Yesterday Peru’s FinMin and nation’s number two liar Luis Carranza (numero uno above) gave a presentation on the prospects for his country’s economy. If anyone wants a copy of the powerpoint show (49 slides of fun with dense numbers, graphs with arrows pointing UP! UP! UP! and Spanish language) send me a mail, but suffice to say the whole idea must have been to blow smoke in the eyes of the dumbass nodding donkey journalists present. That’s because anyone with a basic understanding of economics….and i mean basic really is enough…can see just how much BS was on display yesterday.
For one thing, the full-on statistician Farid Matuk was quick to point out that MEF has quietly dropped something called GDP elasticity from 3 to 1. What this means in practical terms is that they are suddenly toeing the line of the Central Bank and assuming a currency devaluation to maintain growth at all costs (esp to the cost of those poor Limeños with mortgages in dollars). However a different statistic that I noted was that the breakdown of Carranza’s fantasy 3.5% GDP growth this year assumes a 5% growth in mining GDP.
Whaaaaaaaaaaaaat?????? We’re supposed to believe that Peru’s mining industry will contribute 5% more this year than it did last year…remember copper at $4/lb, Zinc and Lead at $1/lb and silver at $18/oz, people? Here’s a chart using final metals exports as a proxy to total GDP activity in Peru’s mining sector (as nearly all the metal produced in Peru is exported). We see the 2008 export figures for Peru, the first three months of 2009 and what Peru will need to export to get that 5% growth Carranza masturbates about.
It’s asinine. It’s just a heap of barefaced lies. Nothing else. There’s no way that monthly exports can suddenly jump from under $1.1bn to over $1.83Bn and stay at that average for the rest of the year. More likely is a $6bn gap between the cash Carranza wants and the cash he’s going to get. And $6Bn in Peru is a significant chunk of annual GDP.
There’s only one question left to answer now: Will this man do the honourable thing and resign when his ridiculous economic projections are proven false by the end of this year?