Reasons to doubt official economic forecasts
Here’s a chart, which comes from the Zsolt Darvas of the Breughel think tank, showing how the International Monetary Fund has repeatedly downgraded its growth forecasts for Greece.
I recommend that readers file this graphic and brandish it the next time they hear someone argue that things are going to turn out OK because the IMF says so.
While they’re at it, they might also want to store this from the Bank of England’s August Inflation Report too, showing just how spectacularly wrong the Monetary Policy Committee was last year about the UK outlook:
The MPC always stresses that we should look at the full range of probabilities in their fan charts, rather than just taking the thick green line as their central forecast. Well, in May 2011 they put a 0% probability that growth would be as weak as it has actually turned out.Tagged in: bank of england, greece, imf, MPC
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