Evaluating the Reserve Banks forecasting performance

This paper attempts to answer 3 questions about our forecasts: 1. Are our forecasts unbiased? Unbiased forecasts are neither persistently too high or too low compared to the actual data outturns. 2. How accurate are our forecasts? The accuracy of forecasts measures how large average forecast errors are, irrespective of whether the forecast was too high or too low. 3. How do our forecasts compare to: a benchmark forecast — we compare our average forecast errors to those from a simple forecasting model, which acts as a reference point. the big 4 private banks’ forecasts over the COVID-19 pandemic period.