The International Monetary Fund’s (IMF) management and staff welcomed a report released today by the Independent Evaluation Office (IEO) on the Fund’s process and quality of forecasts. The report, IMF Forecasts: Process, Quality, and Country Perspectives, assessed the soundness, evenhandedness and quality of forecasts for the period 1990-2011. “This report provides a comprehensive analysis and valuable insights that support the IMF’s ongoing efforts to produce macroeconomic forecasts of the highest quality,” Managing Director Christine Lagarde said.
The report found that the processes and methods used to generate forecasts were well structured and appropriately tailored to countries’ circumstances, did not show substantial positive or negative biases, and were generally comparable to those of the private sector. “Given the central role forecasts play in many of the IMF’s core activities, I am pleased to learn that country officials have confidence in the integrity of our forecasts and place high value on our analyses of scenarios and potential risks for the world economy,” Ms. Lagarde said. “I am also satisfied by the findings regarding the quality and accuracy of IMF forecasts and, in particular, that staff forecasts in the context of IMF-supported programs have generally been unbiased,” she added.
Ms. Lagarde broadly supported the recommendations provided in the report to further strengthen the IMF’s macroeconomic forecasting, which included promoting a culture of learning from past forecast performance, taking steps to further enhance the transparency of the IMF’s general forecasting process, and ensuring that best practice is followed by providing economists with appropriate guidance in forecasting. She committed to work with staff over the coming months to implement the recommendations endorsed by the Executive Board.