Twice a year (in spring and in the autumn) the Ifo Institute collaborates with the other institutes or institute consortia to prepare joint forecasts for the world economy and the German economy. This activity is sponsored by the German Ministry of Finance.
Elements of the forecast The primary goal is to assess the macroeconomic development in Germany. As the German economy is affected by the world economy and as it is more and more integrated in the European economy, analyses and forecasts are also made for the international environment. The key variables of the forecast for Germany (and for the Euro area) are the growth of real GDP, the main components of the demand side (private consumption, public consumption, equipment investment, construction, exports, imports, changes in stocks) and of supply (productivity, employment) as well as unemployment and inflation rates.
Forecasting period In the spring report a quarterly forecast is given up to the end of the following year. Given the dates of the publications of the National Accounts this implies forecasting eight quarters. In the autumn report also an estimate for the current and the next year is given on a quarterly basis, which implies forecasting six quarters. In addition, the spring Joint Analysis also contains a medium-term forecast for developments over the coming five years.
Forecasting approach For the macroeconomic forecast various methods are used. They include business cycle indicators (indicator approach), the econometric forecast, and the iterative-analytical method. These are not mutually exclusive alternatives but methods that are combined according to the forecasting task and forecasting horizon, making use of the strengths of each.
Policy recommendations Based on the macroeconomic analysis and forecast the report also includes recommendations, in particular on fiscal policy, monetary policy, wage-setting policies and structural policies, which are important for macroeconomic development.
Publications
The joint economic forecast will be published in German in the next issue of ifo Schnelldienst under the titel "The Situation of the World and the German Economies".
The short and long versions of the joint economic forecast as well as the accompanying tables can be downloaded from the Website: Current Joint Economic Forecast.
RSS