How accurate are private sector forecasts? Cross-country evidence from consensus forecasts of output growth

The performance of Consensus Forecasts of real GDP growth is evaluated for a large number of industrialized and developing countries for the time period 1989 to 1998. Two key findings emerge. First, the record of failure to predict recessions is virtually unblemished. Second, there is a high degree of similarity between private sector growth forecasts and those of international organizations (the IMF, OECD and the World Bank). The paper also provides preliminary evidence on the efficiency of, and extent of bias in, these forecasts.