Comments on: Will This Year’s Contraction Be Much Worse Than Last Year’s?

By: The Irish Economy » Blog Archive » Central Banks Forecasts Not So Grim

The Irish Economy » Blog Archive » Central Banks Forecasts Not So Grim — Wed, 15 Jul 2009 13:35:26 +0000

[...] Central Bank forecast actually implies, there is the more general issue, which I have referred to before, of the difficulty in mapping forecasts based on year-average over year-average into commentary [...]

By: The Irish Economy » Blog Archive » Implications of QNA Release for 2009

Thu, 26 Mar 2009 14:58:00 +0000

[...] I noted before, the Irish media and forecasters tend to focus on the year-average over year-average figure for GDP [...]

By: Karl Whelan

Karl Whelan — Wed, 07 Jan 2009 09:53:41 +0000

John’s point about the preliminary nature of the QNAs is correct (and posted impressively early in the morning!)

It raises some interesting questions about the usage of the QNAs in assessing the state of the economy. On this, I’d make a couple of observations.

While the revisions to quarterly GDP are indeed large, Quill’s article also reported that the revisions were not statistically significant. So, despite the obvious caveats, it could be argued that the QNAs still represent as accurate a picture of economic trends as we can get.

Also, in terms of picking out turning points, the revisions are largely due to the information added on the release of detailed annual national income and expenditure accounts. These revisions tend to change all of the quarters within a year more than the intra-year pattern. So, with the caveat that even the final quarterly estimates are not perfect, it appears that one can still use the intra-quarter movements in the current QNAs to assess, for instance, whether the economy strengthened or weakened over the course of a particular year.

By: John Fitzgerald

John Fitzgerald — Wed, 07 Jan 2009 05:43:16 +0000

I am not happy using the CSO quarterly national accounts to time turning points in the Irish economy too precisely. The article by Patrick Quill of the CSO in the Autumn QEC shows that substantial revisions are made to the quarterly accounts over the first two years after publication. While substantial revisions are also made to the annual numbers by the CSO these numbers have a firmer base, being subject to smaller, though still substantial, revisions in the years after first pubication.
I presume what we all try and do is forecast/estimate the final “true” figure.

By: Patrick Honohan

Patrick Honohan — Tue, 06 Jan 2009 11:07:00 +0000

Nice.

I’d be inclined to use GDP for analysis of quarterly output trends as the exact timing of the profit outflows that account for most of the difference seem largely unrelated to output.

Interestingly, real GDP peaks even earlier: in the first quarter of 2007. (That’s the same as when nominal house prices peaked. Wouldn’t you know it.)

But if you do use the GDP figures, then the 2009 quarterly falls will need to be steeper than you say to get to the ESRI figure of -4% for that year. Maybe things are getting steeper after all.