Pave: Hyped Economy IX

Le jour 544 de Sarko

Why do they even bother? [Long pause.]

First this little procession of headlines.

FRANCE'S SARKOZY COMMITS TO
2.5-3 PCT GROWTH TARGET FOR 2009
PARIS September 21, 2007
(Forbes/AFX/Thomson Financial)

FRANCE'S LAGARDE SEES FRENCH GDP GROWTH
BETWEEN 1.75 PCT AND 2.25 PCT IN 2009
PARIS September 21, 2007
(Forbes/AFX/Thomson Financial)

LAGARDE SAYS UPTURN FOR FRENCH ECONOMY
A POSSIBILITY FROM H2 2009
PARIS July 15, 2008
(FinanzNachrichten.de/Thomson Financial)

Time to toss 2009 to make way for 2010 happy-talk.

FRANCE MAY LOWER 2009 GROWTH FORECAST

PARIS October 20, 2008 (Forbes/AP) - "It is very probable that growth in 2009 won't reach 1 percent and that we will have to revise our forecast," Finance Minister Christine Lagarde told the lower house of parliament as it begins debate on the budget.

Lagarde unveiled her 2009 budget Sept. 26 based on a forecast of 1 percent growth next year. The International Monetary Fund forecasts French growth of 0.2 percent next year.

One percent? What happened to Sarko's 3%, here off by a whopping 66%? Or Mdm. Lagarde's 1.75% (you see, you really needn't bother with the high end number), off by 43%?

FRANCE SLASHES 2009 GROWTH FORECAST

PARIS November 6, 2008 (Expatica/AFP) - France on Thursday slashed its economic growth forecast for 2009 to 0.2-0.5 percent from 1.0 percent blaming fallout from the global financial crisis. Economy and Finance Minister Christine Lagarde told the Senate that the forecast for 2010 had been cut to 2.0 percent from 2.5 percent.

... The minister said that growth forecast for next year was "the lowest ever used by a government in France" but that it was realistic.

That makes Sarko's forecast off now by 90+%, Mdm. Lagarde's off by 80+%. Some will object that economies are buffeted by events, catastrophes. Yes, but they are equally buoyed by developments, breakthroughs. The point of a forescast is to weigh such possibilities and realistically assess probable outcomes.

Even giving the French government a pass on the 2008 global financial crisis, its string of miscalls on French growth over the years simply defies probability. That is to say the inflated forecasts are likely deliberate, meant to talk up an economy that doesn't perform.

We have been following French growth forecasts since 2003. In that time France has not made one annual target forecast. Not a single one.

We have explained elsewhere the discredited tricks of the Finance Ministry: issuing a growth range, talking up the high end with no prospect of making the low end; and, when the current year's low end fails to materialize, switching the discussion to next year's forecast.

The French government could save itself considerable embarrassment if it made no forecasts at all. Instead it could issue official wish targets based on what is needed to keep France puttering along. [Pause.] Alright. Nothing new there.

PFFT (What is this?): Latest busted forecast 5 | Tired French tricks 4½ | Rayonnement français 0