...Argentina set to tumble 22 places on global wealth list
Louis me manda la versión oriyinal del artículo lapidario del Financial Times (subscription only) que hace un rato escuché se comentaba en los medios locales.
No solo fue una dácana afanada, sino que fue de un engaño masivo y monumental. Enjoy:
Revision of figures from Fernández administration suggests 40% chasm in GDP per head.
Commiserations Argentines. You are now poorer than the Chinese, Bulgarians, Azerbaijanis, Belarusians, Turkmen, Mexicans, Malaysians and Gabonese, not to mention your beloved neighbours in Brazil.
All is not lost, though. You are still a smidgen better off than those in Botswana and war-torn Libya.
Argentina’s statistics agency, Indec, will next month publish revised gross domestic product data as a part of an overhaul of official figures produced under the reign of Cristina Fernández de Kirchner, the former president, which are widely perceived as cooked.
The revised data will tell Argentines how wealthy their country really is, rather than how rich the previous regime, in power for eight years until December, claimed it was.
If a joint project between Harvard University and the University of Buenos Aires is correct, the difference is large.
“We are less rich than the former administration tried to show,” says Ariel Coremberg, director of the project, known as Arklems+Land, and an adviser to the new government of president Mauricio Macri. “Since 2007, official economic statistics in Argentina, particularly on consumer inflation and GDP, have been subject to political manipulation.”
Exactly how bad the news is depends on one’s preferred measure. Based on GDP at constant prices, the Arklems team calculates that output was about 12.5 per cent lower in 2015 than the official data suggest, as the first chart shows.
This would reduce GDP from $586bn to around $513bn, based on data from the International Monetary Fund.
However, the previous government did not just manipulate the raw GDP data itself, but also the exchange rate it was measured at, preferring the official pegged rate (9.8 pesos to the dollar in 2015) to the real black-market foreign exchange rate (14.5 just before the currency was freed by Mr Macri in December. A dollar buys 14 pesos now).
Using the real exchange rate, Mr Coremberg and his team calculate that Argentina’s GDP per capita in 2014 was just $7,399, rather than the $12,510 the World Bank says it was that year, based on official Argentine data, a gulf of 40.9 per cent.
This would be enough to send the country spiralling from 56th in the global rankings to 78th, placing it below the countries mentioned above as well as the likes of Suriname, St Lucia and Grenada and the global average GDP per head of $10,739.
Worse still, by this measure Argentines are now poorer than they were in 1998, before the start of the country’s economic downturn that led to its 2001 default, when income per head was $8,303, as the second chart shows.
Factoring in Arklem’s data also throws up a number of other nasty surprises.
According to Indec, the country’s poverty rate fell seamlessly from 50.9 per cent in 2003 to 29.2 per cent in 2006 and 4.7 per cent by 2013.
The Arklems data suggest the initial stage of the decline, to 29.2 per cent in 2006, is correct, but that the real poverty rate has flatlined since then, sitting at 29 per cent as of 2015.
The real poverty rate is nearly 30 per cent. The official figures show 4.7 per cent, nearly the level of Sweden and Norway,” says Mr Coremberg.
The idea fostered by the Fernández government that Argentina was Latin America’s “growth champion”, expanding at Chinese-style rates, also looks a little hollow.
The Indec figures suggest Argentina’s GDP expanded at a compound rate of 99.1 per cent between 2002 and 2012, the fastest rate in Latin America, ahead of Peru at 87.2 per cent and a continental average of 46 per cent.
To be fair the Arklems database does still show decent growth of 71.1 per cent over this period, but that is only enough to place the country third in the region, behind Peru and Uruguay.
Over the period 1998 to 2012, though, the picture looks very different.
Rather than expanding at a compound rate of 62.5 per cent, Arklems thinks Argentina really grew by just 42.1 per cent, placing it rock bottom in Latin America, as the final chart shows.
“Argentina had an impressive recovery from 1998 to 2002 but when you compare peak 2015 to 1998, the last maximum, it grew at only 2 per cent a year instead of Chinese rates of 8 per cent,” says Mr Coremberg.
“Official GDP growth between 2007 and 2015 was nearly 30 per cent [over the eight-year period], but following traditional methods and sources it was 15 per cent.
“The last decade did not show the highest GDP growth in the country’s history. Argentina was not Latin America’s growth champion,” adds Mr Coremberg.
According to Arklems, the prime driver of the overstated GDP data was not the country’s widely derided official inflation data, even though Arklems calculates that inflation between December 2006 and December 2015 was 506 per cent, somewhat higher than Indec’s 133 per cent figure.
Instead, the Arklems team suggest that official growth figures were calculated using erroneous volume figures for indicators such as manufacturing production and trade flows.
“The difference [between the data sets] is not a random event. It’s due to manipulation in every industry,” Mr Coremberg says.