An economic forecast is a summary of future economic conditions, usually in terms of economic output. The output most commonly forecasted is Gross Domestic Product (GDP), or the equivalent, Gross National Product (GNP). A broad range of models is used for economic forecasting, including regression and neural networks. The results of the forecasts are then compared to actual historical data to gauge accuracy. The most successful models are those that have a good fit to the data and are simple enough to understand.
Global growth is projected to slow sharply over the next five years, reflecting a rise in trade barriers and heightened policy uncertainty. The outlook for advanced economies is particularly weak. Inflation is expected to decline, but only slowly as commodity prices fall and the impact of past hikes on services inflation lingers.
In the US, economic activity has been held back by a combination of austere fiscal policy and bond market volatility. As a result, consumer spending, government spending, and business investment have all declined. The unemployment rate is expected to rise through 2026.
A key issue for emerging markets is the effect of higher trade barriers on global trade. This holds back regional growth and could depress consumer spending. Rising delinquency rates on credit cards and auto loans suggest consumers may find it harder to use debt to increase spending. In low-income countries (LICs), the slower global economy reduces aid flows and hampers development efforts.
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