Investors see bias as Russian agency revises figures

Surprisingly optimistic figures from Russia’s statistics agency have alarmed some investors, who say data on the Russian economy appears to have become less accurate and more biased towards good news during the country’s long recession. Some say the problem could now get worse, after President Vladimir Putin shifted oversight of statistics agency Rosstat to the economy ministry, which is charged with delivering 2 per cent growth this year after two years of contraction.

Rosstat surprised economists by recording a gross domestic product (GDP) contraction of just 0.2 per cent last year, much shallower than expected, and by revising the previous year’s contraction to just 2.8 per cent from an initial 3.7 per cent.

It has also delayed many data releases since the start of the year, twice reporting industrial output on the weekend after switching to a new methodology.

In late March, Economy Minister Maxim Oreshkin called the switch to the new methodology “extremely unsuccessful” and said Rosstat’s data for January and February might have to be significantly revised.

Putin, who is expected to seek a fourth term in the Kremlin next year, responded by transferring responsibility for Rosstat to Oreshkin’s ministry.

Previously it reported to the government as a whole, not to a specific ministry, a status intended to safeguard its independence from political influence.

Rosstat’s head Alexander Surinov said the connection with the economy ministry gave the agency the resources and clout to improve its data collection and would reduce the need for revisions.

“The ministry is a powerful player, therefore it’s possible that with its help we will solve our problems,” Surinov told a news conference earlier this month.

But one of his predecessors as Rosstat boss has said in the past that placing it under control of the economy ministry would expose it to greater risk of political interference.

“The entity which is the main user of our data, which compiles reports and forecasts, sees a very big temptation to steer statistics in the desired direction,” former Rosstat head Vladimir Sokolin told Itogi magazine in an interview in 2009 when he left the agency after 11 years in charge.

One of Oreshkin’s predecessors as economy minister also said earlier this month that the decision to change Rosstat’s reporting line was likely to alter the results it publishes.

“The growth figure will depend on who Rosstat reports to,” German Gref, who served as economy minister from 2000-2007 and is now chief executive of Russia’s largest bank Sberbank , told a conference in Moscow this month.

“This is the only thing that can seriously influence economic growth numbers as the rest is predetermined to a great extent.”