economists' forecasts

PHOTO: Photo: photo/ RNZ Mediawatch

The data is clear: economists’ forecasts are often wrong. Given their track record, shouldn’t these prognostications come with more caveats and disclaimers when they’re broadcast by the media?

In April last year, independent economist Cameron Bagrie went on Morning Report with a startling prediction.

“This downturn, recession, is looking a hell of a lot worse than what we experienced during the Global Financial Crisis. As a starting point, I’d pencil in house prices down at least 10 percent,” he said.

Bagrie was far from alone in that projection.

Many of our best-known bank economists forecast a declining property market as the Covid crisis deepened last year.

In April, ANZ forecast a 10 to 15 percent drop in house prices. Kiwibank’s Jarrod Kerr predicted a 10 to 20 percent dip.

We know the rest of the story: prices rose about 20% in 2020, and kept going up.

In June this year, 1News presenter Chris Chang opened a segment on property prices with the news they’d risen 30 percent in the last 12 months.

Economists’ unemployment forecasts followed a similar trajectory.

In May last year, ANZ chief economist Sharon Zollner said the government was being optimistic projecting unemployment to return to pre-Covid levels by 2025.