August, 2008

July 2008

Comment

Economists are never that keen on comparing previous forecasts with what has actually happened. This is understandable. Usually the defence against the accusation that economics is a dismal science is that it is not always that dismal - but we also know it is not always that scientific either. This year we have seen plenty of revisions to prior forecasts. In June 2007, the Reserve Bank was picking that annual consumer price inflation would average 2.6 percent for the second half of 2008. Now they say that inflation for the September 2008 quarter will be around 5 percent. Last year the consensus forecasts for March 2009 were for annual GDP growth of 2.4 percent and annual CPI of 2.6 percent. By June this year, the forecasts for March 2009 had changed to 1.0 percent GDP growth and 3.9 percent lift in annual CPI.