Wednesday, August 31, 2011

Loose lips sink ships

The Central Statistical Office, tenderly known as GUS (Goose), published statistical data on Tuesday at the official time of 10 am on Poland's gross domestic product for April to June. Polish real GDP growth hit 4.3% percent year-on-year, not bad considering gloomy conditions in Europe and slightly gloomier expectations.

Investors didn't react. They already knew the data.

Around 30 minutes before the official publication, the Reuters news agency published a leak giving precisely the headline GDP growth rate of 4.3 percent and basing it on a "senior government source." Whoops.

One can easily see some over-eager government member wanting to trumpet early the fact Poland still sports relatively fast economic growth. But that PR victory could prove costly for the individual in question.

GDP and like data are considered statistical state secrets until published. Article 54 of Poland's Law on Public Statistics says any violation of "statistical confidentiality is punishable by imprisonment for up to 3 years." Ladies and gentlemen, we seem to have a winner. Someone should go to jail for this.

GUS asked Wednesday Prime Minister Donald Tusk's chancellery for an explanation. The stats office delivers the data results by hand (meaning by vehicle) to the PM's office, the president's office and the heads of the lower and upper houses for 10 am, a GUS spokesperson told a business network. There could, though, be a chance it arrives early. Indeed.

One potential "senior government source," Minister Michal Boni, denied knowing the GDP print beforehand. He seemed perturbed. He should be. He is undoubtedly the source of other less important leaks. It could thus be him, though I hope not since he is most competent.

I am making a fuss because this is for real. GDP data is absolutely critical for markets. Full stop. Period. Completely.

If Reuters published it 30 minutes before the official release, it means the agency's journalists knew the number sometime before then. I don't believe any Reuters journalist did anything remotely wrong, but the very leak does raise serious questions and does raise the potential of wrong-doing. How many reporters knew the leak by hearsay or via editing or simply overheard conversations about it. Any of these people could have seen the light and sent the figure off to their favourite broker or relative. Getting beyond-consensus GDP data early constitutes insider information par excellence.

I don't blame Reuters. All news agencies hunt for that most elusive of prey, exclusive news, and I'd publish it too if I got it. So congrats. But this  transgression is serious. At the very minimum, it shows disregard for the value of information on the part of the government. At worst, someone close to Prime Minister Tusk believes that the law can be broken for a mini PR victory.

1 comment:

  1. Reuters did not break in to the shop, but they did reset the goods. If there were no fences there would be fewer robberies...
    A tinge of a NoTW scandal here, methinks