An economic forecast is a statistical model that predicts the values of certain macroeconomic variables over some time horizon. These variables include, but are not limited to, gross domestic product (real output), employment, and price inflation. The statistical models used to make economic forecasts can be quite complex. As a result, they may be difficult to understand and interpret.
Many different methods of making economic forecasts are available, with a wide variety of cutting-edge time series modeling approaches being proposed at a rapid pace. In some cases, these models aim to predict the future behavior of a macroeconomic variable by incorporating a set of assumptions about that variable’s past performance. In other cases, the mathematical techniques used to create a model are simply based on statistical inference and probability.
Economic growth is slowing following a rise in trade barriers and elevated policy uncertainty, with tepid recovery in 2026-27. Downside risks are heightened in commodity exporters, where increased trade barriers and lower oil prices pose challenges to development. In low-income countries, growth is projected to accelerate but will still fall short of restoring pre-pandemic levels and reducing extreme poverty. A stronger global economy requires greater international cooperation, restored fiscal responsibility, and a relentless focus on creating jobs.