Friday, May 22, 2015

Today's Mexico City Headlines: Another over-rosy official GDP forecast bites the dust. And another quarter goes by with almost no economic growth. Not much of a miracle, this one.

Four of five papers agree that yesterday’s mid-day meteorological phenomenon over the D.F. — a  halo around the sun — is worth a front-page photo. The effect, which you should be able to make out on the Milenio front page shown here, is from rays hitting ice crystals in the atmosphere.
    The pleasing aesthetic touch may have been intended to offset the dreary economic news that all the papers front. Reforma, in its No. 2 headline, describes newly released first quarter GDP figures in the gloomiest terms possible: “Economy has its worst performance.”
    This is sloppy, if not intentionally misleading, headline writing. Read the lead sentence of the Reforma story itself and you learn that the growth rate was the lowest in five quarters — not ever, as the headline implies.
    Still 0.4% GDP growth from January through March is dismal, and it forced the Peña Nieto administration to slash its forecast for annual growth in 2015.
    Excelsior tries to make that sound good with the down-page headline “Mexico will grow between 2.2% and 3.3%: Hacienda.” (Hacienda is the Finance Secretariat, or SHCP, headed by Luis Videgaray, who announced the new forecast.) The headline gives no hint that the forecast in effect until yesterday was for 3.2% to 4.2% growth.
    Two papers lead with the GDP news. Milenio, in what approaches a caricature of its fawning pro-government bent, tells us “Peña and Videgaray see optimistic panorama.”
    The anti-Peña La Jornada could have run the same headline, word for word, and it would have been recognized by its readers as oozing irony. Instead Jornada takes a more explanatory approach: “SHCP: Petroleum at fault for economy slowdown.”
    So now we’re set to enter the middle innings of the ongoing game of musical forecasts, where optimistic official GDP predictions are whittled down as the months pass by until the final real figures remind us that the Mexican Miracle isn’t happening. Growth during the Peña Nieto administration has been consistently anemic, way below that of his predecessor.
     The over-rosy forecasts are in part intended as self-fulfilling prophecies — predicting growth encourages growth. But that’s obviously not working. Why don’t they intentionally lowball the GDP forecasts so the final number might look good? Nothing sounds better than “exceeded expectations.”

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