Electric Motors, Energy Supply and Education: the Quality of Ifo’s Production-Side Short-Term Forecast

Forecasts of overall economic output by economic sector have been a key building block of every economic forecast for some time. To make such forecasts, the Ifo Institute applies the IFOCAST approach developed in-house. This article takes a critical look at the forecasting quality of the production-side forecasts published by the Ifo Institute. Ifo’s forecasts can be attributed a high level of accuracy. The quality of its gross domestic product, manufacturing and construction forecasting is particularly high. There is, however, scope for improvement in a few segments of the service sector. Such an improvement could be achieved via a more systematic use of the survey indicators for the service sector from the Ifo Business Survey.