GUS » in English

Apel o przysłanie misji sprawdzającej poprawność danych GUS

Warsaw, 18-11-2011
To The Eurostat

Instytut Ekonomiczny

Appeal: Fact- finding Eurostat mission should be organised to visit Polish Governmental Central Statistical Office

Opening quotes:

„I almost died when I had to pretend for 1 1/2 years […] as if we were governing. Instead, we lied in the morning, we lied in the evening. […] It was absolutely clear that what we were saying was not true… And all this time we have done nothing for four years. Nothing. […] No country in Europe has acted as brazenly as we did. […] The moment of truth will come swiftly. It was divine intervention, the abundance of cash in the world economy and hundreds of tricks { you obviously don’t need to know about } which helped us survive so far.”
– Hungarian Prime Minister Ferenc Gyurcsany in a leaked speech to his party’s MPs on 26 May,
2006. source [1]

„Our first order of business is transparency everywhere. We are recording the real situation in cooperation with the Bank of Greece. To put a final end to the obscurity of finances, the statistics service will become truly independent.”
– Greek Prime Minister George Papandreou’s speech in the Greek parliament, 16 October
2009. source [1]

Hereby we kindly inform on the lack of integrity in the statistical data presented by Polish governmental Central Statistical Office (Główny Urząd Statystyczny, GUS). We try to proove, that main indicators do not match the reality any longer. It is unclear if the data provided to the public is inaccurate due to bad methodologies of data collection, or is a subject of deliberate alterations.
1. General condition of Polish Central Statistical Office
Methodologies used by Polish Central Statistical Office differ qualitatively from other statistical offices in the CEEC-countries. American economist of Polish origin, Mr. Radosław Bodys (works at Bank of America/Merrill Lynch in London) criticised GUS, saying that this institution uses different metodology than the rest of the Eastern European Countries, and that its calculations are „questionable” when it comes to their economic and statistical integrity.
Polish Central Statistical Office is not independent from current political administration, it is a governmental office. Its head is directly subjected to the prime minister, which enables direct political pressure. Recently a corruption affair in Central Statistical Office broke out: managers at the office combined multiple forms of salaries, received also those that they should not.
2. State of demographic data
According to the governmental statistical service, Poland claims to have 38,186,860 inhabitants, as if no migration took place after the opening of EU markets for Polish workforce. 1.8 to 2.4 million Poles were reported in the popular daily press (see „It’s a bad time to be young and Polish”, The Guardian, 31.05.2011) to emigrate permanently or quasi- permanently from Poland. Exact data remains unresearched. Some cities, such as Zielona Góra in western Poland, circa 50 km (30 miles) away from German border, lost approximately 90 % of its young creative class. We estimate the population of the town to diminish from alleged 117 thousand to approx. 80 thousand inhabitants, lower figures (even 60 thousand) are also possible. Generational gaps appear, demographic changes are reflected in the patterns of microeconomic changes in local economy of the area. For example, number of cultural events organised privately (like clubbing parties) diminished to negligeable levels, aprrox. 70 % of venues operating 7 years ago, closed.
The methodology used by Central Statistical Office GUS to collect these data can be described as non scientific- data are provided by public autohorities and are not verified upon any context. New data from national census 2011 should be released soon, but already now questions are raised whether they will keep touch with reality.
Sources (in Polish)
Here are some comments form those working for Central Statistical Office GUS, to show the extent of manipulation, even those counting themselves misbelieved some data:
http://forum.gazeta.pl/forum/w,752,126774787,126778505,108_odmow_GUS_sam_falszuje_statystyki_.html
http://www.scribd.com/doc/53286036/spis-powszechny-gus-wlamanie (content archived from a blog that was removed from Internet probably due to dramatic flaws in private data protection that it revealed)
Some of the census offices had to cope with serious organisational and technical problems, which diminishes the reliability of the Census 2011 : http://samorzad.infor.pl/forum/22419,Dramaty-rachmistrza-spisowego.html
2. Economic indicators
General allegation of Liberal Institute is the observation that no proper public sector statistics is and was conducted. Depreciation of such crucial economic assets as infrastructure and public housing, is, to our knowledge, largely excluded from public statistics, due to many factors, also due to the archaic level of economic sciences in Poland. As we unofficially inquired, such data would first need to be counted into the current GDP calculus to obtain a more realistic picture of the state of economy.
We doubt that the data on decapitalisation of country’s energetic, rail, road networks were included, for the lack of such financial data, or for their doubtful content. Public housing, sector which was neglected in the last 20 years, causing large parts of a plethora of cities to turn into slum, was most likely ommited due to the fact that no data are collected here. Consumption of fixed capital is heavily distorted in Polish official statistical data. Polish (physical) capital stock is also in large parts exluded from any capital creation: it is dead capital as described by the famous peruvian economist Hermando de Soto.
Public sector constitutes still a very large part of Polish economic creation, and the ratio of public sector GDP share to GDP per capita is very high even in regional comparison. As for 2007 data, Poland was among such leaders of public sector spending like Sweden, France, Hungary (compare chart 1 in http://www.e-finanse.com/artykuly/124.pdf).
GDP
