Etla’s Forecast Errors in 2014–2017

In forecasts for years 2014–2015 the Finnish GDP growth was overestimated, and in forecasts for years 2016–2017 it was underestimated. From 2013 to mid-2015 the forecasters anticipated that the recovery in the world economy, and correspondingly in the Finnish economy, would have been stronger than what was realized. In winter 2015–2016 there was a stock exchange crash in China that created uncertainty in the whole world. Forecasts concerning the world economy were generally lowered. This was one reason for the overly pessimism in the early forecasts concerning the Finnish GDP growth for 2016 and 2017. In Finland concern caused also the past unsatisfactory export performance and the deterioration of the cost competitiveness. Additionally, it was difficult to estimate, how the economy will recover from the end of mobile phone production in Finland. In forecasts for the development of the private consumption, the main difficulty was forecasting the steep drop in the savings rate to a clear negative territory.