiscal surplus, if negative a fiscal deficit.
Foreign direct investment (FDI): Foreign direct investment (FDI) is investment involving a long-term relationship and lasting interest in and control by a resident entity in one economy in an enterprise resident in another economy. In FDI, the investor exerts significant influence on the management of the enterprise resident in the other economy. The ownership level required in order for a direct investment to exist is 10% of the voting shares. Such investment involves both the initial transaction between the two entities and all subsequent transactions between them and among foreign affiliates, both incorporated and unincorporated. FDI may be undertaken by individuals or by business.
G20: The Group of Twenty is a forum for international cooperation between the world's major advanced and emerging economies (19 countries members plus the European Union) on the most important aspects of the international economic and financial agenda.
G8: The Group of eight countries includes Canada, France, Germany, Italy, Japan, the Russian Federation, the United Kingdom, and the United States
Greenhouse gases (GHG): Greenhouse gases (GHG) refer to carbon dioxide, nitrous oxide, methane, ozone and chloro—fluorocarbons occurring naturally and resulting from human (production and consumption) activities, and contributing to the greenhouse effect (global warming).
Gross domestic product (GDP) per capita: Gross domestic product (GDP) per capita is gross domestic product divided by population.
Gross domestic product (GDP): Gross domestic product (GDP) is an aggregate measure of production equal to the sum of the gross value added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies on products not included in the value of their outputs). It is the sum of the final uses of goods and services (all uses except intermediate consumption) measured in purchasers' prices, less the value of imports of goods and services, or the sum of primary incomes distributed by resident producer units.
Gross national income (GNI): Gross national income (GNI) is gross domestic product (GDP) less net taxes on production and imports, less compensation of employees and property income payable to the rest of the world plus the corresponding items receivable from the rest of the world. In other words, GNI is GDP less primary incomes payable to non-resident units plus primary incomes receivable from non-resident units.
HIPC Initiative: The HIPC Initiative was launched by the World Bank and the International Monetary Fund in 1996 to coordinate and harmonize official debt relief by the multilateral financial institutions and bilateral creditors for heavily indebted poor countries (HIPC).The HIPC initiative constituted a radical departure from previous initiatives because it included cancellation of debt owed to multilateral institutions, a first in the history of debt relief. At the G7 meeting held in Cologne, Germany, in the fall of 1999, donors and multilaterals agreed that debt relief was moving slowly and decided on a major expansion of the HIPC initiative. The enhanced HIPC initiative more than doubled the amount of debt relief provided under the original HIPC, reduced the debt ratios that qualified a country's debt as unsustainable, and adopted procedures for faster and easier debt relief.
Imports: Imports of merchandise are goods that add to a country's stock of material resources by entering its statistical territory. It is recommended that merchandise imports be reported c.i.f. (cost, insurance and freight) i.e. at the price of merchandise delivered at the frontier of the importing country, including any insurance and freight charges incurred up to that point.
Income: Total income refers to regular receipts by individuals and/or household,s such as wages and salaries, income from self-employment, interest and dividends from invested funds, pensions or other benefits from social insurance and other current transfers receivable.
Inflation: Inflation is the loss of purchasing power of currency, expressed through a general and lasting increase in prices. It must be distinguished from the increase in the cost of living. Most of the time, the rate of inflation is evaluated with the consumer price index. This measurement is not complete since the inflationary phenomenon covers a field wider than household consumption.
Instability: Instability is measured as the percentage deviation of the prices from their exponential trend levels for the period.
Interest rate: Interest rate is the cost or price of borrowing, or the gain from lending, normally expressed as an annual percentage amount.
International merchandise trade: International merchandise trade includes goods which add or subtract from the stock of material resources of a country by entering (imports) or leaving (exports) its economic territory.
Least developed countries (LDCs): Least developed countries (LDCs) are identified on the basis of low income, human assets and economic vulnerability. In the 2009 triennial review by the United Nations, the criteria were: (a) low income, based on a three-year average estimate of the gross national income per capita (eligibility for addition to the list: under $905; qualification for graduation from LDC status: above $1,086); (b) human assets, involving a composite Human Assets Index (HAI); and (c), involving a composite Economic Vulnerability Index (EVI).
Migrant: A migrant is a person who comes to an economy and stays, or is expected to stay, for a year or more.
Migrant remittances: Migrant remittances cover current transfers by migrants: workers' remittances, compensation of employees and migrants' transfers.
