Battle of statistical interpretation goes on

The battle over the interpretation of statistics continued on Saturday afternoon with the government issuing a fresh statement to say how the Opposition “once again got it all wrong”, was “mixing up basic facts” and reflecting “low analytical levels”.

On Friday the two sides resumed their endless tit-for-tat on financial statistics, both giving their version of what the Eurostat had to say on Malta’s national debt.

Compared with the second quarter of 2014 across the euro area, Malta experienced the second highest decrease in the government debt to GDP ratio during the third quarter. The decrease registered, Eurostat reports, was of -2.7 percentage points.

But while the Labour government was happy to point out that the debt for July-September 2014 decreased by €135 million from the previous quarter, the PN opposition warned that debt increased by €220 million over the same quarter in 2013.

“While the government boasts of having knocked off the percentage points, it does not say that the global amount of debt has increased. The percentage point decrease is the result of greater economic growth, which is not coming from the private sector but from government itself, which in the past 20 months employed over 4,500 in the public sector.”

The PN said that overall debt is that GDP increased by 3% thanks to a statistical revision.

According to the government, the opposition missed the statistical revision by Eurostat that included a revision in the GDP levels for all periods and countries. “In other words, the revision had absolutely nothing to do with the change in national debt as a percentage of GDP between the second and third quarters of 2014,” the government said.

It also denied the PN’s argument that national wealth had improved due to government spending: “If it were true that the expenditure was exaggerated, this would be reflected in an increase in national debt. Each increased euro in expenditure is an increased euro in debt. This means that even if expenditure increases national wealth, this would have increased the national debt by the same amount and the percentage remains the same.”

The government said the Opposition had missed “yet another point” as to why national debt was measured as percentage of GDP by the Eurostat and the International Monetary Fund: what counts is not the total amount of debt but how this debt compares with the money that comes in to refund this debt.

In a political dig, the government said it was ironic that the PN was debating the burden of national debt when this debt had increased from 60% to 71% of GDP under the previous administration.