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Review of Economic Perspectives

Národohospodárský obzor; The Journal of Masaryk University

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Volume 15, Issue 3 (Sep 2015)

Issues

The accuracy of alternative GDP growth forecasts: Do they represent a credible alternative to the official ones?

Jiří Šindelář
Published Online: 2015-10-20 | DOI: https://doi.org/10.1515/revecp-2015-0021

Abstract

The paper deals with the accuracy of the real GDP growth forecasts produced by two Czech non-governmental institutions: the Czech-Moravian Confederation of Trade Unions (CMKOS) and the Czech Banking Association (CBA) in the years 2007-2014 and 2011-2014 respectively. Utilizing a research method composed of simple (AFE), scale-dependent (RMSE) as well as relative (MASE) error measures, we found out that (i) CMKOS predictions achieved a lower forecasting error on average, beginning with a notable overestimation in the first turnover point from growth to decline (2008-2009), yet followed by gradual improvement resulting in superior accuracy over set benchmarks (Ministry of Finance, Czech National Bank, OECD) in later years (2010-2014). The CBA predictions, on the other hand, exhibited (ii) a high level of interconnection with official bodies (MF, CNB), but with overall inferior forecasting accuracy, despite the shorter time frame (2011-2014). Overall, the study suggests that of the two surveyed non-governmental bodies, only CMKOS forecasts represent a viable alternative to the official predictions published by the Ministry of Finance or the Czech National Bank, as CBA forecasts were found to be a less accurate satellite of these bodies.

Keywords: GDP forecast; Scale-dependent error measures; Relative error measures; Alternative macroeconomic forecasts; Czech-Moravian Confederation of Trade Unions; Czech Banking Association

JEL Classification:: E37; E66; H68; O47

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About the article

Received: 2015-05-26

Accepted: 2015-09-01

Published Online: 2015-10-20

Published in Print: 2015-09-01


Citation Information: Review of Economic Perspectives, ISSN (Online) 1804-1663, DOI: https://doi.org/10.1515/revecp-2015-0021.

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© 2015 Jiří Šindelář, published by De Gruyter Open. This chapter is distributed under the terms of the Creative Commons Attribution 4.0 Public License. BY 4.0

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