The Fiscal Forecasting Track Record of the European Commission and Portugal

Antonio Afonso and Jorge Silva ()

No 2012/37, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This study aims at explaining the deviation between the budget balance ratio forecasts and the outcomes in the Portuguese official forecasts and in the European Commission (EC) vintage forecasts. Therefore, we used data from the EC for the period 1969-2011 and also the Portuguese official forecasts for 1977-2011. We explain the deviation of the budget balanceto- GDP through econometric estimations and present statistical decomposition about budget balance, revenue and spending-to-GDP deviations. The statistical significance of real GDP and inflation deviations reveals the effect of automatic stabilizers and the imperfect tax indexation system. The European panel reveals statistical significance (no significance) of investment (unemployment) deviations in the budget-to-GDP ratio. Countries with better fiscal rules seem to present favourable deviations (in the absence of fixed effects). In Portugal, there is evidence of unfavourable errors about the budget balance in nominal currency in most years, which has been offset (totally or partially) by a favourable nominal GDP effect deviation. JEL Classification: C23, E44, H68.

Keywords: macro forecasts; fiscal forecasts; EU; Portugal. (search for similar items in EconPapers)
Date: 2012-10
New Economics Papers: this item is included in nep-for
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://depeco.iseg.ulisboa.pt/wp/wp372012.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp372012

Access Statistics for this paper

More papers in Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa Department of Economics, ISEG - Lisbon School of Economics and Management, Universidade de Lisboa, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL.
Bibliographic data for series maintained by Vitor Escaria ().