Munich Personal RePEc Archive

Polish GDP Forecast Errors: A Tale of Ineffectiveness

Rybacki, Jakub (2020): Polish GDP Forecast Errors: A Tale of Ineffectiveness.

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Abstract

The aim of this paper is to evaluate gross domestic product (GDP) forecast errors of Polish professional forecasters based on the individual data from the Rzeczpospolita daily newspaper. This dataset contains predictions on forecasting competitions during the years 2013–2019 in Poland. Our analysis shows a lack of statistical effectiveness of these predictions. First, there is a systemic negative bias, which is especially strong during the years of conservative PiS government rule. Second, the forecasters failed to correctly predict the effects of major changes in fiscal policy. Third, there is evidence of strategic behaviors; for example, the forecasters tended to revise their prognosis too frequently and too excessively. We also document herding behavior, i.e., an alignment of the most extreme forecasts towards market consensus with time, and an overly strong reliance on forecasts from NBP inflation projections in cases of estimates for longer horizons.

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