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The Accuracy Of General Government Balance Forecasts In Romania

Author

Listed:
  • Mihaela SIMIONESCU

    () (Institute for Economic Forecasting, Romanian Academy, Bucharest, Romania)

Abstract

Economic forecasts are an essential building block for a budgetary anticipation in order to determine the budgetary objectives and to sustain the tax and expenditure plans. In Romania the surveillance process is ensured by the use of budget programs. The aim of this paper is to improve the budgetary planning by recommending the use of the forecasted general budget balance provided by the institution with the highest accuracy during the crisis (2008-2013). More types of projections were analyzed during the recent economic crisis and the IMF forecasts for this indicator outperformed those provided by Dobrescu model and the European Union. Therefore, the recommendation is related to the use of IMF predictions in establishing the next budgetary plan for 2014 and 2015. Moreover, this research also brings improvements in the methodological framework, by proposing some aggregated accuracy indicators (S1, S2, S3 and S measures) for solving the problem of contradictory results of different accuracy indicators.

Suggested Citation

  • Mihaela SIMIONESCU, 2015. "The Accuracy Of General Government Balance Forecasts In Romania," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7(1), pages 167-178, March.
  • Handle: RePEc:jes:wpaper:y:2015:v:7:i:1:p:167-178
    as

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    File URL: http://ceswp.uaic.ro/articles/CESWP2015_VII1_SIM.pdf
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    References listed on IDEAS

    as
    1. Teresa Leal & Javier J. Pérez & Mika Tujula & Jean-Pierre Vidal, 2008. "Fiscal Forecasting: Lessons from the Literature and Challenges," Fiscal Studies, Institute for Fiscal Studies, vol. 29(3), pages 347-386, September.
    2. Diebold, Francis X & Mariano, Roberto S, 2002. "Comparing Predictive Accuracy," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 134-144, January.
    3. Emilian Dobrescu, 2013. "Updating the Romanian Economic Macromodel," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 5-31, December.
    4. Robert Buckle & Kunhong Kim & Julie Tam, 2002. "A structural var approach to estimating budget balance targets," New Zealand Economic Papers, Taylor & Francis Journals, vol. 36(2), pages 149-175.
    5. Jürgen Hagen, 2010. "Sticking to fiscal plans: the role of institutions," Public Choice, Springer, vol. 144(3), pages 487-503, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    general government balance; budget deficit; forecasts; accuracy;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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