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Comparing the BER’s forecasts


  • Nicolaas van der Wath

    () (Bureau for Economic Research)


The Bureau for Economic Research publishes annual (and quarterly) forecasts for more than 140 macroeconomic indicators, with a forecasting horizon stretching up to 6 years ahead. These forecasts are generated with the aid of a structural macro-econometric model of the South African economy. The purpose of this re-search note is to test the accuracy of the BER’s forecasts. Also to compare them with other published forecasts according to accuracy, forecast horizon and number of indicators. To determine the level of accuracy, we have calculated the mean absolute errors and the root mean squared errors of the BER’s forecasts for a selection of five economic indicators. These statistics were also calculated for the forecasts of the selected other institutions or models. From these the relative accuracy of the different forecasts were compared to each other and ranked ac-cordingly. The consensus forecast turned out to be the most accurate for the im-mediate year, followed with a narrow margin by the BER. The close proximity of these two forecasts is striking. Other conclusions are that structural forecasting models perform better than mechanical ones for the first two years, but lose their accuracy advantage from the third or fourth year onwards. They also fail to antic-ipate critical turning points in economic cycles.

Suggested Citation

  • Nicolaas van der Wath, 2013. "Comparing the BER’s forecasts," Working Papers 23/2013, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers199

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    References listed on IDEAS

    1. Philip Hans Franses & Rianne Legerstee & Richard Paap, 2017. "Estimating loss functions of experts," Applied Economics, Taylor & Francis Journals, vol. 49(4), pages 386-396, January.
    2. David Mortimer Krainz, 2011. "An Evaluation of the Forecasting Performance of Three Econometric Models for the Eurozone and the USA," WIFO Working Papers 399, WIFO.
    3. Meese, Richard A. & Rogoff, Kenneth, 1983. "Empirical exchange rate models of the seventies : Do they fit out of sample?," Journal of International Economics, Elsevier, vol. 14(1-2), pages 3-24, February.
    4. Clemen, Robert T., 1989. "Combining forecasts: A review and annotated bibliography," International Journal of Forecasting, Elsevier, vol. 5(4), pages 559-583.
    5. Jan Kmenta & James B. Ramsey, 1980. "Evaluation of Econometric Models," NBER Books, National Bureau of Economic Research, Inc, number kmen80-1, December.
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    Cited by:

    1. Nicolaas van der Wath, 2016. "Gauging financial conditions in South Africa," Working Papers 10/2016, Stellenbosch University, Department of Economics.

    More about this item


    forecast comparison; forecast accuracy; forecast evaluation; consen-sus forecast; Theil coefficients; mean absolute error; root mean squared error; loss function;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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