Spanish economists devise system for detecting risks to budget forecasts

A group of Spanish economists have devised a forecasting system they believe can detect risks to the official projection of the Spanish government's budget before they materialise.

In A Toolkit to Strengthen Government Budget Surveillance, Diego Pedregal, Javier Pérez and Antonio Sánchez-Fuentes compile a set of tools to help official institutions monitor the government's borrowing requirement.

The system features a suite of models that the authors claim are "suitable" for use wth the monthly and quarterly fiscal reports published by the Spanish statistical authorities.

"Our tools are instrumental in the ex-ante detection of risks to official projections, and can thus help reduce the ex-post reputational costs of budgetary slippage," the authors say.