This is a busy time for the Finance Ministry as it gears up for the presentation, next month, of the financial estimates, its first Budget since the general election in March this year. Besides the pre-Budget document, and the recent documents presented to the European Commission, it has also just published its draft budgetary plan, scaling downwards the amount it plans to raise in indirect taxes.
Probably the last thing the Finance Minister needed in the midst of all this work was to get into a tiff with the National Statistics Office over the way it reported inflation.
As it happened, however, just a day after the minister made his views on this known to all and sundry, when he addressed a meeting of the Malta Council for Economic and Social Development, he called on the Malta Statistics Authority to investigate what might have led to an error in the calculation of the gross domestic product for the second quarter.
The statistics office has done well over the years but these two “incidents” may well now throw some bad light on it at a time when this could be most undesirable in view of the ever-increasing demand for statistical information.
The NSO does not deserve to have its credibility tainted in any way on the basis of just these two incidents. The office produces a profusion of statistics and errors do occur, particularly if it is not as sufficiently manned as it needs to be able to cope with the workload. The minister may have good reason why he had to officially ask for an investigation into the wrong calculation of the GDP but care would need to be taken not to damage an institution that has been doing well and been of good service to the community.
The office has stuck to its mission “to produce efficiently and with minimum burden on respondents high-quality statistics that are relevant, reliable and comparable and to disseminate them in an impartial, independent and timely manner, making them available simultaneously to all users”.
The minister called for the investigation after the office reported that the post-production validation and checking process had identified a compilation error that had a significant effect on the gross domestic product figure for the second quarter this year.
The GDP growth was given at 1.7 per cent when, on recalculation, it stood at 3.6 per cent.
The error is quite hefty but the office corrected it immediately and informed the EU statistical agency accordingly. The investigation called for by the minister may well serve a good purpose to the NSO for, in requesting a “detailed report’ about the error, he also expects recommendations for the further strengthening of the institution.
Logically speaking, this ought to mean that if, for example, the office is found to be lacking resources, human or otherwise, action should be taken to correct the situation.
Regarding the way the office is reporting inflation, the minister feels this is wrong and that it is contributing to what he called “ongoing misinformation” about the economy. Feeling “irritated” at this, he said he felt he could not understand why the NSO reported the moving inflation average as this was not the right way to do it. Others disagreed but it would seem that, in this case, the ministry could have cleared this up directly with the office or the authority.
All in all, however, the NSO’s record speaks for itself.