Economic forecasting: History and procedures

Macroeconomic forecasting in some form has a long history, although its current nature is a product of the Keynesian revolution. Forecasting is an important part of the budgetary process. Treasury has a wide-ranging approach to forecasting, gathering insights from business liaison, econometric models (both single equations and an economy-wide model) and partial and leading indicators, interpreted with a good deal of judgement. The forecasts are discussed both within Treasury and with other government agencies. Over time, Treasury has made public more details of its forecasts. The accompanying narrative also now gives more attention to risks and uncertainty surrounding the forecasts.