| MOSCOW, April 18
MOSCOW, April 18 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
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 percent
growth this year after two years of contraction.
Rosstat surprised economists by recording a gross domestic
product (GDP) contraction of just 0.2 percent last year, much
shallower than expected, and by revising the previous year's
contraction to just 2.8 percent from an initial 3.7 percent.
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
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
"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
Alexey Krivoshapko, a Moscow-based fund manager at
Prosperity Capital Management, said Rosstat's data seemed to
have become less reliable during the recession, which began
after oil prices fell and Western countries imposed sanctions
over Russia's interference in Ukraine in 2014.
"Our experience working with Rosstat data shows that as long
as the economy is in growth mode, the numbers seem to add up as
there is a lot of extrapolation in the system," he said.
"However in tricky years, such as 2015 and 2016, we clearly
saw a mismatch in some of the data, like nominal wages and
retail sales. It's not entirely clear if this is driven by
methodological issues or by some political desire to make things
look a bit better than they actually are."
He said the agency should use "more data from reliable third
parties, like the tax service, state-owned banks, modern food
retailers, and use them in addition to surveys and company
statistics to improve understanding of the economic situation".
Russia is far from the only country where investors contend
with a statistics agency that some of them may regard with
suspicion: investors in China, India and elsewhere have long
relied on alternative measures, such as freight shipment data or
power generation, to develop their own assessments of growth.
But in Russia, little such alternative data is commonly
available, making it difficult for investors to obtain an
independent picture if they lose trust in Rosstat.
"If you doubt too much the quality of numbers that are being
produced, how can you make a sensible investment decision? The
simple rule is if you don't believe the numbers, don't invest,"
said Zsolt Papp, a portfolio manager at JPMorgan Asset
Management in London.
Surinov, Rosstat's head, said the independence of Rosstat is
guaranteed by law. But he also acknowledged once receiving a
request from an unidentified "big boss" to massage the figures.
He quoted the official as saying: "It would be better if
inflation was slightly lower than last year. Could you not give
your bosses a present before New Year?"
Financial bodies like the International Monetary Fund have
complained in the past that Rosstat is under-staffed and that
some of its methods are out of date. That view was shared by
several economists and former officials who spoke to Reuters.
"The inability of Russian statisticians to adequately
monitor the dynamics of even the most basic indicators has long
been talked about," said Sergey Aleksashenko, a former deputy
central bank governor.
Rosstat tracks prices of more than 500 items in its consumer
basket of goods and services. But these include some that seem
out of date, like the cost of sending a 15-word telegram.
For many goods, no producer or brand is specified, allowing
"room for creativity" in collecting the prices, said Olga
Molyarenko, a lecturer at Moscow's Higher School of Economics.
One former economy ministry official told Reuters that in
the late 2000s, Rosstat used to measure cheese prices based on
the output of a single factory.
When Rosstat reported zero inflation for cheese at a time
when inflation was high in the rest of the economy, the official
asked the statistics agency for an explanation. It turned out
the factory was shut for renovation and had produced no cheese
that month. Rosstat reported that prices were flat.
"This is a vivid example of what's going on at Rosstat,"
said the official, who asked that his name not be published.
($1 = 56.8956 roubles)
(Additional reporting by Zlata Garasyuta in Moscow and Sujata
Rao in London; Editing by Peter Graff)