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Fiscal forecasting performance in an emerging economy: An empirical assessment of Brazil

Joseph David Barroso Vasconcelos de Deus and Helder de Mendonça ()

Economic Systems, 2017, vol. 41, issue 3, 408-419

Abstract: This study makes use of Brazilian data to analyze government budget balance forecast errors. Besides the analysis of the quality and efficiency of budget balance forecasts, economic, political, and institutional and governance dimensions are explored. The findings show that the data forecasts have low quality and efficiency. Furthermore, it is observed that the budget forecast error is subject to a backward-looking effect, a bias in the economic growth forecasts, as well as cyclical fluctuations. Finally, electoral cycles represent a source of overestimated forecasts, and strong institutions and governance supported by the public are able to suppress opportunistic motivations in budget forecasts.

Keywords: Fiscal forecasting; Government budget balance; Fiscal policy; Disclosure of information (search for similar items in EconPapers)
JEL-codes: E62 H68 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:ecosys:v:41:y:2017:i:3:p:408-419