Why is Treasury so hopeless at forecasting?

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At The Oz, David Uren begs Treasury to pull its finger out today, quite rightly:

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If the economy had behaved in line with Treasury’s predictions for it over the past five years, the economy would be $90 billion bigger than it is and the budget would be heading for a surplus.

Treasury is facing yet another downgrade in its medium-term outlook in next week’s budget with its projections that the economy will bounce back to normal rates of growth over the next three years out of step with a slowing global trend.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.