WATCH: The art and science of economic forecasting

“Forecasting: the attempt to predict the unknowable by measuring the irrelevant; this task employs most people on Wall Street.”

The words of Jason Zweig, author of the Devil's Financial Dictionary, are partly true of many so-called investment experts. We hear a lot from financial forecasters every January, as strategists prognosticate on what’s in store for markets for the year ahead, even though decades of research confirms the prediction game is a pretty fruitless one. Often economists get it wrong but when they get it right consistently, in a world that is so volatile after Covid-19, its worth stopping to acknowledge the achievement.

And so it is with Bureau for Economic Research chief economist, Hugo Pienaar, who received the SA Economist of the Year award for his forecasts in 2021. Entrants for the prize submit monthly forecasts of eight economic variables and the winner is the economist whose forecasts were consistently closest to the actual figures. Michael Avery talks to Pienaar.

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