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Peru’s false GDP numbers

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Not content with merely
pointing out the obvious about how Peru’s GDP forecast for 2009 (officially +5%) floats in the realm of the impossible, Farid Matuk has now started another firestorm. The Matuk claim, which is backed up by some very solid statistical work, is that Peru’s GDP didn’t grow by the announced 3.14% in January but just 0.1%, the difference in the figures created by statistical jiggery-pokery that any serious country would never be able to get away with. Above is the screenprint of the report in yesterday’s La Republica. Here’s Matuk’s blog to find out more (and there’s a lot more).

For me it’s yet another lesson in how the blogosphere trumps the traditional media, providing cutting edge analysis and insight where all around are lax and mediocre mainstream journalists. This is especially true in Peru where the so-called serious dailies, headed up by El Comercio, are a version of Peru on Prozac that reflect the “no problem here, move along now, nothing to see here” line of President Twobreakfasts.

Farid Matuk’s critique of how Peru measures its GDP started at his blog (example post here, but there are more…go explore, hispanophones) and picked up by the centre-left newspaper La Republica, just about the only daily that bothers to criticize the government using facts and not simple reactionary bluster, opens a veritable can of worms that will surely be met by the usual Twobreakfasts defence (first silence then Ad Hom attacks and BS). The moneyline picked out by the Republica sums up the argument:

“The problem is that 70% of the real GDP is not measured in surveys but between four walls”

That ‘between four walls’ expression can be translated as either ‘smoke filled rooms’ or as a black box situation. Basically the point is that the 70% of the components that make up Peru’s GDP calculation are chosen in an arbitrary manner and have little or no scientific rigour. One example of many found by Matuk is the GDP growth added by house rentals in Peru; every month since January 2007 the figure has been +3.54%..not a hundreth more or less for the last 24 calculations. And to stress, that just one example of many many red flags on offer.

Importantly, it’s not just Matuk that is saying these things now, as other highly-respected local economists have chimed in on the issue. For example Pedro Francke of the PUCP (U. Catolica) in Lima says that the INEI (Peru stats office) calculations are “strange and are deeply attention grabbing.” He continues by saying that the INEI “has modified the calculation formulae and applied them to a new database, and the worst is that some of the data have been omitted completely. The INEI is obliged to explain what is happening because we are not seeing managerial transparency.” Today Francke has added to his quotes by writing this article that Spanish speakers will find well worth reading.

Or put throught the Ottotrans™, Peru’s government is making shit up and pretending that the country is growing at a far faster rate than reality. This comes as no surprise to anyone that watches the country closely. It also comes as no surprise that the IMF endorse these phony numbers for that body has a nefarious history of pumping its posterboy du jour, as anyone who remembers the praise heaped upon the Argentina of Carlos Menem by the IMF will quickly and easily remember.

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