Original Research

Enhancing the accuracy of fiscal projections in South Africa

Estian Calitz, Krige Siebrits, Ian Stuart
South African Journal of Economic and Management Sciences | Vol 19, No 3 | a1142 | DOI: https://doi.org/10.4102/sajems.v19i3.1142 | © 2016 Estian Calitz, Krige Siebrits, Ian Stuart | This work is licensed under CC Attribution 4.0
Submitted: 09 July 2014 | Published: 31 August 2016

About the author(s)

Estian Calitz, University of Stellenbosch, South Africa
Krige Siebrits, University of Stellenbosch, South Africa
Ian Stuart, National Treasury, South Africa

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Abstract

The accuracy of the National Treasury's projections of GDP and key fiscal aggregates is comparable to that of the projections of private sector economists, other reputable organisations and the fiscal authorities of other countries. The errors in the projections of the National Treasury have nonetheless been substantial in some years, and have increased from 2000/01 to 2010/11. This paper argues that the credibility of fiscal policy would have been severely tested if the largest annual errors in respect of the various aggregates had coincided. Against this backdrop, the paper makes the case for structured bi-annual discussions of government’s forecasts during public parliamentary hearings as a mechanism for improving the accuracy and credibility of official projections. It also discusses the potential benefits for South Africa of two alternative mechanisms, namely fiscal councils and committees of independent experts.


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