Prof. Josef BonniciCentral Bank governor Josef Bonnici has spoken of “statistical fuzziness” as he questions whether official figures are painting a true picture of the economy.
Official figures released on Friday by the National Statistics Office showed the economy entered into recession in the first three months of the year.
“Technically we are in a recession but I am concerned about a particular set of figures in the statistics that are significantly giving a negative contribution and have been doing so for three successive quarters,” Prof. Bonnici said.
The figures in question concern changes in inventories, an item composed of two elements: the build-up of stocks and statistical discrepancies between the different methods used to calculate GDP.
Prof. Bonnici said the extent of statistical discrepancies was unknown.
“It warrants a detailed explanation because the situation could be different from what appears at first sight.”
Changes in inventories contributed to almost a negative six per cent of GDP in the first three months of the year.
“This is a significant contribution,” Prof. Bonnici said, pointing out that in contrast, changes in inventories contributed a positive 2.7 per cent to GDP in the same quarter last year.
He said it would help to split the build-up of stock from the statistical discrepancies but this would probably expose “a technical limitation of the present approach to calculating GDP”. Prof. Bonnici added that further investment in the statistical data collected, including more detailed surveys, was needed to achieve a more accurate reading.
“This would be money well spent if it helps us get a clearer picture of reality which is not subject to the same extent of statistical fuzziness.”
The Central Bank is studying the statistics and will seek further clarification from the NSO on the significance of the statistical discrepancy included in the figures.
ksansone@timesofmalta.com