Forecast errors made against first outturns
for GDP have been taken for all quarterly forecasts made since the beginning of 1982, and the Root Mean Squared Deviation (RMSD) of these errors has been calculated for each of the nine quarters from the beginning of the year before that being forecast to the first quarter after the end of the year being forecast.
Figures 1-3 plot the Root Mean Squared Deviations (RMSD) of forecast errors for year T made in Institute forecasts in each quarter of T-1, in each quarter of T and in the first quarter of T+1 before first outturn
. The figures also include the standard deviation of the variable being forecast over relevant periods.
The accuracy of the forecast improves over time as the outturn
The fit of the regression has barely deteriorated with the imposition of the restrictions and the coefficient suggests that the Federal Reserve adjusted its forecast of GDP growth in the coming year by about a third of the unexpected component of the latest estimated outturn
, other things being equal.
As we examine forecasts produced up to 2003 for outturns
up to 2004 we are comparing forecasts for the Retail Price Index excluding mortgage interest payments (RPIX).
This provides a stricter test of forecasting performance than the use of forecasts for growth in a calendar year since the latter contain an important element of estimated outturn
On average, the forecast figure has been lower than the outturn
figure, meaning that duty increases on items such as petrol have been lower and pension rises higher than they might otherwise have been, he said.
said that the February inflation outturn
continued to support the BSP's outlook of within-target inflation over the next two years.
These showed profits of pounds 14.5 million on a continuing basis - similar to last year's outturn
- on gross sales five per cent ahead.
The January inflation outturn
is below the Government's inflation range target of 3.0 percent +- 1.0 percentage point for 2016.