Asian Development Outlook Forecast Skill

Publication | February 2014

This paper assesses the accuracy of Asian Development Outlook forecasts against actual outcomes for the years from 2008 to 2011 and against the benchmark of International Monetary Fund's World Economic Outlook forecasts.

The Asian Development Outlook (ADO) provides growth and inflation forecasts for more than 40 economies in the region. This paper assesses the accuracy of those forecasts against actual outcomes for the years from 2008 to 2011. The World Economic Outlook (WEO) forecasts by the International Monetary Fund are used as a benchmark against which to derive a comparative measure of the accuracy of ADO forecasts, or skill.

ADO is found to be 'more skillful' than WEO in estimating both current-year gross domestic product (GDP) growth and consumer price index (CPI) inflation of Asian economies. WEO may have an edge over ADO when it comes to year-ahead GDP forecasts, while ADO's inflation forecasts tend to be more accurate. By and large, and notwithstanding much heterogeneity across economies and years, both sets of forecasts display a high degree of inaccuracy during the crisis years.

Contents 

  • Abstract
  • Introduction
  • Measuring Forecast Errors, Accuracy, and Skill
  • Asian Development Outlook vs. World Economic Outlook Forecast Skill
  • Conclusions
  • Appendixes