Working Paper 2013-042
Date created: November 2013
Date modified: January 2014
We use past forecast errors to construct confidence intervals around Australian Government Budget forecasts of key economic and fiscal variables. These confidence intervals provide an indication of the extent of uncertainty around the point estimate forecasts presented in the Budget.
JEL Classification Numbers: E17, H68
Keywords: Confidence intervals, forecast errors
John Clark, Susan Morrissey and Joshua Pooley
Tax Analysis Division
Parkes ACT 2600
Budget Policy Division
Langton Crescent Parkes ACT 2600
DFAT — Australian Aid Program
Canberra ACT 2601
Rhett Wilcox and Luke Willard
Domestic Economy Division
Parkes ACT 2600
1 Correspondence: firstname.lastname@example.org or The Treasury, Langton Crescent, Parkes ACT 2600, Australia. We thank Jenny Allen, Jason Allford, Patrick Boneham, Roger Brake, Phil Gallagher, David Gruen, David Haigh, Rob Heferen, Michael Kouparitsas, Martin Parkinson, Nigel Ray, Barry Sterland and Jim Thomson for suggestions on earlier drafts and David Blackman for assistance in preparing this paper. Emily Pye was with the Australian Treasury when she contributed to this project.
2 The views expressed in this paper are those of the authors and do not necessarily reflect those of the Australian Treasury or the Australian Government. This version of the paper incorporates a minor correction in the calculation of the central forecast and the outcome of payments affecting charts 5, 8, B2 and page 15.