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Peru: The lies behind the miracle

As the old chestnut goes there are lies, damned lies and statistics. Never truer in the pretzelmath world of banana republic statistics offices that first ask what result the government wants and then supplies. This chart, taken from data supplied by top Peruvian economist Bruno Seminario of Lima’s Pacific University (and also the guy in charge of leading Peru economics site “Actualidad Económia del Perú”) shows how the current government of Alan García has spun lies into the growth “miracle” of Peru.

What we have here are two sets of monthly GDP calculations for the period 2009 to date. The blue line shows the GDP calculation published by the official stats office INEI for the period. However the red line shows what the GDP results would have been if the INEI hadn’t changed the methodology of its calculations in 2006 when Twobreakfasts came to power.
It’s one of the little snippets of data that gets lost amongst outside observers. In 2006 the INEI went under orders of Twobreakfasts and the head guy was changed to one of García’s favourites. The INEI then set about using a new methodology that it didn’t even admit to until repeatedly challenged on the strange results being offered up in 2009. Not only that, but the old method was a clearly published dataset and calculation that could be tracked accurately by third parties (hence Semanario can still apply the old method and get an correct reading). However the INEI has never published the “new improved” method or explained to anyone outside its building how they now calculate the GDP number that’s fed to the world.
These days the “old method” would give a +7.9% GDP growth headline while the “new improved” offers 9.2%. A difference, but not as much as the papered over period of 2009 when the world and his wife could see Peru was going through the same recession as anywhere else but the INEI cooked the books to make it look much better than reality.

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