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Spanish Government Manipulating Economic Statistics by Bridget Ryder

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Spanish Government Manipulating Economic Statistics

Control the statics, and it’s possible to control the narrative, control public opinion. This seems to be the strategy of Spain’s current government led by socialist Pedro Sánchez. 

Amid rumours of governmental manoeuvres to replace him, Juan Rodríguez Poo, the president of the country’s independently functioning statistical agency, the National Institute of Statistics (INE), has resigned. Since the economic downturn caused by the pandemic, the war in Ukraine, and galloping inflation, the government has increasingly questioned the economic reports crunched out by the INE, particularly its evaluation of the GDP and inflation. Both the Ministry of Economic Affairs and the Treasury have started presenting their own economic statistics produced within their ministries, and which are always more favourable than those published by the INE. 

Spanish media reported Poo’s resignation on June 26th after he sent an internal message to his colleagues announcing he was stepping down. This forced the government to make the official announcement that Poo had resigned for “personal reasons.” 

But the country’s top statisticians were not convinced.

The Association of Higher State Statisticians (AESE) released a statement directly criticising the Ministry of Economic Affairs for interfering in the INE’s functioning. 

The statement charged that Poo’s resignation “could be interpreted by society as an attack on the independence of the institute, motivated by the fact that the figures published by the INE of some relevant statistics are not in tune with the government’s economic forecasts.”

“What seems like an unprecedented novelty is that, from the government itself, and in particular from the Ministry of Economic Affairs and Digital Transformation, the INE statistics figure as relevant as the CPI or GDP are questioned,” the statement also read.

While the INE showed a Spanish economy that started to slow at the end of 2021 after a substantial, but lower than expected, recovery from the COVID-19 pandemic, the government has maintained that the recovery continues at a substantial rate. 

To make the government’s case, First Vice President for Economic Affairs Nadia Calviño has clung to a new daily activity indicator produced by her team—one that is not present in the National Statistical Plan—to question the data on Gross Domestic Product (GDP) and the Consumer Price Index (CPI) that the institute periodically provides. While the INE showed a weaker economic recovery than Calviño had expected, her ministry’s statistics painted a more optimistic picture.

“The daily activity indicator recovered its pre-COVID level in November, also maintaining its dynamism during the fourth quarter,” the minister highlighted in December, as reported by Voz Populi.

The Treasury has added its own indicators as well, called the Weekly Daily Sales Report, defined as an “advance thermometer of economic activity” prepared by the Tax Agency (AEAT) based on VAT invoicing data going back to July 2017. In 2021, this indicator came out with numbers even better than pre-pandemic days, while the traditional Sales, Employment and Wages of Large Companies report submitted by the INE did not, leading the INE to lower economic forecasts. Voz Populi reports that the Tax Agency stopped providing the INE with advance data on Sales, Employment and Salaries of large companies and SMEs for the GDP after the downward revision of 1.7 points in the second quarter of 2021.

Spanish media are also reporting that Poo’s replacement is expected to be Israel Arroyo, the current number two in the Ministry of Inclusion, Social Security, and Migration.

This move against the INE follows on the heels of a resounding defeat of Sanchez’s party, the Partido Socialista Obrero Español (PSOE) in regional elections in their former stronghold of Andalusia on June 19th. It also intensifies a pattern of the current government to control, or attempt to control, independent institutions, including the Centre for Sociological Studies, which predicts election results, the constitutional court, and the defence and technology company Indra, in which the Spanish government is a major investor. 

Sanchez hopes to keep his increasingly weakened government in place to the end of 2023 to not only see the legislative term through but to also preside over the European Union when Spain is up for the presidency in the second half of 2023. 

But it might take a little nudging of public opinion to do it.

Bridget Ryder is Spain-based writer. She has written on politics, environment, and culture for American and international publications. She holds degrees in Spanish and Catholic Studies.