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Metodij Hadzi-Vaskov, Mr. Luca A Ricci, Alejandro Mariano Werner, and Rene Zamarripa
This paper investigates the performance of the IMF WEO growth forecast revisions across different horizons and country groups. We find that: (i) growth revisions in horizons closer to the actual are generally larger, more volatile, and more negative; (ii) on average, growth revisions are in the right direction, becoming progressively more responsive to the forecast error gap as horizons get closer to the actual year; (iii) growth revisions in systemic economies are relevant for growth revisions in all country groups; (iv) WEO and Consensus Forecast growth revisions are highly correlated; (v) fall-to-spring WEO revisions are more correlated with Consensus Forecasts revisions compared to spring-to-fall revisions; and (vi) across vintages, revisions for a given time horizon are not autocorrelated; within vintages, revisions tend to be positively correlated, suggesting perception of persistent short-term shocks.
Metodij Hadzi-Vaskov, Mr. Luca A Ricci, Alejandro Mariano Werner, and Rene Zamarripa

revisions (mainly in the last vintage), while the impact of terms-of-trade (ToT) revisions is weaker. Fourth, WEO and Consensus Forecast growth revisions move very closely together. Finally, revisions for a given time horizon are not autocorrelated across vintages; nonetheless, revisions tend to be positively correlated within vintages, suggesting a perception of short-term persistence of shocks. The rest of the paper is organized as follows. Section 2 examines the literature that investigates the properties and performance forecasts from the IMF and other multilateral

Metodij Hadzi-Vaskov, Mr. Luca A Ricci, Alejandro Mariano Werner, and Rene Zamarripa

are relevant for growth revisions in all country groups; (iv) WEO and Consensus Forecast growth revisions are highly correlated; (v) fall-to-spring WEO revisions are m o re correlated with Consensus Forecasts revisions compared to spring-to-fall revisions; and (vi) across vintages, revisions for a given time horizon are not autocorrelated; within vintages, revisions tend to be positively correlated, suggesting perception of persistent short-term shocks. JEL Classification Numbers: E17, E37, F47 Keywords: Economic forecasts, Forecast revisions, Growth forecasts

Mr. R. G Gelos, Mr. Robert Rennhack, Mr. James P Walsh, and Pelin Berkmen

appendix provides a detailed list of variables and sources. III. D escriptive E vidence As a preliminary way of exploring the data, this section provides some descriptive, graphical evidence on growth revisions. We first focus on a core sample of 43 emerging markets for which we have complete data, and examine revisions in Consensus Forecasts . Growth Revisions (In percent) In this sample, the growth forecast revisions range from - 18 percent to - 1.5 percent. We divide the sample into two groups, according to the severity of the output impact

International Monetary Fund

dampened the impact of the shock. The simple model fits the Uruguayan case well, explaining 3.3 percentage points of the revision. Further factors that contributed to reducing the impact were the lack of developed capital markets and banks’ low exposure to toxic assets. Graph 1. Consensus Forecasts Growth Revisions and Leverage (Residuals of forecast changes, after controlling for exchange rate flexibility, EU membership, and credit growth) 1 Berkmen, P., G. Gelos, R. Rennhack, and J. Walsh (2009), “The Global Financial Crisis: Explaining Cross

International Monetary Fund
This 2009 Article IV Consultation highlights that the Uruguayan economy has held up considerably well in the face of the global recession. The impact of the crisis appears to have been relatively short lived. Private consumption and investment decelerated while the unemployment rate rose only little and temporarily. The policy response to the crisis has sought to balance different risks. Executive Directors have welcomed the achievement of single-digit inflation over the last several years, while noting that inflation remains relatively high.