P. Nicholl: The Poor Quality of Official Statistics in BH Doing Substantial Damages to the Country's Economic Prospects

The Governor of the Central Bank of BH (CBBH) Peter Nicholl warned that the poor quality of official statistics in BiH is creating athe negative image of BH and doing substantially damageing to the country's economic prospects.

Governor Nicholl stressed that little progress has been made for many years in improving the quality of official statistics produced in the various statistical offices, such as on gross domestic product, prices, production, employment and unemployment. The present statistics in these fields paint a very negative picture and the economic situation in BH is better than the one pictured by the official BH statistics.

BH's politicians and citizens often complain that the perceptions of BH by people outside the country are much more negative than the reality in BiH and do not give enough credit for the substantial economic progress made in many areas since the war.

"I agree with those complaints. But in the case of the economy, this poor perception is created by ourselves because of the inadequacy of many official statistics", Governor Nicholl said.

While most neighboring countries have done so, statisticians in BH have not adapted their methodologies to the changes in the BiH economy or to the international standards. As a consequence, GDP per capita in BiH as measured in official statistics is now the lowest in the region, unemployment is the highest in the region, and foreign direct investment is decreasing - this is the picture 'official' BiH statistics paint of BiH.

"In all these cases, I believe the 'official' statistics to be wrong by a substantial big margin. We know, for example, that there is a large "grey economy" in BH, and this is excluded from the official statistics. When some modest allowance is made for what is excluded from official GDP statistics, we arrive at a GDP estimate over 37% higher than the official figure (see CBBH website). Information derived from another source (living standards measurement survey) suggests that unemployment as defined by the International Labor Organization is less than half the official figure. A central bank census of foreign investment shows that foreign direct investment in banks is 50% greater than official statistics indicate. And so on.

It is disappointing that, faced with this significant problem, there remain few if any credible official statistics published by the BH statistical agency and that the 2002 Law on Statistics remains to be implemented. The Governor urged that immediate attention be given to improving BH official statistics, so leading to more realistic data on the BH economic situation.