Comparing the BER’s forecasts
Stellenbosch Working Paper Series No. WP23/2013Publication date: 2013
Author(s):
The Bureau for Economic Research publishes annual (and quarterly) forecasts for more than 140 macroeconomic indicators, with a forecasting horizon stretching up to 6 years ahead. These forecasts are generated with the aid of a structural macro-econometric model of the South African economy. The purpose of this re-search note is to test the accuracy of the BER’s forecasts. Also to compare them with other published forecasts according to accuracy, forecast horizon and number of indicators. To determine the level of accuracy, we have calculated the mean absolute errors and the root mean squared errors of the BER’s forecasts for a selection of five economic indicators. These statistics were also calculated for the forecasts of the selected other institutions or models. From these the relative accuracy of the different forecasts were compared to each other and ranked ac-cordingly. The consensus forecast turned out to be the most accurate for the im-mediate year, followed with a narrow margin by the BER. The close proximity of these two forecasts is striking. Other conclusions are that structural forecasting models perform better than mechanical ones for the first two years, but lose their accuracy advantage from the third or fourth year onwards. They also fail to antic-ipate critical turning points in economic cycles.
JEL Classification:C53
Keywords:forecast comparison; forecast accuracy, forecast evaluation, consen-sus forecast, Theil coefficients, mean absolute error, root mean squared error, loss function
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Upcoming Seminars
Monday 21 July 202512:00-13:00
Izak Odendaal: Old Mutual Wealth Chief Investment Strategist
Topic: "Diverging fiscal policies and what it means for markets"
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Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
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11 Jul 2025 Global trade risks resurface as SA faces new US tariffsThe US began issuing letters this week to announce new reciprocal tariffs, with South Africa among the first recipients. While President Donald Trump extended the implementation date to August 1, he warned that this would be the final delay. It was a quiet week on the data front, though South Africa’s stronger-than-expected factory output stood out...
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