Growth Forecast
A growth forecast estimates the expected rate of economic expansion over a future period.
Meaning in Practice
Growth forecasts project changes in GDP based on current data, policy assumptions, and global conditions. They are regularly updated by central banks and economic institutions. Forecasts may vary depending on underlying models and assumptions.
Why It Matters
Accurate growth forecasts help guide fiscal and monetary policy decisions. They influence business planning and investment strategies. Revisions can signal shifts in economic strength or weakness.
Market Impact
Higher projected growth can lift equities and increase bond yields. Lower forecasts may lead to risk aversion and falling yields. Currency markets adjust based on relative growth expectations.
Example
If the projected GDP growth rate for next year rises from 1.5 percent to 2.5 percent, the growth forecast indicates stronger economic prospects.