Economic forecast is the prediction of the behavior of a variable such as gross domestic product (GDP) or unemployment rate. The methodology used is often based on a statistical characterization of that variable’s behavior as a time series of data points, usually through regression analysis. These methodologies obviously require a great deal of knowledge concerning the representation of the patterns of that behavior and not a little faith that those patterns will persist over time.
A further risk is that a forecaster’s personal theory on how the economy works might dictate what type of indicators they pay more attention to, resulting in subjective or biased projections. This is especially evident in the way in which the results of the survey of top 50 forecast economists published by Blue Chip Indicators differ from those of the more widely-respected survey of professional forecasters by the Survey of Professional Forecasters, and by the St. Louis Fed’s Greenbook (both with a lag of around 5 years).
Low economic growth in advanced economies is expected to persist, driven by weakening demand and elevated trade barriers. Growth in low-income countries is expected to slow further and will remain below the pre-pandemic average, amid deteriorating external conditions, high debt costs, reduced donor support, and heightened conflict risks. The global recovery is fragile and requires renewed commitment to international cooperation, fiscal responsibility, and a relentless focus on jobs creation.