Thursday, December 30, 2010

Planning on Next Week's column

If nothing important comes up, or if I don't change my mind at the last minute:), I am planning to go over my 2010 forecasts (how accurate they were) as well as outline my 2011 projections on Monday. I am still struggling with a bunch of Excel sheets and Eviews, running regressions and linking spreadsheets and all that, while at the same time going through the early columns of the year for the 2010 projections. 

As for the 2010 report card, it seems I have a mixed performance: On one hand, I did not expect capital flows to be so strong this year, but I guess no one did. As a result, growth came in much larger than I expected, which also messed up my other projections: The deficit came in lower than expected, mainly on the back of stronger than expected tax revenues, but also smaller than expected expenditures- both lower interest payment and non-interest expenditures- I would have expected pork barrel spending before the elections to have been stronger this year. Similarly, the current account deficit was much larger than expected, an artifact of the strong growth this year. But I was once again right on target with inflation.

On the other hand, I was once again right on target with my policy predictions. I did not mind being in the minority when I claimed the IMF Standby Arrangement and the fiscal rule would not go through. And they didn't. I did not have access to any private information or anything; being a good reader and movie fan, I had read Aziz Nesin's famous satire Zubuk and watched Vizontele, so I immediately noticed the small-town merchant (that is kucuk kasaba tuccari for you Turkish speakers) tactics the government was employing:)...

Then, there is monetary policy, which warrants a separate paragraph: For the first 11 months of the year, the Bank was quite predictable, except for once, when I got under the impression that the Bank would start hiking during the summer, and on live TV at that, prompting the TV host to wonder what I had been smoking- I don't know what I was smoking. But then things got messy in December.

OK, enough reporting; I am getting back to my Excel sheets and Eviews so that I can get the projections done by Sunday...

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