Take physic, pomp

Luis Carranza, Man in Denial

Yesterday Peru’s increasingly embarrassing FinMin, Luis Carranza, said that first quarter GDP growth would come in at 3% and his full year forecast was still 4%. He alled the February 0.19% disaster a “pothole”….potsmoke is more apt under the circumstances, as Luis is obviously been toking the waccybaccy.

So let’s check on this blathering. First Carranza’s quarterly forecast January was 3.1%, February was 0.19%, so to get a 3% average for 1q09 we’ll need March to come in at 5.7% or so. I mean, even his own ministry is calling March at 3%, and that’s the highest forecast out there…and by a long way.

Secondly his 4% growth target for the year. I refer you, kind and gentle lector of IKN, back to the theoretical projections chart of yesterday, reprinted here.

The above isn’t my estimate or guessworrk, this is just plain old mathematics and numbercrunching. Put simply even if Peru knocks out a 4% average monthly growth from here to December Peru’s GDP comes up short of 4%.

He pins his hopes on a $3Bn stimulus package that doesn’t even get close to covering the difference in copper revenues in 2009 (forget all other exports….just copper is going to drop by at least $4Bn). He cites the fact that fishery will pick up in March but forgets it’s only 0.72% of GDP weighting, conveniently ignoring the disastrous 7.45% drop in manufacturing output that will surely repeat.

Look, this stuff isn’t tough economics and Carranza knows his subject, so he’s either suddenly developed a nasty case of stupid or he knows he’s lying through his teeth.

Go on…take a wild guess….

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