An economic forecast is a prediction of the state of an economy or an aspect thereof. The term is most often applied to an estimate of future Gross Domestic Product (GDP), the monetary measure of the value of all finished goods and services produced within a country’s borders. The concept is also sometimes used to refer to a country’s Gross National Product (GNP), which adds the monetary value of imported goods and services, as well as the monetary value of exports.
The most common method of making economic forecasts is through the use of mathematical time series models. These are based on the principle that relationships between contemporaneous economic variables are jointly determined by their underlying historical patterns. Such model-based forecasts are generally referred to as macroeconomic models.
The growth of consumer spending has remained subdued since the second quarter of 2024, reflecting a slowdown in durable goods purchases and weakness in service consumption. In addition, higher delinquency rates on credit cards and auto loans may limit consumers’ ability to increase their spending by using debt. Meanwhile, global growth is projected to decline this year and next on rising trade barriers and heightened policy uncertainty.