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How Well did We Forecast 2014?

Shanta Devarajan's picture

A year ago, we polled Future Development bloggers for predictions on the coming year (2014).  Looking back, we find that many unforeseen (and possibly unforeseeable) events had major economic impact. 

We missed the developments in Ukraine and Russia, the spread of the Islamic State in Iraq, the outbreak of Ebola in West Africa, the collapse in oil prices and their attendant effects on economic growth.  At the same time, we picked the winner of the soccer World Cup, and got many of the technology trends right. Perhaps economists are better at predicting non-economic events.

Here’s the scorecard on the seven predictions made:
 

1. Global growth will remain robust and tapering by the U.S. Fed will be less consequential to emerging markets than expected. Partly  right.  Global growth in 2014 is expected to be 3.3%, slightly higher than in 2013, but below the 2010-13 average, let alone the 2003-8 average.  We would not say, in hindsight, that growth was “robust”. For developing countries, growth in 2014 will be the third-slowest since 2000, with sharp declines in Russia and Brazil, and continued disappointing growth performance in India. However, we were right in thinking that this  had little to do with tapering by the U.S. Fed which did not have  major negative consequences.

2. For Europe, 2014 will be a better year. Wrong. The Euro Area is unlikely to surpass one percent growth this year. Italy suffered its third consecutive year of negative growth, and France and Germany eked out anemic gains. The expected focus on the Balkans (100 years after the beginning of the First World War) was overshadowed by events in Russia and Ukraine.

3. The steady improvement of both governance and incomes in large parts of Africa will generate greater confidence and dynamism on the continent. Mostly wrong. Growth remained robust, but confidence was undermined by the Ebola epidemic, as well as conflict in South Sudan, CAR and the Sahel. Governance is backsliding in many countries.

4. Girls in developing countries will outperform boys. Probably right. Girls are enrolling at greater rates in higher education, and seem to be performing better in high school. For instance, in the intermediate (12th grade) exams in Lahore, Pakistan, the pass rate for girls was significantly higher than for boys.

5. Mobile banking and other “leapfrog” technologies will spread widely. Right. Smartphone sales in India more than doubled last year. To be sure, some new technologies are contributing to violent conflict (for example, the use of drones for military purposes by groups like ISIS, also increased; e-payments are making it easier to launder money).

6. As more and more economists point to the primacy of politics in development, political scientists will wake up and wonder why they have been left out of the discussion. Partially right.  There was some discussion at political-science gatherings.  But political scientists were nowhere to be found in the debates about the new economic policy in India, service-delivery protests in Brazil or Chile, subsidy reform in Egypt, or African leaders’ seeking extensions of their term limits.

7. Either Germany or Uruguay will win the World Cup in football. Right!

Total score: 4 out of 7, with ½ points for partially right predictions.

 
We will be publishing the 2015 Predictions very soon.

Comments

Submitted by k p sharma on

2015 predictions should include growth of dizitilisation,online government,transparency in governance,media's contributions towards Good governance

Submitted by Anonymous on

The Development in future in all catogories to the creatures in the world need to improve step by step to attain success in a feature of life with the blessings of Almighty. I Need such kind of revolution. Thanking you.

With regards

SUNDARARAJAN.V
Social Scientist

Submitted by V.Sundararajan on

The each and every human being in the world has fulfilled their needs without any stress. That is a need to develop theirselves in all aspects.

Thanking you,

With regards

SUNDARARAJAN.
Editor-in-Chief,
Sumathi Publications.

Submitted by Anders Ronquist on

Thanks for an always interesting and thought-provoking blog. As many consider economics a political science I think it's only right that you are at the heart of the debate :). For 2015 projections it would be interesting if you could include something on the linkages between rising number of conflicts in the world and the implications they (will) have on economic growth. Also, will women e more economic empowered and also benefit more from economic growth in 2015? These are of course key issues in many developing contexts and countries. Happy holidays from Kenya!

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