Economic Situation 2011: Forecast and Reality

This article discusses the reasons for the discrepancies between forecasts and reality over the past year. According to the actual results published on 11 January 2012, real GDP increased by 3.0% in 2011. This meant that the pace of economic growth versus 2010 slowed less than the Ifo Institute expected. This forecasting error is primarily due to differences in forecast and actual economic trends. Unexpectedly, the economic upturn continued to gather pace fast in Germany in the first quarter of 2011. The massive weather-related production losses of December 2010 were swiftly recovered after the New Year. Moreover, private consumption continued to rise, while foreign trade also contributed positively to growth.