Comparing the Predictive Accuracy of Macroeconomic Forecasts for Austria from 1998 to 2006

This study for the first time presents an analysis of the predictive accuracy of all forecasts available for the Austrian economy. To be precise, the fall 1998 to fall 2006 forecasts of the following three national and three international institutions are compared: the Oesterreichische Nationalbank (OeNB), the Austrian Institute of Economic Research (WIFO), the Institute for Advanced Studies (IHS), the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF) and the European Commission. The forecasts of the various institutions tend to paint a relatively similar picture of the economy. As a case in point, all institutions markedly underestimated both the magnitude and the duration of the 2001 slowdown. Credit for the most accurate forecasts is due to the national institutions; none of the international institutions reach or significantly surpass their performance. WIFO posts the smallest error in the GDP forecasts for the current year, the OeNB for the year ahead. The OeNB outperforms all institutions in predicting inflation, recording the smallest mean forecast error.