How useful are the forecasts of intergovernmental agencies? The IMF and OECD versus the consensus

This study compares the accuracy and information content of economic foreca sts for G7 countries made in the 1990s by the OECD and IMF. The benchmarks for comparison are the average forecasts of private sector economists publi shed by Consensus Economics. With few exceptions, the private sector foreca sts are less biased and more accurate in terms of mean absolute error and r oot mean square error. Formal tests show these differences are statisticall y significant for forecasts of real growth and production, less so for fore casts of inflation and unemployment. Overall, there appears little informat ion in the OECD and IMF forecasts that could be used to reduce significantl y the error in the private sector forecasts.