ifo Import Climate – a First Lead Indicator for Forecasting German Imports

Imports are typically one of the factors in economic forecasts that generate the greatest errors. In addition to the high volatility of import growth rate, this is due to the fact there is currently no reliable lead indicator for Germany’s imports. This article proposes such an indicator – the ifo Import Climate -for forecasting German imports based on corporate and consumer surveys. The import climate uses the export expectations of Germany’s most important trade partners to project German demand for imports. A forecasting experiment for this quarter and the next three months underlines the forecasting quality of the ifo Import Climate, which gives rise to fewer forecasting errors than other indicators like, for example, special trade or order intake. This makes the ifo Import Climate a promising indicator for preparing forecasts.