Tyranny of numbers

New GDP data in Iran: is recovery underway?

Posted in General, Macroeconomy by Djavad on October 10, 2014

In its recent quarterly Economic Trends, the Central Bank of Iran reported that the economy grew by 4.6% last spring (which corresponds to the first quarter of the Iranian year 1393 and the second quarter of 2014).  What appears to be straightforward reporting of macroeconomic facts has caused much controversy in the Iranian media.  Controversy is part and parcel of economic data in Iran, so nothing is new there, but in this case the facts themselves are not as straightforward as one might think.  Mr. Rouhani and his economic team insist that the numbers are a firm sign that the recession has ended, while the opposition dismisses the news as bogus.

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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.

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What do job numbers say about economic recovery in Iran?

Posted in Employment, General, Macroeconomy, Unemployment by Djavad on July 24, 2014

The most recent labor force survey (LFS) results for spring, 2014, that Iran’s Statistical Center released last week must be disappointing for Rouhani’s economics team.  This survey, which  is collected quarterly and is put out with remarkable speed, is the only official data that give us a sense of how the economy has been doing most recently.  The short report shows job gains in agriculture (by 25%), which may be mostly seasonal, and services (by 2%), while industry lost jobs (by 1.3%).  The fewer number of jobs in industry is disappointing because the main benefits of the agreement between Iran and the 5+1 signed last November were expected to come in industry.  The employment picture that LFS paints for industry is not very complimentary for Rouhani’s first year in office.  Industrial employment, according to LFS, has been declining since he took office a year ago.  Last summer, more than 7.5 million workers were employed in industry, 9 months later fewer than 7 million are working there.   Agriculture and services have also lost since then, though by less, for a total of one million jobs lost since he took office.

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Reading Piketty in Tehran

Posted in Employment, General, Inequality, Macroeconomy by Djavad on July 11, 2014

If you are someone who pays attention to economic news and have not been hiding in a cave for the past few months, you must have heard of the famous book by the French economist Thomas Piketty, Capital in the Twenty-First Century.  Since its translation was published in English earlier this year, it has sold more than half a million copies, which is astonishing for a book with many tables and charts (a publisher once told me that each chart cuts sales by 10%  — there goes that bit of wisdom).

Last month people were also talking about Piletty’s book in Tehran, and this month’s Mehrnameh, published this week, has a section discussing it, including a short interview by yours truly.   I must confess, as I did to the interviewer, that like most people who have bought the book, so far, I have only read the introduction (I have read, however, many of the book reviews — more pages of reviewes than of the book itself! Read an excellent early review by Branko Milanovic here). (more…)

Is Iran’s rate of unemployment really falling?

Posted in Employment, General, Macroeconomy, Unemployment by Djavad on January 29, 2014

I have my doubts about the rate of unemployment — 10.3% — recently published by the Statistical Center of Iran (SCI) for fall 2013 (Iranian year 1392), so in a piece that I just published in Lobelog.com I opted to report a rate of 14% that I estimated myself from the SCI report.  The difference between the published number and mine is, as in my previous post on unemployment, all in counting the reduction in the number of people in the labor force as discouraged workers and therefore unemployed in common parlance. (more…)

Is it time to declare the war on Iran’s inflation over?

Posted in General, Inflation, Macroeconomy by Djavad on January 27, 2014

This is an update on my last post on inflation, which continues to slow down, and a call for letting inflation drop from the top position on the new government’s list of priorities, to be replaced, hopefully, with fighting unemployment. (more…)

Reading inflation in Iran

Posted in General, Macroeconomy by Djavad on November 7, 2013

There seems to be considerable confusion in the Iranian media about the pace of inflation. Since inflation is the main concern of the new Rouhani economic team, getting the facts right about its pace, whether it is rising or falling, is extremely important.  There are questions about the accuracy of the official inflation figures, much of it exaggerated, but the most common source of confusion is not about the accuracy of official data but how to read them. (more…)

Inflation is down but hold the cheer

Posted in General, Macroeconomy by Djavad on September 15, 2013

The latest inflation figures for the Iranian month of Mordad that ended on August 20 show that the Consumer Price Index (CPI) rose by a modest 1.16%, which translates into an annual rate of 14.9%, or less than half of the recent annual rate of inflation.  The month before prices rose at an annual rate of 18.4%, which is also way down from the 49.7% increase Iran experienced in June. (more…)

Inflation reporting in Iran

Posted in General, Macroeconomy by Djavad on April 4, 2013

The statistics most readily available for Iran are about prices, yet they are seen as the least believable.  Last week the Statistical Center of Iran that reports on unemployment, household budget and national income, and  now claims to be the official source for reporting on inflation, published a report providing us with detailed information on prices for the last six years (2007-2013).  It shows that the consumer price index (CPI) rose by 40.6% during the Iranian year 1391 (21 March 2012 to 20 March 2013), and the average index for 1391 was 31.5% above 1390.  The former is the point to point inflation, what people feel, and the other is what is officially reported as the years’ inflation. (more…)

Inflation and money supply in Iran: a closer look

Posted in General, Macroeconomy, Sanctions, Subsidy reform by Djavad on February 11, 2013

Last week, in a post on the Lobelog.com I noted further signs of moderating inflation.  Prices in the Iranian month of Dey (ending 20 January 2013) rose by 1.7%, compared to 2.5% the month before and 4.5% per month in the previous two months after devaluation.  These are high rates of inflation on an annual basis (see chart below), but a sign that the Central Bank may have found a way to keep the growth of money supply below the rate of inflation.  I was curious enough if this were the case to look up money supply data published by the Central Bank and here is what I found.  For the quarter that ended on December 20, 2012, which covers the three month period after devaluation, the rate of growth of money supply was 20 percentage points below the rate of inflation. (more…)