Economic forecast: who needs it and why?

Economic forecast
Image by mohamed Hassan from Pixabay

Most people plan their lives in one way or another. You make a shopping list to optimize costs; you study the list of employers’ requirements to prepare for the interview; you look at the weather forecast so you know how to dress when going out. But if everything is clear with forecasts in everyday life, then the forecast of the economic development seems to be something that can interest only specialists. Is it right?

In fact, the economic forecast for 2022 can be useful for a wide variety of people and organizations.

  1. It is obvious that such a forecast is necessary for the government to develop the correct economic policy, both foreign and domestic.
  2. An economic forecast is necessary for any business in order to understand economic development trends and build a development strategy.
  3. It is important for any investor to assess the prospects for the Fed’s monetary policy. Macro statistics help with this. When the economy weakens, the Federal Reserve cuts interest rates by pouring money into the financial system. As a rule, stocks and bonds grow at the same time.
  4. In addition, the economic forecast can be interesting to anyone who wants to understand what is happening around. In the world, everything is interconnected, and the spread of a new strain of COVID-19 in the United States or in another country affects, in the long term, the activities of exchanges, and trends in the currency market, and the unemployment rate.

The economic forecast is possible due to the action of economic laws. However, it is impossible to make an absolutely accurate forecast, since it is impossible to take into account all possible factors. Any forecast gives only approximate values, a tendency of change. Therefore, for a serious understanding of the problem, it is best to study several economic forecasts from different sources.

Image by mohamed Hassan from Pixabay