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Short-term forecasting of euro area economic activity in an uncertain world

Author

Listed:
  • Eraslan, Sercan
  • Fabbri, Andrea
  • Saiz, Lorena

Abstract

This article examines the key challenges for short-term forecasting of euro area economic activity since the COVID-19 pandemic, highlighting the persistently elevated levels of uncertainty. It details the significant enhancements made to the short-term forecasting models of the ECB as part of a general review aimed at improving their accuracy. It also highlights exploratory work on alternative approaches using advanced machine learning methods, which offer promising avenues to address the complexities of economic forecasting in times of high uncertainty. JEL Classification: C53, E32, E37, E52

Suggested Citation

  • Eraslan, Sercan & Fabbri, Andrea & Saiz, Lorena, 2026. "Short-term forecasting of euro area economic activity in an uncertain world," Economic Bulletin Articles, European Central Bank, vol. 8.
    • Handle: RePEc:ecb:ecbart:2026:0008:2
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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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