Okay, we have removed the original post here because we were taking just too much heat, life’s too short and we’d even started to question the (political) motives of the anonymous source.
But we’ve left the comments, so people can continue the debate if they like.
Backstory: a piece of analysis has been doing the rounds in Madrid and London questioning the veracity of various Spanish economic statistics. Right-wing Spanish media got wind of it on Thursday and somewhat bizarrely broadcast it as having been endorsed by the FT.
For the record, this was not the case.
We carried excepts from the analysis and tried to get some explanation for apparent anomalies in the numbers — but without much success. The Instituto Nacional de Estadística didn’t get back to us with a detailed response, and the Finance Ministry fumed.
In the meantime, as the dialogue below indicates, everyone’s gone nuts.
For those still interested, here are some further ideas we’ve heard from a Spanish economist, that may help explain the discrepancies. First off, as noted in the previous post and by some of our astute readers, the growth in Spain’s grey economy is thought to explain a lot of the ‘funniness’ highlighted in the report. The Market Services Gross Value Added (GVA) figure takes into account black economy estimates, while the Indicator of Activity in the Service Sector (IASS/SSAI) does not.
Secondly, the IASS and GVA correlated closely during the boom time, since it was driven by construction, which was leading import demand. When the recession began circa 2007, it was Spanish construction that was hit hardest. People stopped buying, imports fell. The IASS includes imports and was hit hard, but the GVA does not and so stayed the same.
Most significantly, there’s talk of a methodology change in the way the IASS was calculated around 2008/2009, which could account for the divergence between the two figures. Some sectors that were construction were shifted into the services category and may have affected the GVA/IASS relationship.
Phew. We need a drink.