Panagiotis Liargovas, Vasilis Pilichos and Anastasia Angelopoulou

Correspondence: Panagiotis Liargovas, liargova@uop.gr

Department of Economics, University of Peloponnese, Greece

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Abstract

In this paper, we examine the correlation between budget and growth forecast errors of the Greek Government, during the last decade. We explore if these budget forecast errors are the result of fiscal performance, economic conditions, or other qualitative characteristics of economic policy reform. We try to explain whether biased macroeconomic forecasts were responsible for biased fiscal forecasts. Besides, we investigate the role of business and consumers expectations, the election process and the financial aid disbursements following positive reviews of the Greek policy reform. We conclude that fiscal governance reform has improved fiscal forecasting framework, even though pessimistic forecasts prevail.

Keywords:

  fiscal governance, fiscal planning, forecasting bias, Greek economic crisis

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