RDP 8302: Economic Forecasts and their Assessment Appendix Extrapolative Forecasts

I.J. Macfarlane and J.R. Hawkins

August 1983

Extrapolative Range = ‘No Change’ ± Average Size of Changes in Past 5 Years

Benchmark Range Extrapolative Range/Range of Forecasts
GDP Growth No Change ASC Upper (U) Lower (L) Actual (A) U>A>L
1978 2.4 2.1 4.5 0.3 2.6 Y   1.1
1979 1.5 1.4 2.9 0.1 4.2     1.1
1980 5.3 1.5 6.8 3.8 1.6     1.3
1981 3.3 1.6 5.1 1.5 3.9 Y   3.3
1982 3.9 1.5 5.4 2.4 −0.3     1.9
  Aver: 1.7
Inflatlon
1978 13.1 3.9 17.0 9.2 7.8     2.4
1979 7.9 2.5 10.4 5.4 10.0 Y   1.6
1980 9.2 2.3 11.5 6.9 9.2 Y   1.5
1981 10.2 2.0 12.2 8.2 11.0 Y   1.7
1982 9.1 1.8 10.9 7.3 11.0     1.0
  Aver: 1.7
Unemployment
1978 333 50 380 280 367 Y   0.9
1979 367 60 420 300 415 Y   2.7
1980 389 65 445 325 406 Y   1.9
1981 406 35 440 370 350     2.1
1982 350 30 380 320 448     0.7
  Aver: 1.7
Current account
1978 2,320 1,090 3,410 400 3,960     2.4
1979 3,070 1,230 4,300 1,840 2,530 Y   2.2
1980 2,090 1,110 3,200 980 3,640     0.9
1981 2,380 1,010 3,390 1,370 7,280     1.0
1982 7,220 1,520 8,740 5,700 8,390 Y   1.0
  Aver: 1.7
Bond rate
1978 9.50 1.1 10.6 8.4 8.80 Y   1.0
1979 8.80 0.4 9.2 8.4 10.08     1.0
1980 10.08 0.8 10.9 9.3 12.60     1.4
1981 12.60 1.2 13.8 11.4 15.00     1.4
1982 15.00 1.6 16.6 13.4 14.00 Y   2.6
  Aver: 1.6

The ‘no change’ figures are based on the latest information available at the time the forecasts were compiled (i.e. September quarter For GDP and CPI, November for current account).