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MP Giorgi Kandelaki (United National Movement) criticised the economic policy of the Georgian Government and Bidzina Ivanishvili at the plenary session held on 29 May 2013. He emphasised the problems in the business sector and stated: “Today, we have up to 100,000 new unemployed people in Georgia. Up to 100,000 people have lost their jobs. People are being fired from banks, big businesses and companies.”

FactCheck

wondered about the accuracy of the data mentioned in the statement by the MP.

The National Statistics Office of Georgia published data of the business sector for the first quarter of the current year on 4 June 2013. The statistics demonstrate that the number of employed people in the fourth quarter of 2012 was equal to 527, 800 while this number in the first quarter of 2013 was 485,700. As a result of simple mathematical calculation, we can say that the number of unemployed people in the first quarter of 2013 has decreased by 42,100 as compared to the data from the fourth quarter of 2012.

However, Zaza Chelidze, Executive Director of the National Statistics Office of Georgia, states in an interview with the news agency, interpressnews, that the first and fourth quarters should not be compared to each other. For an accurate interpretation, data should be compared with the corresponding period in the previous year due to the fact that the data from the first quarter is always lower than the data from the fourth quarter. According to him, this is caused by various factors.

According to Chelidze: “Business activity reaches its peak in the fourth quarter. Agricultural harvesting increases turnover, trade and employment. Activity in the service sector is also big with a retail sales increase in the pre-New Year period. The third factor is construction, since the completion of construction projects mainly coincides with the end of the budget year.”

Chelidze indicates further that there is no activity in agriculture, trade or construction in the first quarter. “Indicators in the first quarter of 2013 as compared to the fourth quarter of the previous year have decreased; however, this does not imply that jobs have been lost, it simply means that the economy was not able to create new jobs. This is a usual, seasonal situation. Generally, statistical data should be compared to the same period in the previous year. Comparing fourth and first quarters is the same as comparing whether or not grape harvest was higher in the autumn or in the spring,” he stated.

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 of parallel quarters of different years can be done. Therefore, also in this particular situation, if we compare data from the first quarter of 2013 to the data from the corresponding period in 2012, we find out that the number of employed people increased by 15,700 in this period in the current year.

 saqstati

In order to get a full picture, we checked the data from the fourth quarter of 2011. It turned out that the number of persons employed in the business sector was equal to 379, 200 in the fourth quarter of 2011. Correspondingly, the data from the first quarter of 2012 [which was equal to 470,000] increased by 90,800 as compared to the fourth quarter of 2011. FactCheck

talked with Zaza Chelidze, at the National Statistics Office of Georgia. According to him, data from the first quarter of 2012 was an exception and out of the general context. The increase in the number of employed people in the first quarter of 2012 as compared to the fourth quarter of 2011 was caused by updating the business register since the first quarter of 2012 and the improvement of enterprise coverage quality [instead of 40,000 enterprises, 60,000 enterprises were researched] by the National Statistics Office of Georgia which was a significant change in the old data. Accordingly, the study of data from the year 2011 cannot be used to enrich the informative part of our research.

Data published by the National Statistics Office of Georgia on 4 June 2013 reflects the data only from the first quarter of 2013 [the first quarter includes the period from January-April]. Giorgi Kandelaki made a statement regarding the decrease in jobs by 100,000 on 29 May when the first two months of the second quarter had already passed. The National Statistics Office of Georgia does not yet have statistical data for the second quarter; the information will be published by September. Correspondingly, at this point there is no statistical data regarding the number of employed persons in the business sector in the second quarter. Therefore, it can be assumed that Giorgi Kandelaki could not have similar statistics. We contacted him through an official letter and requested the information which he used to make his statement but we did not receive a response.

In his statement, Giorgi Kandelaki also refers to the firing those persons who were employed in commercial banks. We wondered about the current situation in banks. The National Statistics Office of Georgia does not study commercial banks within the scope of the business sector, but separately. Accordingly, we requested relevant public information from the National Statistics Office. An official document demonstrates that as of 1 January 2013 the number of employed persons in commercial banks operating in Georgia is equal to 18,400. By the end of the first quarter [31 March], this number is equal to 18,700. Based on this data, we can conclude that the trend of firing people from commercial banks in the first quarter of 2013 cannot be observed and the reality is quite the opposite since we have a slight increase. Similar statistics for the second quarter of 2013 still do not exist. They will be known in September.

Conclusion

After having checked Giorgi Kandelaki’s statement, we discovered the following. Based on the official data of the National Statistics Office of Georgia, the number of jobs in the first quarter of 2013 decreased by 42,100 as compared to the fourth quarter of 2012; however, according to Zaza Chelidze, comparing the first and fourth quarters leads us to the wrong interpretation. Therefore, the data from the first quarter should be compared to the data from the corresponding period in the previous year. Chelidze clarifies that the data from the first quarter is usually lower than the data from the fourth quarter due to the fact that business activity reaches its peak in the agriculture, service and construction sectors in the fourth quarter. Similar activity is not observed at the beginning of the year; namely, in the first quarter.

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 the comparing of parallel quarters of different years can be done. After having compared the first quarter of 2013 to the first quarter of 2012, we determined that the number of employed people in the business sector increased by 15,700. At the same time, there are no statistics to show a reduction in the number of employed persons in commercial banks.

As we have already mentioned, Giorgi Kandelaki's statement on 29 May about the decrease in the number of jobs belongs to the second quarter. Checking the data from the second quarter was in our own interest; however, due to the fact that these indicators have not yet been counted, we cannot check this period. It should be noted that Giorgi Kandelaki would also not have information about the second quarter of 2013 due to the fact that similar statistics are not yet available.

In spite of circumstances that comparing the first and fourth quarters cannot be done, a question remains. When the number of employed people has been reduced by 42,100 in the first quarter of 2013 as compared to the fourth quarter of 2012, does this mean that we are encountering seasonal unemployment and that jobs were not terminated? Statistics cannot provide us with an exact answer. We can assume that seasonal unemployment occurred but we cannot exclude the case of a termination of jobs, especially when we take into consideration that the economic situation is not currently favourable in the country. Through this kind of approach to the issue, we can find some truth in the statement by Giorgi Kandelaki.

We rate the statement by Giorgi Kandelaki: “Today we have up to 100,000 new unemployed people in Georgia. Up to 100,000 people lost their jobs. People are being fired from banks, businesses and companies,” MOSTLY FALSE.