A forecast is an estimate of a future economic variable, such as GDP, inflation or unemployment. Forecasts are used in business, economic policy making and government decision-making. They are also important to the public, as they help people plan for the future and make financial decisions. Forecasts are produced by a wide range of organizations and use a variety of methods. On the one hand, there are judgmental methods that rely on experts to fine-tune forecasts produced by a set of models and, on the other, dynamic stochastic general equilibrium (DSGE) models that incorporate modern economic theory to produce a forecast disciplined by economic principles.
The economic outlook is cloudy, with global growth slowing to a tepid pace in 2025 amid rising trade barriers and elevated uncertainty. Downside risks include escalating financial stress, tighter labor markets, surges in violence and unrest, further declines in official aid and extreme weather events. Inflation is expected to accelerate in the coming year as companies pass through higher import costs to consumers, while a sharp slowdown in capital spending limits domestic demand. Overall, growth prospects remain weak in advanced economies despite lower interest rates.