Business forecasts and forecasting risks

The recent revision of forecasts for Germany and the world economy have caused some irritation and around criticism of the forecasts. misunderstanding regarding the goal of economic forecasts and their risks. The goal of a forecast is to estimate as accurately as possible the direction and strength of the economy and the cyclical turning points. Since the conditions that the forecast is based on change, forecasts are subject to risks. For this reason it is necessary to revise the forecasts in correspondence with the change in conditions. In light of the large error potential and the numerous risks, the forecasts of the Ifo Institute have been very accurate when compared to the actual economic development in 1991 to 1999.