Millennium Development Goals (MDGs): The Millennium Development Goals (MDGs) are eight international development goals that all United Nations Member States and many international organizations have agreed to achieve by the year 2015. The goals are eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality and empowering women, reducing child mortality rates, improving maternal health, combating HIV/AIDS, malaria, and other diseases, ensuring environmental sustainability, and developing a global partnership for development. Each of the eight goals has specific stated time-bound targets to be met.
Multilateral Debt Relief Initiative (MDRI): Multilateral Debt Relief Initiative (MDRI) was launched at the July 2005 G8 summit held in Gleneagles, Scotland. MDRI implies the cancellation of all the debt owed to the IMF, the International Development Association, and the African Development Fund by all countries that reached or will reach the completion point of the HIPC initiative. Unlike the HIPC initiative, the MDRI does not propose any contemporaneous debt relief by other creditors beyond the IMF, IDA, and AfDF.
Nominal exchanges rate: Nominal exchanges rate is the price of one currency in terms of another.
Official development assistance (ODA): Official development assistance (ODA) as reported by the OECD, includes concessional loans (with a grant element of at least 25%) and grants by members of the OECD Development Assistance Committee. The main objective of such aid is to promote the economic development of developing countries (official development assistance) or of countries in Central and Eastern Europe (official aid).
Other investment: Other investment flows is a residual category that includes all financial transactions not covered under direct investment, portfolio investment or reserve assets.
Output gap: Output gap refers to the difference between actual and potential gross domestic product (GDP) as a per cent of potential GDP.
Portfolio investment: Portfolio investment flows cover equity and debt securities, such as bonds, notes, money market instruments and financial derivatives (options etc.).
Prevalence of undernourishment: The FAO measure of food deprivation, which is referred to as the Prevalence of undernourishment, is based on a comparison of usual food consumption expressed in terms of dietary energy (kcal) with certain energy requirement norms. The part of the population with food consumption below the energy requirement norm is considered undernourished ("underfed").
Private capital flows: Private capital flows cover direct investment, portfolio investment and other investment.
Public debt: Public debt are the external obligations of the government and public sector agencies.
Purchasing power parity (PPP): Purchasing power parity (PPP) is the rate of currency conversion that equalizes the purchasing power of different currencies by eliminating the differences in price levels between countries. In its simplest form, PPP is simply price relatives which show the ratio of the prices in national currencies of the same good or service in different countries.
Real effective exchange rates (REERs): Real effective exchange rates (REERs) take account of price level differences between trading partners. Movements in real effective exchange rates provide an indication of the evolution of a country's aggregate external price competitiveness.
Real interest rate: Real interest rate is nominal interest rate compensated for inflation.
Reserves: Reserves consist of those external assets that are readily available to and controlled by a country's authorities for direct financing of international payments imbalances, for indirect regulation of the magnitude of such imbalances through intervention in foreign exchange markets to affect their currency's exchange rate, and for other purposes. The category of reserve assets comprises monetary gold, special drawing rights (SDRs), reserve position in the IMF, foreign exchange assets (consisting of currency, and deposits and securities), and other claims.
Terms of trade: Terms of trade or "net barter" terms of trade are defined as the ratio of the export unit value index to the import unit value index. Export and import unit value indices reflect changes in price levels of exports and imports during the reporting period in comparison with the base period.
Unemployment: Unemployment exits when a person above a specified age who during the reference period were without work, that is, were not in paid employment or self employment; currently available for work; and seeking work, that is, had taken specific steps in a specified recent period to seek paid employment or self-employment. The specific steps may include registration at a public or private employment exchange; application to employers; checking at worksites, farms, factory gates, market or other assembly places; placing or answering newspaper advertisements; seeking assistance of friends or relatives; looking for land, building, machinery or equipment to establish own enterprise; arranging for financial resources; applying for permits and licences, etc.
Underemployment: Underemployment exists when a person's employment is inadequate in relation to specified norms of alternative employment, account being taken of his or her occupational skill.
Volume: Reference to Volume disregards changes in prices and exchange rates. Volume movements are determined by holding the price constant.
Wages: Wages and salaries are defined as "the total remuneration, in cash or in kind, payable to all persons counted on the payroll (including home workers), in return for work done during the accounting period" regardless of whether it is paid on the basis of working time, output or piecework and whether it is paid regularly or not.