OFFICIAL OPTIMISM
Treasury sticks to its growth expectations
Since 2012, the economy has grown far slower than Treasury’s projections
Treasury says that it expects the economy to have expanded just 0.5% in 2016 and growth will improve to 1.3% in 2017, projections that remain unchanged since October’s medium-term budget policy statement but are more optimistic than those of economists and the IMF. Since 2012, the economy has grown far slower than Treasury’s projections, figures compiled by Business Day show. For example, in the 2012 budget, Treasury forecast real GDP growth for fiscal 2014 of 4.2%. A year later, it forecast it would be 3.5%, and in the 2014 February budget it predicted it would be 2.7%. The actual figure for real economic growth for 2014 was 1.5%. Treasury conceded in last year’s budget review that its outer year forecasts have proved over-optimistic. Treasury’s projections appear optimistic compared with those of 22 economists polled by Bloomberg News in February. They predicted the economy would expand just 0.4% in 2016 and 1.2% this year, as their inflation forecasts hovered close to the upper b...
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