The 2007-2008 version of the CEPAL "Estudio económico de América Latina y el Caribe" was published this week. This report is one of the most complete annual economics studies of the region and over the years has become required reading (for wonky guys like me, that is).You can get your own copy, free gratis and for nothing, by clicking on this link right here (I'm good to you, am I not?). I'm quite sure this 200 page PDF in dense, financial Spanish is bound to brighten anyone's weekend.
It really is an excellent source of reference, but the word "stupid" crept into the title line because these CEPAL dudes insist on trying to predict (read 'guess') how the regional economies will pan out in the next couple of years. I'm going to use the example of Venezuela, and shock horror you'll be surprised to find out that CEPAL consistently underestimates its economic growth rates. You need to check previous publications for the figures and I've only got them on file in the PC, but I've managed to find some website links that prove the point. Here are the CEPAL prediction numbers in the chart below from 2004, from 2005, from 2006 and 2007.
We see that CEPAL has at least been consistent, as apart from 2004 when they totally miscalculated how quickly Venezuela would rebound from the PdVSA strike and the recall referendum shenanigans, they've missed by about 2% each year, though always to the downside. By simple extrapolation therefore, we can get closer to the suited guys by adding 2% on their FY08 and FY09 guesses. Hey, this prediction game is fun! Let's play more often!Moral of this story: Dismal scientists' reports are good places to find out about what happened in LatAm, not what will happen. Feel free to pass this post on to the next person who tells you Venezuela will only grow 4% in FY09. Fact is, the only thing that affects GDP growth in Venezuela to any great extent is the price of crude oil, so you get a better idea of its growth prospects from the CBOT than you do from economists.
UPDATE: I immediately got a mail about this post from a friend who says "Big deal, they got Vennie wrong". Fact is that they suck regionwide, and here's another chart I've just thrown together from the CEPAL yearly publications showing their predictions for pan-regional growth and how the reality has bitten.
You see? They still suck.