GDP outcomes and forecasts Annual percentage change 6  6  5  5  4  4  3  3  2  2  1  1  0 mar-00  0 mar-01  mar-02  mar-03  mar-04  mar-05  mar-06  mar-07  Sources: Statistics Sweden and the Riksbank  BIS Review 138/2007  7  Figure 2. Employment outcomes and forecasts Annual percentage change 4,0  4,0  3,0  3,0  2,0  2,0  1,0  1,0  0,0  0,0  -1,0  -1,0  mar-01  mar-02  mar-03  mar-04  mar-05  mar-06  mar-07  Sources: Statistics Sweden and the Riksbank  Figure 3. CPIX outcomes and forecasts Annual percentage change 3,5  3,5  3,0  3,0  2,5  2,5  2,0  2,0  1,5  1,5  1,0  1,0  0,5  0,5  0,0  0,0  -0,5 mar-00  -0,5 mar-01  mar-02  mar-03  mar-04  mar-05  mar-06  mar-07  Sources: Statistics Sweden and the Riksbank  8  BIS Review 138/2007  Figure 4. Productivity outcomes and forecasts Annual percentage change 5,0  5,0  4,0  4,0  3,0  3,0  2,0  2,0  1,0  1,0  0,0  0,0  -1,0  -1,0  -2,0 mar-01  mar-02  mar-03  mar-04  mar-05  -2,0 mar-07  mar-06  Sources: Statistics Sweden and the Riksbank  Figure 5.
The type of time series model chosen for the comparison is, despite its simplicity, difficult to surpass, according to several international studies. Moreover, they have analysed how far ahead we can make forecasts with good accuracy, that is to say what forecasting memory the different variables have.5 They have also looked at whether there are tendencies to systematically over-estimate or under-estimate the different variables, that is, whether the forecasts have any bias. What does the analysis show about our forecasting performance? Let us first look at the entire period and compare our forecasts for GDP, employment and CPIX with outcomes. CPIX is a measure of underlying inflation, which until recently was known as UND1X. Hardly surprisingly, it appears that the forecasts have varied in accuracy (Figure 1). For instance, we have under-estimated employment growth recently (Figure 2). Nor did we predict the sharp rise in inflation spring 2001 in our assessments the previous year. However, we were more successful in capturing the downswing in inflation during 2003 (Figure 3). But how do things look in more detail for the different variables? Forecasts for GDP growth With regard to the GDP forecasts, we have periodically been accurate and close to the outcome, while we have fallen short on other occasions (Figure 1). It is often particularly difficult to make forecasts in an economic turnaround. Compared with the time series model that is used to gain a perspective of the forecasting memory, we make better GDP forecasts up to a year ahead.