Has two meanings. In the context of a business, it means estimating future outcomes such as next year’s sales figures. Although forecasts can only be guesses of the future, the aim is to base the guesswork on the best possible information. There are three main sources for this:
• Projecting an established trend forward ( extrapolation )
• Market research into consumers’ buying intentions
• Consulting experts with proven ability at anticipating trends.
In the macroeconomic context, forecasting means using sophisticated models to predict changes in the economy as a whole. Output, investment, inflation, employment and unemployment might all be the subject of forecasts.