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Finance & economics | Predicting the future

Is The Economist always wrong?

We used artificial intelligence to test the accuracy of our forecasts

Video: Tameem Sankari
The tone of pronouncements made in the leader pages of The Economist has been likened to the “voice of God”. The comparison is not meant flatteringly. But it raises a fair question. A deity would be omniscient. How accurate, by comparison, are our predictions? Rigorous fact-checking usually saves us from embarrassing errors about the present. The future is trickier.
In 1999 we said oil could fall to $5 a barrel, from around $10 at the time. That $10 turned out to be a generational low. Prices rose more than tenfold in the next decade. Then, in 2013, we called a peak in global oil demand. Today it is still stubbornly trundling upwards. This April we said that oil markets were in “La La land” about the war in Iran and predicted a spike in prices. They have since fallen by about a third.
Perhaps the black stuff is our bête noire. Yet these howlers, and others, have given rise to the charge that, far from being all-knowing, The Economist is so reliably wrong that the smart move is to bet against it. There is no better time to double down on a stock-market rally than when we start fretting about a bubble. Last year the then chairman of Reform UK, a populist-right party, called The Economist the “ultimate contrarian indicator”, while complaining about our criticism of his party’s fantasyland fiscal numbers. (A few months later, the party reversed course and ditched those policies.)
Is the accusation fair? Or can The Economist lay claim to a creditable forecasting record? Predictive perfection is not our goal and we aim mainly to inform and stretch minds. But ideally we would be right more often than wrong. To assess our record with something approaching neutrality, we took the 7,000 or so leaders The Economist has published this millennium and fed them into GPT-5.5, an artificial-intelligence model.
We asked it to assess whether each leader had made a falsifiable claim about the future as part of its main thesis. About 1,400 did. We then extracted those predictions, and asked the AI to mark out of ten both how contrarian the leader’s outlook was at the time and how accurate the prediction turned out to be. We ran those queries several times and took an average.
Overall, the AI assessor’s conclusions are reassuring, at least for those of us who make a living writing (and occasionally predicting) for The Economist.

Predictions in Economist leaders, 2000-26

↑ 10 Bang onAccuracyscore↓ 0 Way off
← 0 Mainstream

Out-of-consensus score

10 Out on a limb →
For example, when we predicted in 2007 that Vladimir Putin would remain the effective ruler of Russia, we were correct—but this was a widely held view.
Prognostications that aligned heavily with conventional wisdom tended to prove accurate.
By contrast, when we suggested in April that oil prices were likely to rise further, we were out on a limb. Alas, we were dead wrong.
The handful of calls that were wildly at odds with conventional wisdom at the time tended to be less accurate.
But take our 2013 prediction that Bitcoin had staying power—a moderately unconventional proposition at the time. The currency is up more than 60,000% since we published it.
When we were neither safely conventional nor exceptionally daring, our predictions fared better: we showed a consistently better-than-even odds of getting the future right.
To evaluate our record in detail, start by casting your mind back to the turn of the millennium, when our leader sample begins. We were preoccupied by transformative technology. Market optimism seemed to be teetering on the delusional. As the dotcom crash took hold, we fretted (accurately) about America’s economic pain spreading to Europe and Asia, and (un­necessarily) about a second dip in growth. But soon we began to fulminate about the next crisis—which started in America’s housing market and culminated in the worldwide financial mayhem of 2007-09.
By 2003 we were warning readers that housing markets looked frothy and calling America’s carmakers “an endangered species”. By 2004 our worries extended to stocks; easy monetary policy was pumping out overly cheap liquidity. In 2005 those concerns were more acute. We put a plummeting brick labelled “House Prices” on the cover, with the strapline “After the fall”.

Nostradamus or dumb us?

In early 2006 our cover likened the American economy to a stick of dynamite. Over the next few years the housing market, then the stock market, and finally the global economy collapsed. We had hoped that strong growth outside America would prop up the rest of the world, and argued that as “America drops, Asia shops”. Instead, global GDP fell, even though a few Asian economies held up.
Our warning in late 2007 about “America’s vulnerable economy” (illustrated with a version of the poster for the film “Jaws”) turned out to be more on the money: by the start of the following year, most forecasters were expecting a recession. In 2011 we returned to an image of swimmer and shark to warn about a “double dip” downturn. Like ten years earlier, that fear proved to be unfounded.

Economist cover leaders

Global financial crisis 2003-2011

20032005200720092011zzzzzzzzS&P 500 index
Cover

America drops, Asia shops

“The reason it will not is that the common view of the American consumer as the engine of the world economy is flawed. But this time round, even if America drops sharply, the world won't stop”

Accuracy score: 1.2
Out-of-consensus score: 2.3
If The Economist was downbeat about the world’s economic prospects, we were exuberant about technology. Sometimes this exuberance turned out to be justified. We declared smartphones the ­future of computing in 2002, said that something like streaming would devour DVDs in 2008, and cautioned in 2011 that a flood of Chinese-made cars would wash over the West. Still, our techno-optimism occasionally got ahead of itself. Distributed electric grids (boosted by The Economist in 2000), cheap bioethanol (2003), open ­standards for social media (2008) and augmented ­reality (2016) have yet to bring about the breakthroughs we prophesied.
And then there is politics. It is not easy to foretell the decisions of voters or, for that matter, mercurial autocrats. The Economist was convinced by the false claim that Saddam Hussein was hiding weapons of mass destruction, but was right in 2003 to doubt Vladimir Putin was a true democrat. We toyed with the idea that China’s Communist Party might give ground on democratic reforms. In America we correctly forecast that Ted Cruz would not win the 2016 election, but for the wrong reason: we thought that his combative antics would alienate moderates. In fact, Donald Trump offered an even more furious alternative and still bested Hillary Clinton.
When covid-19 began infecting the globe, we were ahead of the crowd. By late January 2020, long before governments started ordering shutdowns, we had sounded the alarm that the disease would spread worldwide. By the end of February, we said it would be a pandemic. Stock markets tumbled by a quarter in the following weeks. Once pandemic stimulus spending fuelled inflation in 2022, we expected a much sharper rise in interest rates than the Federal Reserve, or bond markets, were pricing in. That turned out to be correct; our next bet, that this tightening would lead to a recession, did not. The world economy achieved a “soft landing” as inflation fell mostly back to normal.
So much for the past. As for the future, we expect the rich world’s debt binge to end in an inflationary mess and for AI to cause seismic economic and political disruption. We think that the global population will peak decades sooner than official projections. How are these predictions looking? It is, mostly, “too early to say”, as Zhou Enlai, communist China’s first premier, is misquoted as remarking when asked to assess the impact of the French Revolution. Come back in another quarter of a century to see how we did. ■
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This article appeared in the Finance & economics section of the print edition under the headline “Writing wrongs”
Sources: GPT5.5; S&P 500; The Economist
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