Over-optimistic forecasters

INDIA - Report 16 Aug 2021 by Ila Patnaik

As the year progresses, GDP forecasts in India are improving, as is to be expected. But there is a bias in the form of over-optimism. Crude bias correction is applied, based on four years of evidence, to obtain a modified consensus forecast for 2021-22: 6.8% GDP growth.

GDP measurement in India has many problems. We generally prefer to form a sense of the economy that is grounded in well-measured data. The evidence on bias here helps us process statements about the Indian economy made in the broad discourse.

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