According to textbook knowledge, GDP does not consist of grey zone and other spheres of informal economic activity. However, in Poland methodology used seens to diverge from the textbook notion. Bohdan Wyżnikiewicz from polish quasi-non-governmental organisation „InBR”, closely tied to the ruling coalition and former head of the Central Statistical Office GUS, desribed that the Polish statistic service changed twice its method to estimate Polish GDP, in which it easied the constitutional threshold of debt to GDP ratio (according to which public debt cannot exceed 60 % of GDP). He also explained that in the early 90-ties of the 20.th century polish GUS started to add to the GDP „legal part” of the grey zone („hidden production”- added the polish government conrolled state press agency PAP). In the begginning of the last decade Polish Central Statistical Office introduced technical changes to the estimates of the size of the economy, which resulted in approx. 5 % GDP increase.(source: http://forsal.pl/artykuly/436524,gus_bedzie_zaliczal_szara_strefe_do_pkb_aby_poprawic_relacje_dlugu_do_pkb.html – an article where the former head of the Statistical Office is lobbying to include more of shadow zone of country’s economic activity in official economic indicators, against their textbook definitions)
Polish GDP calculation uses some reprting from companies employing more than 9 employees, but for the small- business (i.e. those employing less than 9 workers) data are „very roughly estimated” as explains Michał Zielinski, blogger (compare: http://www.wprost.pl/blogi/michal_zielinski/?B=752) Such pro-governmental economists claim that „economy is not a pharmacy, and it is not possible to measure it exactly”.
During the first dip of the recent financial crisis in Europe number of critics accused the government to distribute false economic data. Poland was the only country, apart from Greece, that indicated GDP increase. According to Rodosław Bodys, data on commercial investments increase do not match with data from companies, that were signaling rather reductions of investments. Radosław Bodrys, was astonished, how it is possicle, that, in time when economic contraction reached 10 % in Russia, 20 % in Ukraine, In Germany 7 % in Chech Republic 3 %,and in Poland the economy was increasing. Export was reduced by 15 %, industrial production went down by 10 % in first 3 months. Another case were investments, that according to Central Statistical Office wrere rising. According to Bodrys, companies starting from 3Q2008 were signaling reductions in investment expenditures.
Average salary
This Polish-language article describes differences in methodologies used (median value and artyhmetic average), what gives ca. 20 % divergence between various sources (official data and non-official). Warsaw area was the only one in Poland where the median salary was higher than the Polish average salary as declared by Central Statistical Office GUS.
http://praca.money.pl/wiadomosci/artykul/wzrost;plac;to;fikcja;dla;wiekszosci;polakow,128,0,541312.html?utm_source=wykop&utm_medium=referral&utm_campaign=wykop
Inflation
The basket of basic commodities published by GUS, Central Statistical Office, was recently reduced by the removal of costs of energy and rents. Its composition is quite doubtful: as a middle class, I buy large share of imported products that, due to depreciation of Polish currency rose by approx. 10- 15 %. 4 months ago, Warsaw public transport basic fares rose by approx. 50 %.
Polish metodology of inflation calculation is completely outdated, methodolically eroneous. It is not bound to the price of products, but to the shifting money supply of surveyed group. The more severe the situation, the more they subsitute quality products for cheaper brands, and, GUS is measuring mostly these changing tendences. They do not measure the spending patterns of young creative class that mostly relocated to larger agglommerations and therefore is largely not listed in goverment’s largely outdated registers of „permanent and temporary stay” that are also (and unfortunately) the source of official demographic data. Those more affluent avoid to give any data, and time-consuming  burden of over-complex, over-bureaucratic and excessive data collecting technology employed by GUS distracts many modern people from sharing data from their households.
Sources and criticism:
http://prawdomierz.onet.pl/static,forum.html?discId=11250741&threadId=87378803&discPage=6&AppID=385
Decription of the erroneous methodology used:
http://www.polityka.pl/rynek/gospodarka/234779,1,zycie-wedlug-gus.read
http://forum.gazeta.pl/forum/w,30,126189282,126190511,Tak_was_oszukuje_GUS_na_inflacji.html
http://mises.pl/wp-content/uploads/2008/07/jj_tajna-inflacja-komentarz-im1.pdf
http://www.wykop.pl/ramka/631773/gus-podaje-ze-zatrudnienie-wzroslo-potezna-manipulacja/
http://www.tvn24.pl/12692,1707696,0,1,inflacja-wystrzelila–bo-gus-inaczej-ja-liczy,wiadomosc.html
http://biznes.onet.pl/static,forum.html?discId=11013821&threadId=84646096&discPage=3&AppID=324 (comments of an Internaut who calkims the 1Q2011 inflation to reach 18 %)
http://biznes.onet.pl/static,forum.html?discId=4752291&threadId=42640028&page=1&AppID=324 (here: estimations that real inflation amounts to 12 %)
Criticism of government
Critics accuse government to finance its deficits by running inflation, extent of which is unresearched independently, but can be roughly estimated to vary from the official data significantly. Foreign companies deinvest, domestic companies run on losses that remain hidden to capitalists due to non- available data on real inflation. Polish Zloty depreciated sharply, which was not reflected in inflation data as calculated using current methodology.
Recommendations
We recommend, that Eurostat should mark the macroeconomic data provided by its Polish counterpart as „provisional” in its data base, as it is the case with Greek data. Especially the „estimated” part of GDP creation sholuld be closely observed, as well as the accounts of public sector, if they contain necessary write- downs for infrastructure deprectiation.
Unreported, unrecorded economic activity should be left out, if included. Accuracy of „stocks of inventories” positions in the GDP calculus from 2009 onwards should be closely looked upon. Interested parties should petition Mr. Olli Rehn, European Commission. He is the Commissioner responsible for economic and monetary affairs, and due to the new legislation an investigation into the methodologies used is possible. Pressure should be also made on Polish government to disclose more realistic data on demography and economy. Fact- finding Eurostat mission should be organised.
Literature and source for opening quotes
[1] “Do countries falsify economic data strategically? Some evidence that they do.”, Tomasz Michalski, Gilles Stoltz, HEC Paris Working Papers 930/2010
on-line: http://www.degit.ifw-kiel.de/papers/degit-xv-frankfurt-am-main-2010/c015_018.pdf

