No. Given the requirement on us to judge whether the Government has a better than 50 per cent chance of achieving its fiscal targets on current policy, we aim to produce forecasts that are central, with risks equally weighted to the upside and downside. This means that, all else equal, there is a 50 per cent chance of the outturn coming in above our forecast and 50 per cent chance below.
One way we illustrate the uncertainty around our central forecasts is by using fan charts. The fan chart below shows the real GDP forecast in the November 2023 EFO. The solid black line is our central estimate. Each successive pairs of blue areas represents 20 per cent probability bands for different outcomes, based on the size and distribution of past official forecast errors.
