ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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An Assessment of Growth Forecasts for India

The quality of growth forecasts for India over the past dozen years is assessed using the publication Asia-Pacific Consensus Forecasts, which provides a rich data set of forecasts made by leading Indian think tanks, academic institutions and corporations as well as multinational firms. Errors made in forecasting Indian growth a year ahead are similar in magnitude to those made for industrialised countries, but current-year forecasts errors are larger. This may reflect more the greater scale of variation in Indian growth as well as challenges posed by the large revisions in the official real gross domestic product data. The speed with which forecasters of India's growth absorb new information compares favourably with performance in industrialised countries: domestic news is absorbed into forecasts within four months and news from other countries such as the United States and China within six to seven months. There is great similarity between the Asia-Pacific Consensus Forecasts and International Monetary Fund forecasts for India.

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An Assessment of Growth Forecasts for India

Kajal Lahiri, Prakash Loungani

The quality of growth forecasts for India over the past dozen years is assessed using the publication Asia-Pacific Consensus Forecasts, which provides a rich data set of forecasts made by leading Indian think tanks, academic institutions and corporations as well as multinational firms. Errors made in forecasting Indian growth a year ahead are similar in magnitude to those made for industrialised countries, but current-year forecasts errors are larger. This may reflect more the greater scale of variation in Indian growth as well as challenges posed by the large revisions in the official real gross domestic product data. The speed with which forecasters of India’s growth absorb new information compares favourably with performance in industrialised countries: domestic news is absorbed into forecasts within four months and news from other countries such as the United States and China within six to seven months. There is great similarity between the Asia-Pacific Consensus Forecasts and International Monetary Fund forecasts for India.

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