There has been an error in the calculation of South Africa’s consumer inflation figures, Finance Minister Trevor Manuel confirmed on Monday.
The margin of the mistake was not clear as yet but steps were underway to prevent a repetition, he told reporters in Pretoria.
”Clearly there has been, on the part of the Statistician General (Pali Lehohla), admission of an error, which needs to be corrected,” Manuel said.
”But I don’t think we know, as we sit here, what the margin of error is and which elements would be amended by how much.”
Statistics SA was expected to say more about the matter at the release of the CPIX (consumer price index less mortgage costs) on Friday.
The minister met the Statistics Council earlier in the day on Stats SA’s decision to delay last week’s release of the CPIX because of concerns about its accuracy.
This was after economists warned that Stats SA’s use of outdated rental income figures meant annual inflation could have been overstated by as much as two percentage points.
CPIX is used by the SA Reserve Bank to determine its inflation targets. Last year saw four increases of one percentage point each in the prime interest rate, based on CPIX figures.
The Statistics Council acts as custodian of the country’s official statistics, advising the minister and Stats SA.
Manuel said: ”The question we have to ask… is how something like the CPIX slipped through the cracks — because it has.”
Asked about the effects of this, Manuel said there might be issues — apart from interest rates — that might have fiscal implications.
”I know this also impacted on our gross domestic product deflaters and our public sector wage bill,” he said.
”(But) some of the enthusiasm of people to act against the government for the error is a bit overstated.”
Mistakes with official statistics were not uncommon in countries such as the United States and the United Kingdom.
”So, these things happen. What is important for us is that the reputation of Stats SA can be restored,” Manuel said.
The first step was to determine how the error came about.
South Africa’s system of official statistics needed to be above reproach with a high level of legitimacy.
”South Africa has the right to a set of official statistics which are punctual and deemed to be correct. You don’t want delays,” Manuel said.
Asked if the corrected CPIX figure would be backdated, Lehohla the decision about this would be made known on Friday.
The Democratic Alliance (DA) urged the government to address what it termed a crisis of confidence in the country’s economic statistics.
”Direct investment… hinges on confidence in our economic environment and the data that describe it,” DA MP Mark Lowe said. – Sapa