Evaluation of Norges Bank’s Projections for 2016
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Norges Bank's projections for inflation and economic developments are an important basis for the formulation of monetary policy. Analyses of forecast errors can help Norges Bank to make better projections and improve its understanding of the disturbances to which the economy is exposed. This article provides an evaluation of Norges Bank's projections for 2016. This article starts with a brief overview of economic developments in 2016. This is followed by a comparison of Norges Bank's projections for 2016 with actual developments and a discussion of the most important forecast errors. The forecast errors for 2016 are then assessed against historical forecast errors and the Bank's projections are compared with the projections of other forecasters.