In his column “Mechanics tasked with fixing economy don’t know engines” (October 12) Tim Cohen says the Treasury’s growth forecast is consistently overly optimistic, especially in the outer years.
To make his point, he incorrectly used import growth rates, instead of GDP, to demonstrate the gap between our forecast and growth outcomes. After we pointed out his error, it was corrected online. However, other errors remain. Elsewhere in the article he still uses, incorrectly, 2017 import growth numbers instead of GDP growth and mistakenly compares it to a 2017 estimate instead of the actual growth outcome. A 2013 research note by the Bureau for Economic Research at Stellenbosch University found the Treasury’s growth forecasts to be on par with, or better than, those of private-sector economists, the IMF and the bureau. Next week’s medium-term budget policy statement will show that the forecast error has narrowed substantially since 2014. Forecasting is inherently tricky; what mat...
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