Treasury forecasts: the tendencies and consequences of inaccuracy

In this study, Liam Ward-Proud analyses the accuracy of Treasury budget forecasts for GDP growth by comparing them with the ensuing growth. Examining three different types of forecast, some key trends are found in relation to the correlation, absolute errors and a bias towards overestimation in the sampled forecasts. The consequences for fiscal planning are then spelled out and a solution for mitigating the damage of inaccurate forecasting is put forward.

Read the report here.