Plus 2,9%, +2,4, -3%, -5,2% and finally -6%. It's not a countdown. Indeed, it is not even an account, which by definition presupposes something to be counted. And the sequence of forecasts of change in world GDP in 2020developed by major international organizations. The last digit is that released by the OECD on 10 June.
These organizations have an advantage over national institutes because they have a broader and more in-depth overview, given that by statute they deal with all member countries and organize periodic missions to analyze their trends and prospects, bringing together both economic and structural issues. Furthermore, their econometric models integrate all economies and are, therefore, more complex and more complete, offering a coherent picture. Therefore, they provide the most realistic and correct scenario possible. Nevertheless…
And yet it's hard to hide an uneasy feeling about the latest OECD release. For three reasons: outdated numbers appear, econometric models today are useless, or almost useless, communication appears to be made on purpose to make noise rather than to inform.
The numbers appear outdated because the reaction of the economic systems is proving to be faster and stronger than expected, as evidenced by the increase in employment in the USA in May (+2,5 million on April, against expectations of -5,1 million) and the trend of the PMI indices. So, compared to the above, forecasts should get better, not worse.
The fact is that incorporating this new information into complex models such as the IMF and OECD is by no means trivial. So when the new estimates come out they are always already a little outdated. In normal times obsolescence is slow and irrelevant. Now that the economic statistics mark stratospheric variations (in one month the Italian industrial production lost almost as much as it did in the entire 2008-09 recession!), is very fast.
A proof of this is that in early March, when it was clear that it was going to crash (FIRSTonline headlined: it's not a recession, it's a tsunami), the OECD filed away the 2020 forecast at +2,4%, from +2,9%.
The econometric models in the current junctures are useless because they are based on dynamics observed in the past. But past experience contains nothing that can help us understand what will happen next. With or without a second outbreak in the autumn. Today, more than forecasts, they are free numbers. Without detracting from the competence and commitment of those who elaborate them. And recognizing, however, the impotence of econometrics in the face of the challenge of understanding how the economic system will evolve after the tsunami-recession.
Therefore, dated and unreliableSo what are these predictions for? Certainly not to cheer up. Confidence is demolished by a hailstorm of negative numbers that cannot be more negative. Especially if, in representing the situation of some countries (for example, Italy), the worst case scenario is given as the first estimate, with a new outbreak in the fall.
In short, the impression (but it is almost an observation) is that in the arena of international organizations there is competition. And in the world of mass media, this is also played out in terms of visibility. What if this causes damage, in terms of discouraging economic operators? It is they, the international organizations, who explain what to do. In this, it must be said, the OECD elbows further, having increasingly broadened the spectrum of issues and countries it deals with.
It would be time to rethink their role. For example, giving up making predictions, when they end up self-fulfilling like today.
PS: e what about the term of office and the number of mandates of those at the top? The skills and abilities of Angel Gurrìa, the current secretary general, are beyond dispute. But he has been in office since 2006. And he was born in 1950. Is it possible that, while they have alternated, four chief economist, has always resulted in no alternatives?
