Investigation Finds Possible Fraud in Hungary's Inflation Calculation

Published: December 09 2023

Recent reports suggest doubts about the reliability of Hungarian statistics. Eurostat, the European Union's statistical office, is currently in talks with the Hungarian Central Statistical Office (KSH) regarding the method of calculating energy inflation. This article provides an overview of the investigation findings and the concerns raised.

There have been concerns among analysts about the accuracy of data from the Hungarian Central Statistical Office (KSH), particularly regarding the revision of second quarter GDP data and inflation falling below 10 percent in October. Several economists have questioned the methodology used to calculate energy inflation, suggesting that if the KSH had used the previous year's methodology, inflation in October would have been higher. The KSH has strongly denied these accusations and stated that their calculations are in line with European statistical guidelines.

Eurostat regularly checks compliance with methodological guidelines by EU member states and has initiated negotiations with Hungary regarding the calculation of energy inflation. While Eurostat has not confirmed if the inflation data will be revised, they have stated that it is a possibility. The reliability of Hungarian data is constantly reviewed by Eurostat as the KSH must comply with European standards.

There are concerns that the Hungarian government may be interfering in the work of the KSH to publish more favorable data under political pressure. However, it is difficult to judge the extent of this interference as an outside observer. The reliability of GDP and inflation data in countries like Turkey and Russia has been questioned, indicating the importance of accurate data for investment purposes.

Contrary to media reports, Eurostat has not launched an investigation against the Hungarian Central Statistical Office. The KSH has stated that its methodology is in line with the European Commission's regulations and calls on journalists to fact-check politically motivated statements before publishing them.

These concerns surrounding the calculation of inflation data and the potential for political interference highlight the importance of transparent and accurate statistical practices in Hungary.

What is the current issue regarding the calculation of inflation in Hungary? There are growing doubts about the reliability of Hungarian statistics, specifically regarding the calculation of energy inflation. Eurostat, the European Union’s statistical office, is in talks with the Hungarian Central Statistical Office (KSH) regarding this issue. There have been concerns that the data from the KSH may have been influenced to show more favorable inflation numbers.

Is there a possibility that the inflation data in Hungary will be revised as a result of these negotiations? Eurostat mentioned that there is a possibility of revising the Hungarian inflation data, but it is a very rare occurrence.

Are there concerns about the methodology used by the Hungarian Central Statistical Office in calculating energy inflation? Experts have raised concerns about the KSH's methodology for calculating energy inflation. Some economists believe that if the KSH had used the same methodology as previous years, the inflation in October would have been higher, around 11-12% instead of below 10%.

Is there evidence of political pressure affecting the publication of inflation data in Hungary? There are speculations that the Hungarian government may be interfering in the work of the KSH to publish more favorable data under political pressure. However, it is difficult to judge the extent to which this is true.

Are there concerns about the reliability of GDP and inflation data in other countries as well? Some countries, such as Turkey and Russia, have faced serious questions about the reliability of their GDP and inflation data. These countries are typically not recommended for investment by credit rating agencies.

Is Eurostat investigating the Hungarian Central Statistical Office? Contrary to media reports, Eurostat has not launched an investigation against Hungary's Central Statistical Office. Eurostat is in constant dialogue with the statistical offices of all member states regarding methodology, and the KSH's methodology is said to be in line with European Commission regulations.

Are the concerns about the reliability of Hungarian data widespread? For now, the concerns about the reliability of Hungarian data are not widespread, as the KSH is required to comply with European standards and Eurostat regularly reviews the reliability of Hungarian data.