Mid-term Economic Growth Forecasts for the General Public: Uncertainty and forecast errors

This study presents evidence on the general public’s medium-term macroeconomic forecasts, their ex-ante subjective uncertainty, and ex-post forecast errors, using survey data for individuals on their point forecasts of macroeconomic growth five years ahead and their 90% confidence intervals. The results indicate that, first, the public’s medium-term economic growth forecasts were much more accurate than the medium-term forecasts provided by government, private economists, and firms. Second, the ex-post assessment of ex-ante subjective uncertainty did not tend to be excessively high or low, and thus the width of the confidence intervals was reasonable. Third, elderly people tended to make lower economic growth forecasts and to estimate uncertainty at a higher level. Fourth, lower economic growth forecasts were positively related to savings orientation, but no significant relationship was found between macroeconomic forecast uncertainty and savings orientation.