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Poland Table of Contents


Statistical Distortions

Comparative statistics for this period, which generally caused overstatement of the 1990 decline, must be understood in their context. Two factors contributed to this faulty estimate. First, 1989 figures provided the basis for evaluating the economy's 1990 performance. Traditionally, output statistics in centrally planned economies were inflated to show success in every case. Also, the 1989 figures did not reflect the lowquality , unprofitable goods produced by subsidized state enterprises. Unprofitable production was shown as a statistical increase in NMP even as it reduced national income in the real world. Furthermore, until 1989 personal income and real wage calculations used the artificial official price index, so they were not a true measure of consumer purchasing power.

On the other hand, official statistics for 1990 and 1991 reflected a downward bias. Revenues and incomes deliberately were underestimated in order to avoid higher taxes. Because of these distortions, decentralized economic activity in the state sector and rapid growth in the private sector clearly required new methods of collecting and presenting statistics. In 1992, however, the Central Statistical Office in Poland had not yet removed the distortions of the previous system from its statistical formats. Unemployment statistics also failed to keep pace with the actual economic situation. The rapid expansion of private enterprise in 1990 provided jobs for many people who had registered for benefits established at the beginning of the reform period. Meanwhile, legislation was slow to reform the accounting system. Even after statistical adjustment, however, the first three years of economic reform brought Poland genuine, deep decline in industrial production, in GDP, and in real personal incomes and wages.

Data as of October 1992