Macroeconomic forecasting in Poland: lessons from the external shocks

Abstract

The aim of this paper is to analyse the forecast errors of Polish professional forecasters under theexternal shock of the COVID-19 crisis in 2020-based on the Parkiet competition. This analysis showsthat after the initial disruption related to the imposed lockdown in March and April, commercial economists were able to lower their forecasts errors of the industrial production and retail sales. On the other hand, a far worse performance has been seen in the case of the market variable; either the size of errors or the disagreement were elevated throughout the whole of 2020. Furthermore, long-term forecasts that were produced during the first year of the pandemic have been characterized with visible inconsistencies, i.e. forecasts of economic growth were similar when forecasters either assumed a strong increase in unemployment or when they did not. Economists made the biggest error in case of labour market forecasting. This phenomenon is likely related to the scarcity of information in the public statistics. Such problems are likely to repeat in the case of other external shocks, i.e. the forthcoming energy crisis.