[2] Interesting quotes from official of QUANGO „InBR”:
„Bohdan Wyżnikiewicz powiedział, że polski urząd statystyczny dwa razy zmienił metodę szacowania PKB, czym „ulżył” tzw. konstytucyjnemu progowi ostrożnościowemu (zgodnie z nim dług publiczny nie może przekroczyć 60 proc. PKB – PAP). Wyjaśnił, że w latach 90. XX wieku GUS zaczął powiększać PKB o „legalną” część szarej strefy (produkcję ukrytą – PAP). Natomiast na początku obecnej dekady GUS wprowadził zmiany techniczne dotyczące szacunków wielkości gospodarki, co skutkowało podniesieniem PKB o ok. 5 proc.” (source: http://forsal.pl/artykuly/436524,gus_bedzie_zaliczal_szara_strefe_do_pkb_aby_poprawic_relacje_dlugu_do_pkb.html )

Further information
Interested readers should contact American economist of Polish origin, Mr. Radosław Bodys , he works at Bank of America/Merrill Lynch in London. He criticised recently GUS, saying that this institution uses completely different metodology than the rest of the Eastern European Countries, and that its calculations are „questionable” when it comes to their economic and statistical integrity.

Prepared by:
Adam Fularz, research fellow, Instytut Ekonomiczny Warszawa, tel. + 48 604 44 36 23
http://www.instytut.zielonogorska.pl/

By