20090522 – Doubts grow about accuracy of Peru GDP numbers

By Terry Wade

LIMA, May 22 (Reuters) – Official statistics on economic growth in Peru may be too optimistic and painting a picture showing economic expansion when in fact the Andean country is in a recession, two Peruvian academics said.

Peru’s statistics agency, the INEI, started working with a new methodology for calculating gross domestic product in 2007, and its results sharply diverge from the previous model.

Bruno Seminario, an economics professor at the Universidad del Pacifico in Lima who has taken current data and run them threw the old model, says Peru’s economy is in fact shrinking at a time when President Alan Garcia says his country is largely sidestepping fallout from the global downturn.

“This change (to a new methodology) has generated so many distortions that nobody knows what’s going on,” Seminario told Reuters in an interview on Friday.

INEI director Renan Quispe, who declined to comment for this article but in the past has insisted he has “improved” the method for calculating GDP, has measured growth at 3.14 percent in January, 0.19 percent in February, and 3.05 percent in March using his new methodology.

But Seminario said that when the INEI’s previous model is used, the numbers look much worse and show economic contraction of 0.51 percent, 1.38 percent, and 1.71 percent in each of the first three months of this year.

He said Peru is suffering a recession similar to the one it fell into after the 1997-8 Asian financial crisis, and that Peru’s economy has ground to a halt after surging nearly 10 percent each of the last two years on a boom in commodities prices.

Seminario said the results produced by the new methodology the INEI is using are counterintuitive at a time when other indicators and countries that rely on commodities exports are suffering sharper declines.

The current slowdown has caused critics to take a closer look at official GDP numbers.

Economists also complain that the new methodology is a bit of a black box, wasn’t subjected to a public comment period by independent statisticians before being introduced, and that the official results suggest a series of flimsy assumptions were put into the new model.

“Nobody’s seen the survey or the deflators,” Seminario said. “The only sensible thing to do is for the INEI to publish both series of numbers.”

He isn’t the only critic.

Farid Matuk, the former head of the INEI who was fired from his job after Garcia took office, has also written that he thinks the numbers are inflated.

He has even gone so far to say that the government has filed several lawsuits against him in retaliation for criticizing the GDP numbers.

Garcia’s chief of staff, Yehude Simon, denied that the lawsuits were politically motivated, local radio reported on Friday.

Critics say the INEI is being imprudent by deriving some key numbers from estimates, instead of actual surveys.

Still other critics have compared Garcia’s administration to the Kirchner governments in Argentina, which private economists have criticized for manipulating official statistics for political ends.

“The strategy to alter part of the measurement of GDP is misguided because the sectors ‘other services,’ commerce, construction, among others, are measured between the four walls of the INEI,” Matuk has said.

http://www.reuters.com/article/economicNews/idUSN2237155420090522

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Peru Faces Controversy about Census

Lima, Oct 21 (Prensa Latina) A national population and housing census will be carried out on Sunday in Peru, amid controversy, regional conflicts, and even a religious conflict.

 

INEI, National Statistics and Computing Institute ex head Farid Matuk ratified his criticism to the census, after President Alan Garcia tried to discredit him, accusing him of fugitive, due to a trial against him for supposed mismanagement.

 

 

Matuk held that the census is unnecessary, its methodology is obsolete, the personnel in charge is lowly qualified, and it is only oriented to hinder the annual polls planned in a previous census that will be used to verify the real progress in social issues.

 

 

The president was obliged to call the people to leave aside any eagerness for convenience, and collaborate with the census, due to its importance for social programs.

 

 

He referred to general rejection of the irreplaceability order, given by the INEI for Sunday, for the citizenry to remain in its homes, which was changed for a recommendation, accompanied by prohibition of public transportation and businesses.

 

 

Meanwhile, several municipalities and provinces of the southern regions of Cusco, Ayacucho, Tacna, and Moquegua rejected the census, because they consider that it could affect the lawsuits about adjoining lands with other jurisdictions.

 

 

The Defense Front decided that the population of Moquegua did not participate in the census, a decision criticized by President Garcia, who warned that the mentioned area would be left out of the social programs.

 

 

Representatives of the Protestant Christian churches criticized the president for having exhorted the population to not answer the census question about the religion they profess, because that is relevant to convictions, of which nobody should be questioned about.

 

 

Peruvian Protestan Pastor Fraternity President David Cauracuri said the presidential declaration was inopportune, and called to ignore it.

 

 

iom mrs

http://www.plenglish.com/article.asp?ID={E3B41631-AF1C-4FA7-B68E-D3AAC0AC5033})&language=EN

Sat Apr 5, 2003 7:18 am

Extraña prótesis

Bruno, en el conversatorio que tuvimos en el Central, sostuviste
que si se construía un índice de cantidad con tan sólo aquellos
sectores que se medían sin regla de tres, este índice tendría un
fuerte peso del sector primario.

