Planning for Growth

Abstract

Most countries make ‘forecasts’ of such variables as national income, consumption expenditure, investment expenditure, etc. But such forecasts must be distinguished from ‘plans’. Forecasts are simply projections into the future of the trends currently displayed by the variables under consideration. As such, they can be of use to governments (and private enterprises) in determining economic policies. Planning, however, implies that the government has a set of goals (more or less precisely stated) which it wishes to achieve within a certain time-span, and that it determines its economic policies accordingly. Forecasts, therefore, play their part in planning, since periodic forecasts (based on current data) indicate whether the authorities are on target or whether marginal adjustments of policy are necessary.