Chart of the Day” IMF Forecasts of Greek Economy

By Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman

This Great Graphic was posted on Zero Hedge. It shows the IMF’s forecast for the Greek economy and the actual performance. Obviously the track record is dismal.

The take-away for Zero Hedge is that the Troika’s forecasts are a “joke”. It seems to me that this is not a very help way to frame the issue. Moreover, the IMF has most recently acknowledged that its models under-estimated the fiscal multiplier–how much output is reduced per unit of austerity imposed.

It is common to see various explanations for Greece missing its deficit targets, including many that attribute it to rampant tax evasion and a deeply rooted in an exaggerated sense of entitlement. No doubt these play a role, but the fact that the Greek economy is imploding faster than the Troika expected, and around which it made its aid projections, also needs to have a central part in any narrative.


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Marc Chandler

Marc Chandler

Marc Chandler has been covering the global capital markets in one fashion or another for nearly 25 years, working at economic consulting firms and global investment banks. Chandler attended North Central College for undergraduate. He holds masters degrees from Northern Illinois University and University of Pittsburgh in American History and International Political Economy. Currently Chandler teaches at New York University Center for Global Affairss, where he is an associate professor.

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  1. I guess the IMF folks don’t watch the nightly news that shows all the rioting, striking and protest.
    Perhaps they would be better served to look at things as they are and not what charts say they should be.

  2. What the hell kind of tool are they even using to create these projections? Rubber band clipped to top of paper? Or are they seriously claiming an algorithm at work?

  3. “It seems to me that this is not a very help way to frame the issue.”

    Theres framing the issue and then theres telling the truth. IMF did the first, ZH did the second.

  4. ZH amuses me. They’re right that austerity hurts. But they like the idea of a gold standard which means automatic austerity for everyone.