Si sumamos Agropecuario, Pesca, Minería, Manufactura, y Servicios
Básicos (Electrcidad y Agua), tenemos 30.9% del PBI base 94; de este
porcentaje el sector primario (Agropecuario, Pesca y Mineria) es
13.0%, monto que no percibo como exagerado aunque quizas para ti si.

Pero lo curioso es que descomponiendo el índice total entre el
cuerpo (30.9%) y la prótesis (59.4%), y el saldo es la diferencia
entre precios básicos y precios comprador; no existe homogenidad de
grado uno como lo creía hasta hace unos días, sino que mas bien la
prótesis funciona como una señal amplificada del cuerpo, al menos en
Enero y Febrero del presente año.

Esto sería nuevo en términos analíticos, pero permitiría explicar
lo que comentaste en el conversatorio de la Católica donde señalaste
que la recesión 88-89 estuvo sobreestimada, y aunque coincidia
contigo no veía como podía ocurrir ello en la hoja de cálculo.

Una primera intución, se me viene del libro de Passinetti, donde
se vincula la tasa de crecimiento de una economía con la única raíz
característica positiva de la insumo producto de la economía en
cuestión, si esto fuese así, las hojas de calculo publicadas por el
Instituto que serían una suerte de X*(I-A)^-1 estarían
sistemáticamente amplificando la señal de la parte baja de una
matriz insumo producto triangular en bloques, donde el bloque
independiente sería el 30.9% en cuestión.

Farid Matuk

http://groups.yahoo.com/group/MacroPeru/message/2744

Peru says got GDP math wrong for 15 years

By Jude Webber

LIMA, Peru, Oct 29 (Reuters) – Peru has admitted it has been reporting its key economic indicator, gross domestic product growth, wrongly for the past 15 years and will publish only partial data from now on until it can correct its sums.  Farid Matuk, who took over as head of the government’s  National Statistics Institute (INEI) in August, told reporters late on Monday it had been a mistake to publish GDP data on a monthly basis since 1987, when every other country in the world except Canada and Finland published quarterly, because monthly figures contained a wide margin of error. Furthermore, he said the way the monthly figures were calculated had also factored in a “false illusion” of the performance of the service sector, meaning that the official data “was not solid” and could not be trusted.
 

INEI will therefore strip the service and trade segments out of its GDP numbers for the next few months, leaving a snapshot of the performance of only around half of Latin America’s No. 7 economy, which is worth around $54 billion on current reckoning and leans heavily on mining and fishing. “I can’t produce erroneous information. I’d rather partial data that is clear than full data that is murky,” Matuk said. While it rebases its index and sorts out its methodology, INEI will publish only what Matuk called “hard figures” on the detailed monthly output of goods in the primary and secondary sectors — agriculture, fishing, mining, manufacturing, utilities and construction — plus tax data. Data for trade and “other services,” which covers mainly transport, financial and public sector services will go.The first set of new-look figures, called “gross value added production,” is due out next week, for September. The government of unpopular President Alejandro Toledo says Peru’s economic performance is stellar in a crisis-wracked region, and is forecasting growth of at least 3.7 percent this year, compared with 0.2 percent in 2001. According to current calculations, GDP grew 3.8 percent in August and 4.1 percent in the first eight months compared with the same 2001 periods.

 

NEW 2001 BASE

Once INEI has sorted out its sums, it will switch to reporting complete GDP numbers, but on a quarterly basis. Matuk said INEI would revise its 2001 GDP data in the next few weeks, according to the current 1994 base year and method of reckoning. But it will not publish full 2002 GDP data – that will be up to the economy ministry and central bank.  He hoped that by July 2003, INEI would be ready to publish the total value of Peru’s economy, in dollar terms, according to a new 2001 base, followed by quarterly GDP data. That was likely to have a delay of six months to begin with. “There was a lot of resistance within INEI (to the new method of calculation),” Matuk said. “But either we perpetuate the fiction or we sort out the information, and I think sorting out the information is the right thing to do.”

Current GDP data uses information provided voluntarily by some 30,000 companies, but Matuk said INEI also had extensive data from household and employment surveys from nearly 40,000 homes nationwide that would help complete the picture. France’s national statistics agency is providing the software for the new calculations, and is sending a team of experts to Peru next month to help INEI get to work. Matuk said Peru was also working with other countries on a World Bank project to harmonize calculation of purchasing power parity by 2005 based on a basket of 4,000 universal goods.

 

 

((Lima newsroom, tel: +511 221 2130, fax +511 221 2133, e-mail: lima.newsroom@reuters.com)) REUTERS