Economists Have Predictions for 2025, But How Accurate Are They? | Global News Avenue

With the arrival of the new year, crops new economic forecastAnalysts review data and trends to develop an economic roadmap for the coming year.

Economists expect economic growthThe unemployment rate is stay at bayand the interest rate Stablize. However, the exact pace at which these economic factors change may deviate from forecasts, according to a new report from the St. Louis Fed.

“Measuring the current state of economy This is difficult because the data is backward-looking and often modified. As a result, economic forecasts are often wrong,” economists Charles Gascón and Joseph Martorana wrote.

For example, economists unanimously forecast economic growth of 1.3% Gross Domestic Product (GDP) Beyond 2024. While fourth-quarter results have yet to be released, Gascon and Martorana said the reality is likely to be more than double that number.

How have forecasters performed in the past?

The study examined the accuracy of forecasts over a three-decade period starting in 1993.

During that time, forecasters’ estimates of GDP were off by a full percentage point. The researchers’ average deviation was 0.5 percentage points for unemployment and as high as 0.7 percentage points for inflation.

Analysts are also more likely to give biased results when forecasting the bond market. Economists have consistently underestimated the level of Treasury yields by nearly half a percentage point.