A comprehensive economic forecast combines analysis of key metrics and indicators, such as unemployment, inflation, sales and consumer confidence. It then uses a range of models to predict future economic conditions. The model output is then summarized in a report that typically includes information graphics and commentary.
The accuracy of a forecast is dependent on the model used, the historical data inputs and assumptions, and the methodology employed. Some of the most common methods include econometric models, consensus forecasts and economic base analysis. Some central banks also use computational general equilibrium (CGE) and dynamic stochastic general equilibrium (DSGE) models.
Despite the recent surge in growth, a number of economic indicators remain elevated or are falling. This is due to a combination of higher tariff costs, weaker global demand and higher interest rates. As a result, we see global growth slowing to 3.0% in 2025 and 2026, with the US a notable exception. Inflation should also decline globally, as businesses pass through the impact of higher tariffs and the CPI falls below target.