The IMF was too optimistic in its predictions for Greece prior to lending, and lowered its internal standards to do so, according to an internal IMF audit released Tuesday. The report highlights the miscalculations made by the IMF in countries such as Greece, where special handling was required but recession was the result.
“Short-term forecasts of GDP growth and inflation … tended to be optimistic in high-profile cases characterized by exceptional access to IMF resources,” according to the report by the IMF’s Independent Evaluation Office, which places the Greek program of 2010 among the organization’s biggest mistakes of the period 1990 to 2013, along with its poor forecasting of the 1997 Asian currency crisis and Argentina’s default in 2000.
The report notes many international observers and analysts have used these “sporadic” mistakes to question the accuracy, and in certain cases, integrity of IMF forecasts,
It also underlines that errors in each program have been corrected after the first review, the only exemption being Greece, where the IMF has repeatedly revised its estimates of Greece’s GDP, thus hindering the planning of the country’s adjustment program.