Nodar Khaduri, Minister of Finance of Georgia, presented the 2012 national budget report to the Parliament at the plenary session held on 14 June 2013. After the presentation, the Minister answered questions asked by MPs. Giorgi Kandelaki, Member of the United National Movement, asked the following question: “How can you explain the latest data released by the Department of Statistics which shows the statistics of unemployment for the first quarter of 2013 and a reduction in the turnover of the business sector?”

Nodar Khaduri noted that the political opposition interprets statistics in a wrong way; they compare data from the first quarter to the fourth quarter. The Minister stated: “One cannot compare Tuesday and Saturday in terms of the number of weddings. You should compare Tuesday with Tuesday and Saturday with Saturday. The first and fourth quarters cannot be compared. This is impossible due to the fact that economic activity is higher in the fourth quarter. It is true that the first quarter of 2013 was not a good one, but compared to the first quarter of the previous year, the number of jobs in the first quarter of this year increased by 15,000."

In order to support the argument that the first and fourth quarters cannot be compared to each other, Nodar Khaduri made an additional remark: “Compared to the fourth quarter of 2011, the number of jobs in the first quarter of 2012 decreased by 33,000. Therefore, the first and fourth quarters are not comparable."

FactCheck

wondered whether or not the following statistics presented by Nodar Khaduri were true.

The National Statistics Office does not have a methodology of seasonal adjustments. Accordingly, if the data is not seasonally adjusted, comparing any quarter to any other quarter (adjacent or non-adjacent) is not possible and only comparing parallel quarters of different years can be done. Taking into account this factor, Nodar Khaduri's point of view on how different quarters are compared is correct.

According to the data provided by the National Statistic Office of Georgia,  the number of employed people in the business sector in the first quarter of 2013 was equal to 485,700. In the same period in 2012, this indicator was equal to 470,000. Based on these statistics, we can conclude that as compared to the first quarter of 2012, the number of employed people in the first quarter of 2013 has actually increased by 15,700.

 

As for the second part of the statement by the Minister of Finance, we found out that the number of jobs in the fourth quarter of 2011 was equal to 379,200. The number of employed people in the first quarter of 2012 was equal to 470,000.

According to these statistics, as compared to the fourth quarter of 2011, the number of employed people in the first quarter of 2012 did not decrease, but, rather, increased by 90,800.

 

Due to the fact that business activity in the fourth quarter is higher than in the first quarter, economic data from the fourth quarter is usually higher than from the first one. Therefore, increase in the job places in the first quarter of the 2012 by 90,800 as compared to the fourth quarter of 2011 seemed to us unrealistically high. We inquired about this particular data with GeoStat. According to the information of the National Statistics Office the update of the business register and the improved quality of enterprise coverage (60,000 enterprises were examined instead of 40,000) from the first quarter of 2012 by the Office caused an increase in the number of employed people in the first quarter of 2012 as compared to the fourth quarter of 2011.

As a result of  improved research methodology, GeoStat could register far more employed people now than it was able to do before. For the reason that the National Statistics Office has been using the new methodology for determining the number of employed people since 2012, the data that is calculated based on the new methodology cannot be compared to the data that is calculated based on the old methodology. Based on the new methodology, the National Statistics Office of Georgia currently registers those employed people who possibly were employed before 2012 but whose registration was not previously possible based on the old methodology. That is why neither FactCheck nor GeoStat can precisely say what is the share/impact of the new methodology in the number of 90,800 increased employees. Therefore, comparing the first quarter of 2012 to the fourth quarter of 2011 is not possible; we are not even able to say whether we have an increase or a decrease of the number of employed people. Accordingly, there is a lesser probability that the Minister of Finance surely knew whether or not in the first quarter of 2012, as compared to the fourth quarter of 2011, the number of employees reduced. Our point of view is backed with the following fact:

The inaccuracy of the second part of the statement, apparently, was caused by the fact that Nodar Khaduri compared the employment figure of the first quarter of 2012 to the average employment figure of the whole 2011 [503,236 employees] and not to the employment figure of the fourth quarter of 2011. As a result, he obtained a difference which amounted to 33,000 employees (

average year employment equals to the average of monthly or quarterly data). Since GeoStat calculated the average employment of 2011 in the third quarter of 2012, its calculation was done based on the new methodology and largely exceeds the quarterly employments of 2011 published by GeoStat.

Conclusion

Having checked the statement by Nodar Khaduri, we found out that compared to the corresponding period in 2012, the number of employed people in the business sector in the first quarter of 2013 increased by 15,700. We found inaccuracy in the second part of the Minister’s statement. According to him, as compared to the fourth quarter of 2011, the number of employed people in the first quarter of 2012 decreased by 33,000. But, according to the data published by GeoStat, comparing the first quarter of 2012 and the fourth quarter of 2011 does not give a difference 33,000 employees. As we suppose, in reality, the Minister of Finance compared the average number of employees of 2011 [calculated based on the new methodology] to the number of employment of the first quarter of 2012 (in his remark he said, that he was comparing employment of the first quarter of 2012 to the fourth quarter of 2011) and as a result he obtained a reduction by 33,000 that is confirmed by the numbers stated above.

Therefore, we rate the following statement by Nodar Khaduri: “Compared to the corresponding period of the previous year, the number of jobs in the first quarter of 2013 increased by 15,000; compared to the fourth quarter of 2011, the number of jobs in the first quarter of 2012 decreased by 33,000,” HALF TRUE.