The Quality of Economic Forecasts in Times of Extraordinary Crises. Examination of the Extent of Revisions for the Period from 2020 to 2024

Marcus Scheiblecker

09.07.2025

The Quality of Economic Forecasts in Times of Extraordinary Crises

Examination of the Extent of Revisions for the Period from 2020 to 2024

A recent article in the WIFO-Monatsberichte (monthly reports) examines the extent of revisions to forecasts for Austrian GDP by national (WIFO, IHS, OeNB) and international forecasting institutions (European Commission, OECD, and IMF) for the period from 2020 to 2024. For comparison purposes, it examines the accuracy of forecasts for German economic growth by domestic forecasting institutes and international organisations, as well as the accuracy of forecasts for real GDP in the euro area by international organisations.

"Measured by the average absolute forecast error in relation to Austrian economic growth in the years 2021 to 2024, WIFO performed best. The error was roughly equivalent to the average of the forecasts for Germany. However, the forecasts of international institutes for the euro area were better", said WIFO economist Marcus Scheiblecker.

The unpredictable onset of the COVID-19 pandemic led to significant downward revisions of economic forecasts for 2020 worldwide. During the pandemic, the health policy measures announced at short notice hampered forecasting activities. The following recovery was interrupted by Russia's invasion of the Ukraine, which led to sharp price increases in the EU and the implementation of economic sanctions. At the turn of 2022-23, Austria entered its longest recession since the foundation of the Second Republic. During this period, signs of improvement appeared several times, which turned out to be short-lived.

WIFO workshop on economic forecasts

On 27 June 2025, WIFO held a workshop on "Economic forecasts in times of radical uncertainty" with broad international participation. The opening discussion between the institutes' economic policy experts on the economic situation in Austria and Germany and the introductory speech by WIFO Director Gabriel Felbermayr are available as recordings.