Economy, Business And Markets

An Uneasy Relationship

An Uneasy RelationshipAn Uneasy Relationship

Data is the lifeline of the modern economy.

The movers and shakers of business base their decisions on transparent and reliable data. Tech startups are analyzing mounds of information to tell decision-makers what’s trending, where the closest customer is and even whether they can be trusted.

So, in data we trust; but how? By weighing up the credibility of its provider, their methods and their consistency.

The Central Bank of Iran left economic growth data out of a recently published report, which cover the first quarter of the current Iranian year (March 21-June 21, 2015). It recounts balance of trade, banking data, inflation and foreign exchange trends, and even a bit about population.

According to the report, 1.4 million barrels of oil were exported daily during the period, a 0.4% decline over the last year, while production grew by 2.6% reaching 3.93 million barrels per day.

Iran’s foreign debts amounted to $5.5 billion by June 21, $5.31 billion of which are long- and mid-term commitments.

The report adds that the government defaulted on $1.57 billion of its foreign financial commitment due largely to the sanctions.

Government debt to the banking system climbed to 1.56 quadrillion rials ($52.3 billion), indicating a growth of 6.7% compared with the same period of last year. In fact, government debt to the central bank jumped by 34.6% and reached 247 trillion rials ($8.27 billion).

However, as said before, the key growth rate was conspicuous by its absence in the report.

The Statistical Center of Iran seems to be treading the same path. It provided preliminary growth data for the first half ending Sept. 22, but it has yet to release a final detailed version.

According to SCI, economic output grew 1% in this period, as growth in agriculture and services outweighed a 1.1% contraction in industrial output.

The SCI is part of the president’s entourage and, a few months back, was anointed as the sole “provider” of official economic data. The CBI finds the word “sole” offensive to its status. But that is something for another time.

The two are fighting for the “official data provider” credit. Yet curiously, both decline to do just that. It has gotten to a point where the International Monetary Fund has called on them to start churning out quality data and to do it on time.

It is reminiscent of the former administration’s response to gloomy macroeconomic data when the economy was contracting at 6.6%, inflation was soaring—it hit a year-on-year peak of 45.1% in 2012—and Iran’s currency, rial, had lost 70% of its value in preceding crises.

However, conditions are way better now and fear of “public anxiety” is not an excuse to force blind decisions on businessmen.

The new helmsmen at the central bank and SCI surely understand they need to regain the credibility their organizations lost in the recent past.

Soon, apart from Iranian businessmen, foreigners will also be tuning in to hear what they make of Iran’s economy. The stakes are high. They should learn to play the part responsibly.