Economic forecasts and executive approval

This research note investigates how different sources of economic information affected citizens’ approval of the government in Portugal from 2001 to 2018. It compares the predictive power of the revised and most accurate data on GDP growth with other economic indicators that were available to the public at the time, such as the first estimates of recent growth and the forecasts of future growth. It finds that approval is best predicted by information about forecasted growth for the current year. These results provide further indirect evidence that the state of the economy, as it plays out directly in people’s lives and experiences, may be less consequential for evaluations of the government than the mediated information about it that is conveyed to the public.