Why Official Economic Statistics in Iran Cannot Be Trusted

Amir2018TaghatiJanuary 2, 2024
Why Official Economic Statistics in Iran Cannot Be Trusted
Within the current clerical regime, the responsibility for delivering crucial economic statistics rests on two key

iran contradicting statistics
Written by
Mansoureh Galestan

Systematic manipulation of economic metrics by the Iranian regime
Four minutes read

Within the current clerical regime, the responsibility for delivering crucial economic statistics rests on two key institutions: the Statistical Center and the Central Bank. However, these institutions consistently provide varying economic variables and statistics, citing different reasons and justifications. This practice has enabled the clerical system to rationalize its setbacks and long-standing financial difficulties by attributing them to these statistical differences. As a result, the audience becomes disoriented, ultimately abandoning reliance on internal audits and turning instead to foreign statistical centers.

Notably, Mohammad Reza Farzin, the head of the Central Bank, sees the statistical disparities between these two institutions as a “natural and historically ingrained aspect.”

In recent months, the regime’s president, Ebrahim Raisi, has consistently highlighted economic growth and new achievements of his government, relying on statistics released by institutions under his authority. Using the statistical disparities, he promises improvements in the overall situation.

According to the Iranian Statistical Center, the economic growth in the first half of the current year has been reported as 7.5%, while the Central Bank indicates a figure of 4.7%. The gap between these two estimates amounts to a significant 2.2 trillion tomans, equivalent to 32.4% of the gross domestic product for the first six months of this year.

These discrepancies in statistics are not limited to aggregate figures; the relevant subcategories also exhibit noticeable differences. For instance, the Statistical Center has estimated Iran’s gross domestic product (GDP) for this summer at 4. 803 trillion tomans, which is 986 billion tomans (25.8%) higher than the figure reported by the Central Bank. In other words, the Central Bank contends that the Statistical Center has overstated the average production of goods and services per capita by nearly 12 million tomans for this summer.

In general, for the past five years (20 quarters), the Statistical Center has consistently estimated Iran’s gross domestic product (GDP) to be over 20% higher than the Central Bank’s estimates. One of the justifications for this disparity is the difference in the base year used by both institutions.

Additionally, their acceptable inflation rates contribute to the statistical gap. Interestingly, the Central Bank reports a non-oil economic growth of 2.4%, while the Statistical Center of Iran indicates 4.2%, a significant difference. Furthermore, the agricultural sector’s growth is reported as negative 3.2% by the Statistical Center, while the Central Bank portrays a positive 0.1%.

On December 24, the state-run newspaper, Donya-ye Eqtesad, expressed concern, “This situation leads to a muddled discourse and makes dialogue and reaching conclusions about the country’s situation nearly impossible. Moreover, policymaking becomes impractical in this atmosphere. Should policymakers base their decisions on positive growth statistics, or should they consider the negative ones? If policymakers intend to use monetary tools to navigate through a recession or stimulate a sector, which set of statistics should be taken into account?”

The next day, Jahan-e-Sanat newspaper admitted, “The recently published statistics regarding the country’s economic growth not only lack compatibility with the realities of Iran’s economic field but should also be considered deeply misleading.”

In this piece, the author, Dr. Mohammad-Qoli Yoosefi, a university professor, the source discussed the monopolistic nature of the regime’s economy, writing, “The national capital account is severely negative due to the outflow of capital from the country. On the other hand, there is no significant foreign investment in the country’s economy, no notable innovation in technology, and the private sector lacks the ability to purchase licenses and patents from global firms. Exactly why should we anchor our trust in the current economic growth statistics? The increase in government spending is not a sustainable solution.”

However, media outlets affiliated with the sidelined factions of the regime reveal the reasons behind the allegedly positive economic growth report.

On December 24, citing the huge discounts the clerical regime offers its clients, the Etemad newspaper wrote, “A significant portion of this ‘export leap’ is owed to the ‘oil and gas’ sector. In fact, with the rise in oil sales, largely facilitated by significant ‘discounts,’ the primary and substantial role in economic growth in the first half of this year has been attributed to the oil and gas sector.”

Despite the regime’s depletion of the country’s resources, the costs associated with its terrorist agenda remain exorbitant. Tehran continues to struggle to cover expenses related to military endeavors, missile production, proxy forces, and satisfying the insatiable appetites of the ruling elites. This situation imposes astronomical budget deficits on the people, leading to inflation, soaring food prices, and increased housing rent.

The World Bank’s report also indicates that due to the chronic budget deficit in Iran, which has reached about 30% of the total budget, there is no room left for investment. Observing this crisis, sidelined factions criticize the tightly vetted Raisi government as incompetent and a recipe for ultimate breakdown.

On December 29, in an interview with the state-run Didarnews, Mohammad-Taghi Akbarnejad, a state-affiliated cleric said, “The central focus of Mr. Khamenei’s political strategies extends beyond national borders rather than being confined within them. The matter of Palestine has become the cornerstone of the Islamic Republic’s priorities. I don’t like to use this expression, but if we continue with the same approach, we will hit a mountain. The only Shia nation will be lost. Where do we want to go with this method? It is very dangerous. For this reason, I am concerned about the system’s collapse. It can happen in any way, be it within the framework of the revolution, a collapse, or anything else. These possibilities should not be dismissed.”

 

Why Official Economic Statistics in Iran Cannot Be Trusted

Amir2018TaghatiJanuary 2, 2024
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