Sorceronomics

Forecasting brujonomist

Argentinean economist Atilio Borón publishes today at his blog two articles by R. Navarro under the title of Brujonomics, which I have translated as Sorceronomics (Sp. brujo: sorcerer, warlock, + Eng. -nomics from economics). The articles come from the economic supplement of Página 12, with a brief preface by Borón himself.

The articles are quite funny in a sense but they are specially a denunciation on how officialist Neoliberal economists forecast based on their ideology and who writes their paychecks. 

To synthesize, let's see the actual data of Argentina for 2010:

• GDP growth: almost 9%
• investment growth: 17%
• budget deficit surplus: 2.7%
• unemployment: 7.5%

And now the forecasts a year ago (compare and laugh - or maybe cry):

Miguel Ángel Broda:

• GDP growth: 3.5% (thanks to external influences only)
• investment growth: 2.0%
• deficit: 2.5%
• unemployment: 11.1%

Mario Brodersohn:

• GDP growth: not more than 4%
• deficit: 1%
• unemployment: 11%

Orlando Ferreres:

• GDP growth: not more than 3%

Carlos Melconian (who was considered for the Ministry of Economy by former president Ménem and run against Néstor Kirchner for the Peronist presidential nomination):

• GDP growth: maybe 3% (only because international circumstances - the model is exhausted)

There are others still that claimed that there is not enough electricity to produce more (when electrical production has doubled in the last 8 years and is now in excess to the demand) and the like. All with the implicit idea that, in order to grow, Argentina needs to get rid of the Kirchnerist presidents, who are carrying on classic social-democrat policies with important state intervention. 

But it is not just Argentinean economists who need to clean their crystal balls or maybe get new ones altogether, international ones also fail:

The International Monetary Fund (IMF) missed again by a lot:

• GDP growth: 3.5% (3% for 2011, almost impossible to happen after this excellent year)

The IMF also missed in regards to the whole Latin America, forecasting a growth of 4%, that in reality has been more than 6%.

Nouriel Roubini:

• GDP growth: not more than 2.5%
• investment growth: low
• also high inflation, blah, blah...

Debt qualification agency Moody's (maybe the less reliable of the three big ones?):

• GDP growth: not more than 2%

They also insisted on the unrealistic conjectures on lack of enough electric supply.