DOF to review 2019 inflation forecasts

The Department of Finance (DOF) is planning to once again assess the inflation and gross domestic product (GDP) forecasts made by various economists from private banks and institutions next year, a top official said.

In an interview, Finance Secretary Carlos Dominguez said the DOF would conduct another study on the inflation and GDP forecasts of private economists for 2019 to check their accountability.

“We’ll do it again next year. We’ll do a scoring again,” Dominguez said.

The DOF’s Strategy, Economics and Results Group (SERG) earlier conducted a study, which showed that economists and analysts from 13 institutions were off the mark in their inflation forecasts by as much as 0.4 percentage points, which corresponds for a margin of error of almost 15 percent.

Finance Undersecretary Karl Kendrick Chua said forecasts with margins of error (MOE) above 10 percent are considered weak estimates.

Chua also noted that these inaccurate forecasts may have also pushed up inflation expectations, contributing to the higher prices of goods this 2018.

However, Dominguez said the purpose of the DOF study was not to blame economists, but rather to score their forecasts.

“No, we didn’t say blame. All I want is the score,” he said.

“If you put it out there, we will check the accountability. If you say something in public, we should be able to score you, right?“he said.

But Dominguez maintained that forecasts made public by these analysts may still have affected inflation expectations.

“One of the effects if you say something in public, if somebody reads it, is he might act on it, right? The result is he will act on it,” he said.