Financial forecasts accuracy in Brazil's social security system.

Area of Science:

• Social Sciences
• Economics
• Public Policy

Background:

• Official long-term Social Security forecasts are crucial for Brazilian policy decisions, including pension reform.
• The reliability of these forecasts is questionable due to a lack of systematic evaluation.
• Transparency and data accuracy are vital for credible forecasting.

Purpose of the Study:

• To evaluate the accuracy and methodology of Brazilian government's long-term Social Security actuarial forecasts.
• To analyze the empirical and probabilistic aspects of the official forecasting models.
• To assess the impact of methodological limitations and data quality on forecast reliability.

Main Methods:

• Empirical and probabilistic analysis of official Social Security forecasting models.
• Mathematical modeling to compute confidence intervals for macroeconomic and Social Security forecasts.
• Assessment of forecast bias, error measurement, and data limitations.

Main Results:

• Long-term Social Security forecasts exhibit short-term systematic bias and significant long-term errors.
• Lack of transparency hinders result replication; outdated data compromises forecast accuracy.
• Mathematical analysis reveals inherent complexities and limitations in forecasting, questioning reliability.

Conclusions:

• Brazilian government's long-term Social Security forecasts lack reliability for policy-making.
• Methodological weaknesses and data issues undermine the credibility of official forecasts.
• Further research and improved transparency are needed to enhance the accuracy of Social Security projections.