ECONOMIC OUTLOOK: MORE ACCURATE FORECASTS IN FUTURE.

• Position: Brief Article

The forecasting model, dubbed the "Dynamic factor model" by the Commission, has existed in the United States for a decade and is already operational in Austria. It will be used by the Commission for quarterly growth forecast for the Euro-zone. Longer term, the model may be applied to other variables such as inflation.

What changes: previously based on six indicators (vehicle registrations, retail sales, etc.) the new model will be based on almost two thousand series of indicators (data on consumption, industrial output, retail trade, prices, international trade, etc.).

"This is clearly a more accurate forecasting model", according to one of its designers, particularly as each publication will be accompanied by a clear confidence indicator...