Tyranny of numbers

Recording a lackluster economic performance in Iran

Posted in General, Macroeconomy, Sanctions by Djavad on August 4, 2014

Today is the first anniversary of President Rouhani in office, so I wrote a piece for Lobelog.com reviewing the economy’s performance.  I noted his accomplishments –lower inflation, stopping or slowing down economic free fall and above all lifting business spirits —  and setback — continued loss of jobs in industry right up to this summer.  The fact that I am able to claim the latter is because of another accomplishment of his government, which I did not note in that piece — timely release of economic data.

Anyone who has tried to make sense of Iran’s economy during the Ahmadinejad years knows how scarce were timely data.  The national income accounts and the Central Bank’s annual reports ceased publication altogether.  (The CBI online data bank is still some 4 years old.)  But since Rouhani’s election, inflation data has been published about two weeks after the end of each month, employment data a month or so after the end of each quarter, and the household expenditure and income surveys about four months after the end of the year.  The Statistical Center of Iran that publishes all three types of data, broke record yesterday with the publication of a brief (one-page) report on GDP by its main sectors for 1392 (2014/2015) just this week.

What is praiseworthy is that the government did not delay the release of these reports, even though they documented the economy’s lackluster performance and therefore not complimentary to Rouhani’s administration.  This is a welcome change in the direction of openness that is necessary for good economic management and one only hopes that it will continue even if the data fail to tell a more positive story in the future.

Changing the subject a bit, timely data might have helped the Roubini Global Economics and the Foundation for the Defense of Democracies who jointly published a report last month arguing that Iran’s economy was on its way up.  They had to come up with their own numbers to show this, perhaps because they could not find actual data.  Of course, their intention, as far as I can tell, was not to praise Rouhani, but to argue that the US had given Iran too much sanctions relief and should instead tighten them.  Another assessment of Iran’s economy, from the better informed Washington Institute for Near East Policy, reached a similar conclusion but was less specific about its policy implication.  Last February, the Wall Street Journal wrote about Iran’s economic improvements that might toughen its negotiating position.

But, come to think of it, perhaps more timely data would not have made much of a difference, for the sanction lobby could have used the actual, more dismal data to argue that since Iran is in a tight spot it is no time to ease the pressure.

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