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Accuracy of GDP forecasts by economists improving

The Finance Department said the accuracy of gross domestic product growth forecasts published by economists from prominent institutions improved in the fourth quarter of 2018.

Based on the DoF’s analysis among the 10 published estimates in the fourth quarter of 2018, the most accurate forecast was only 0.1 percentage point away from the official estimate (an error of 1.6 percent) compared with the weakest, which was 0.4 percentage point higher than the official figure (off by 6.6 percent).

Only two out of 10 forecasts have errors greater than 5 percent, an improvement from 7 out of 15 forecasts with errors above 5 percent in the third quarter of 2018.

Finance Undersecretary Karl Kendrick Chua said the DOF’s Strategy, Economics and Results Group analyzed the performance of 20 economists and analysts from institutions that regularly announce their forecasts in Manila’s daily newspapers. Not all analysts regularly publish their forecasts.

From 2016 to 2018, quarterly forecast errors averaged 5.6 percent, with 13 out of 20 forecasters scoring an average error of more than 5 percent. The best forecaster registered an average error of 3.1 percent, while the widest margin was 7.2 percent during the period 2016-2018. An error of 5 percent or less is considered a good forecast.

Analysts and economists from the following organizations, listed from most to least accurate, published forecasts for 7 or more out of 12 quarters covered in the DoF analysis. 

They are Security Bank, Ateneo de Manila University, Institute for Development and Econometric Analysis, University of Asia & the Pacific, De La Salle University, Land Bank of the Philippines, BDO-Nomura, Union Bank of the Philippines, Asian Institute of Management, University of Sto. Tomas, DBS Bank, Metropolitan Bank and Trust Co. and ANZ Philippines.

Topics: Department of Finance , gross domestic product , GDP
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