The most optimistic was Curtin University’s Rebecca Cassells at 6.2 per cent in 2020-21 and then-ACTU chief economist Margaret McKenzie at 5 per cent for 2021-22.
Loading
University of Western Australia’s Jakob Madsen, Julie Toth (formerly of Ai Group) and Mr Oster all expected unemployment to peak at 10 per cent at a later point.
While the panel was broadly off the mark on unemployment, it was better than Treasury and the RBA. The RBA in August 2020 forecast a 9 per cent jobless rate in the June 2021 quarter and 7.5 per cent for this year.
The panel also seems likely to outperform official institutions on interest rate changes. While the first rise of this cycle is yet to happen, making it difficult to judge, it’s remarkable how many on the panel 18 months ago were tipping a rate rise later this year.
In 2020, University of Melbourne professor Neville Norman forecast an early-2021 rate rise provided the virus abated. The Delta and Omicron outbreaks of 2021 affected the outlook and in the latest Scope panel he has forecast one for August this year. Prof Norman tipped the March quarter of 2022 in last year’s Scope survey, picking an early rise ahead of his peers.
Loading
Also in 2020, independent economist Saul Eslake tipped the third quarter of 2022 for the first rise and then-Industry Super’s Stephen Anthony also suggested some time this year. Ms Toth forecast the fourth quarter of 2022.
Another surprise has been inflation. The average inflation forecast in mid-2020 was for 1.7 per cent in 2020-21 and 1.8 per cent in 2021-22. In the 12 months to June 2021, consumer price inflation increased 3.8 per cent and is currently 3.5 per cent.
The only expert to come close to this forecast was Mr Oster, with a 3.1 per cent forecast. Mr Eslake and ANZ’s David Plank had the next closest forecasts at 2.5 per cent.
The housing boom was another big shock. Major banks had been predicting carnage in the property market and double-digit price falls.
Almost all the panel members forecast falling home prices. However, several experts bucked the trend including Prof Norman, Housing Industry Association’s Tim Reardon, Ms McKenzie and Ms Cassells who had the foresight to predict property values would rise.
The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.
Economic forecasting during the pandemic and what no one saw coming
Source: Philippines Alive
