Economic Commentary: How do the Riksbank's international forecasts hold up?
Date
05/11/2015
For a small open economy like Sweden's, international forecasts are vital for the assessment of future economic developments in Sweden. So how good has the Riksbank been at predicting international developments? And how well do the Riksbank's forecasts hold up against those made by other forecasters?
In this Economic Commentary, the Riksbank's international forecasts for GDP, inflation and policy rates over the period 2007–2015 are evaluated. The analysis shows that, on average, the Riksbank's international forecasts:
have overestimated GDP growth and the policy rate have underestimated inflation, albeit fairly marginally have been relatively accurate in the short term (a few quarters ahead) but deteriorate over the longer horizons. stand up well against forecasts from other analysts
Finally, the significance of this for the Swedish forecasts is analysed. This analysis indicates that:
The Riksbank's accuracy in the forecasts for Swedish GDP growth, inflation and the policy rate could, on average, have been about 50 per cent better if there had been no errors in the international forecasts.
Read more in the Economic Commentary: An assessment of the Riksbank's international forecasts.
