Why do official statistics get revised, and can governments bend them?
Greece's 2009 deficit was first forecast at 6 to 8 percent of GDP, and the final figure was 15.4.
▶ Start the storyOfficial statistics are built from many pieces of data, so they can be corrected, and sometimes the correction is a scandal. National accounts draw on surveys, administrative and census data and regulatory data, which are integrated and harmonised. That is why a first estimate can change. But two famous cases show a different kind of revision: numbers that were wrong because someone wanted them to be.
Greece first. Greek governments had underreported the country's debt and deficit. In 2009 the new government of George Papandreou revised the 2009 deficit forecast from 6 to 8 percent of GDP to 12.7 percent, and after 's standardised method the final value was 15.4 percent. Among the techniques was a that converted billions of Greek debts into yen and dollars at a fictitious exchange rate, hiding the true extent of the loans. Eurostat had noted reservations about Greek fiscal data in five assessments between 2005 and 2009. With the appearance of impropriety, market interest rates on Greek debt rose dramatically in early 2010.
Greece's 2009 deficit, as a share of GDP
% of GDP
| 2009 deficit | |
|---|---|
| Early forecast (upper end) | 8 % of GDP |
| Revised by new government | 12.7 % of GDP |
| Final, Eurostat method | 15.4 % of GDP |
Argentina is the second. Under the Kirchner presidencies, the statistics institute INDEC was subject to strong political pressure, and its statistics were not considered trustworthy. The official figure for January 2007 was 1.1%, while the director of consumer prices is reported to have calculated almost 2.0% from internal data. Private economists and provincial statistical offices showed inflation two to three times higher, and unions used their estimates in pay talks.
Both stories ended the same way: outside checks. audited Greece, and in 2013 the IMF censured Argentina.
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Recap
Outside checks, from auditors, independent estimates and even satellite lights, are what expose statistics that have been bent.
💡 A trick to remember it · A number only one person controls needs a second pair of eyes, and the eyes can be an auditor, a rival economist or a satellite.
Surprising fact · Greece's final 2009 deficit was 15.4% of GDP against an original forecast of 6 to 8 percent.
Sources (4)
No source, no claim. Every fact in this lesson (16 claims) cites at least one of these.