Believe it or not — with Greece and China having been suspected at various points of economy with the truth, yet another sovereign state has been accused of fiddling its statistics.
This time round it is Russia.
An article penned by Dmitry Krylov in the Russian language NewTimes.ru, and picked up by Paul Goble in the English-language Georgia Daily Independent Voice, asserts that data from Rosstat, the state statistics agency, provides grounds “neither for pessimism nor for optimism” because the data has been massaged to such a degree that “one simply should not believe Rosstat numbers”.
(H/T Simon Briscoe, the FT’s statistics correspondent.)
What particularly strikes us is the following passage from the Georgia Daily article:
After not putting out its index of industrial production during the early months of the economic crisis, Rosstat at the start of this year started to do so again. “If one believes the latest data, [industrial production] rose 5.8 percent in January-February [2010] in comparison with the same period a year earlier,” and it rose 4.8 percent from January to February of this year alone.
The fact that Russia chose not to put out its index of industrial production over the crisis seems extraordinary.
These, meanwhile, are the figures as they stand on Rosstat’s website now:
The allegation, though, is that the figures mean relatively little.
The statistics agency changed its methodology in the intervening period, meaning it may be pointless to make comparisons.
The changes included a shift in the weighting of the various component factors of the index, and specifically an increase in the weighting given to the extraction sector, and away from other domestic sectors. The manoeuvre gave the index an immediate boost from Russian oil production activity.
But there were more changes. The second set amended the different classifications of industrial production. This, the article claims, may have compromised the way the index accounted for seasonable fluctuations and “made significantly more difficult the identification of short-term tendencies” in the development of the economy.
All of which may, or may not, have contributed to an overly positive effect to the index too.
While the timing of the changes could just be a coincedence, the New Times’ Krylov remains sceptical.
As the Georgian Daily reported him writing:
“why did the time for their introduction come during a crisis when attention to official economic information and especially to comparisons of indicators for various short-term periods reached at apogee among government agencies, scholars and the expert community as well as among ordinary citizens as well?”
The argument being that it might have proved more sensible for Rosstat to abandon its methodology changes over the crisis when the data was in such high demand.
Whatever the case, it’s worth pointing out that Rosstat’s former head Vladimir Sokolin felt particularly embittered when he departed the agency last October.
In an interview with the Itogi magzine, he openly criticised the 2008 decision to put the service under the control of the Economy Ministry, claiming it threatened the objectivity of the data. What’s more, he added Russia’s economy had not yet started to recover and that a lack of good economists was to blame.
Reuters, meanwhile, quoted him saying:
“The agency which is the main user of our data and which compiles a lot of reports and forecasts, has a big temptation to direct statistics in the direction which it needs,” he said. “So the ministry starts to give orders — we need to monitor this and that. It is a good thing that for now they are not saying how to monitor, not trying to manipulate the numbers.
And according to the wire, it’s not just the industrial production figures that had their methodology changed.
Related links:
Titlos and Greek currency swap titillation – FT Alphaville
Greek tragedy – FT Alphaville