Cristina continues to sell Argentina down the river

[expatinowncountry]

Not to kick a dead horse, just thought some people might find the article bellow relevant.


More Data Manipulation: Argentinian GDP is another inflated index
http://brazilianbubble.com/more-manipulation-argentinian-gdp-is-another-inflated-index/

Just for your information, a consulting company like Ecolatina (that like Krugman has its political agenda) could never has access to the wealth of information required to estimate the real GDP (please take a look to the National Account Manual published by UN for you to understand what we are talking about). So at most, their numbers are educated guess based on a bunch of assumption that may hold or not (they don't). Coming back to my point, the (composed) accumulated GDP figure since 2007 maybe 4-5% lower than the reported by the government. This is a back of the envelope estimation but for sure with the same scientific rigor of Ecolatina and without the political agenda.

I think it is dangerous practice to take whatever you read in Internet as true... specially if it comes from a site called brazilianbubble.com

 

[andrewjps]

Here are some of the stats from the IMF who unlike brazilianbubble.com are a pretty reliable source, if anything not in favour of the Kirchner administration. If you note page 31, the real GDP for Argentina this decade has been the second largest behind Peru. Of course some may argue because of the crisis there was a lot of room for growth, and this is true, but it still remains growth has been impressive. There are some other interesting stats in the report also which blow away some fallacies.

http://www.imf.org/external/pubs/ft/reo/2012/whd/eng/pdf/wreo0412.pdf

Another interesting report shows that China only accounts for 1 percent of direct investment in Latin America (led by The Netherlands, Japan, US and Spain). This may go some way to contradicting the common belief that Latin America is riding the Chinese wave. Yes, they are still selling commodities to China but not a lot. Only 12% of Argentina's real GDP growth in the last decade was due to exports And just a fraction of this 12% was due to commodity exports, including soybeans.

http://www.cepal.org/publicaciones/xml/2/46572/2012-182-LIEI-WEB.pdf


Cue free market nutters talking rubbish... I'm off to enjoy this great country.

 

[expatinowncountry]

Here are some of the stats from the IMF who unlike brazilianbubble.com are a pretty reliable source, if anything not in favour of the Kirchner administration. If you note page 31, the real GDP for Argentina this decade has been the second largest behind Peru. Of course some may argue because of the crisis there was a lot of room for growth, and this is true, but it still remains growth has been impressive. There are some other interesting stats in the report also which blow away some fallacies.

http://www.imf.org/external/pubs/ft/reo/2012/whd/eng/pdf/wreo0412.pdf

Another interesting report shows that China only accounts for 1 percent of direct investment in Latin America (led by The Netherlands, Japan, US and Spain). This may go some way to contradicting the common belief that Latin America is riding the Chinese wave. Yes, they are still selling commodities to China but not a lot. Only 12% of Argentina's real GDP growth in the last decade was due to exports And just a fraction of this 12% was due to commodity exports, including soybeans.

http://www.cepal.org/publicaciones/xml/2/46572/2012-182-LIEI-WEB.pdf


Cue free market nutters talking rubbish... I'm off to enjoy this great country.

Andrew,

With all due respect, I thought it was clear by now that IMF statistics=World Bank statistics=Argentine statistics... so if we agree that Argentina data is not reliable since 2007 then IMF isn't as they received the data from the Argentine government. That is why starting the second semester of 2012 the IMF will not longer report them.

Regarding the CEPAL report, I worked on it so I can tell you a bit more. Yes, Chinese FDI is very low in LAC so far (but you need to understand the difference between FDI flows and stocks) but you are making a logical jump in your conclusion. Where do you get your 12% of 12% thing? First it does not matter, how much China buys from Argentina but the effect China has on international markets because that increases the prices irrespectively if it buys from Argentina or not and Argentina can sell it at a higher price to everyone. Second, you need to distinguish between what is export of raw materials (including soybean) and what CEPAL calls MOA (Manufacturas de origen Agropecuario) like soycake (used to feed the chicken and pigs Chinese will later eat) and soybean oil. Third, you need to have more information on Argentina's (and LAC) economic history of stop and go... these countries do not produce everything and they need to import capital goods and intermediate goods to do their production... to buy imported goods you need dollars... and those come from the agro exports... so the indirect effects of the agro exports (including soybean) in the level of economic activity is very large. I could continue but I have to go to work... basically your statement is not correct. What you would like to say is that the value of the agro exports is around 60-70 billon dollars. In a country of 40 millon people, that makes something like 1,700 per capita in a good year. If Argentina's per capita GDP is around 12K, then the agro exports generates less than 15% of the per capita GDP. So you may conclude that the statement that this country is only soybean is not accurate. On the other hand, around 30% of the government revenue (and close to 90% of the dollar supply) come from taxes on the agro exports... so it is extremely important for the government.

I hope this helps.

 

[andrewjps]

Thanks for that expatinowncountry. I'm not an economist (obviously) and you above post is enlightening and I appreciate it.

Have you a source on a reliable GDP growth figure? I know this would all be guesswork due to inflation stats being fudged, but what would be your educated guess?

Also, your last point is interesting. I did not know this. Therefore these kinds of regulations are very important in keeping the economy afloat. If the nation heads into a 'free trade' model, they are fucked because they lose this significant amount of income?

 

[expatinowncountry]

Thanks for that expatinowncountry. I'm not an economist (obviously) and you above post is enlightening and I appreciate it.

Have you a source on a reliable GDP growth figure? I know this would all be guesswork due to inflation stats being fudged, but what would be your educated guess?

Also, your last point is interesting. I did not know this. Therefore these kinds of regulations are very important in keeping the economy afloat. If the nation heads into a 'free trade' model, they are fucked because they lose this significant amount of income?

As the government has the monopoly of information to estimate the GDP figures we are in clear disadvantage to get the correct figure. In the case of the cheating with the inflation rate we are lucky because some provincias (Mendoza for instance) has not changed the methodology and they estimate their province level inflation and they get numbers like 25% so it is not possible that inflation is always 10-12% in Buenos Aires and 25% in Mendoza because it will means Mendoza is more expensive than Zurich to say something. So we are all doing educated guess about who much GDP figures are inflated looking to indicators of real activity (construction permits, electricity consumption, volume of exports, etc). Something we know for sure... in 2009 the government said that this country was protected from the global crisis because has a low positive growth rate (0.3%) when everyone has large negative numbers... given the cheating probably that +0.3% was more like -0.5%.

The tax system is fucked in this country. It is very easy to collect taxes on exports so they do it. It is also easy to collect consumption taxes (sales tax or VAT) but it is already 21% so there is no more room there. They use the export tax to keep domestic prices low... like in the case of beef but the people in the government has no idea of economics... if you keep a price artificially low, the producers stop producing. So Argentina has now half the number of cows it uses to have ten years ago and the quality of the beef has deteriorated. We all know Argentina for its beef and these morons are destroying this brand name.

 

[nicoenarg]

Therefore these kinds of regulations are very important in keeping the economy afloat. If the nation heads into a 'free trade' model, they are fucked because they lose this significant amount of income?

What regulations are you talking about, specifically?