Given that the economic environment is constantly changing, an important starting point in the forecasting process is the constant re-assessment of the economic climate in individual countries and the world economy as a whole. Here, a combination of model-based analyses and statistical indicator models play an important role in providing context at the start of each projection round.
A first step is to look at the range of relevant new information since the last projections were produced – such as changes in commodity prices (in particular the oil price), exchange rates and interest rates, fiscal trends, the path of economic activity and other key variables – to see how the recent past has developed differently from what was previously expected. With this new information, and using the previous set of projections as a starting point, the effects of the new elements and revised judgments are typically assessed on the basis of model simulations using the NIGEM global model and short-term indicator models. Thus the likely impact of combined and individual changes in assumptions and new information on key aggregates can be assessed in consistent fashion for each of the major economies and economic groupings. These results are mechanical and therefore intended to be no more than a guide to the informed judgments of country and topic experts on the underlying “forces acting”.