The Cyclical Outlook for the Euro Area: Difficult Business

We discuss the main indicators providing information about the short-term Euro Area economic outlook. We also discss why forecasting is generally difficult and why standard forecasting tools do not perform well during the current period and what can be done about it. We mention two academic papers: "Nowcasting with Large Bayesian Vectorautoregressions", by Cimadomo, Giannone, Lenza, Monti & Sokol, ECB Working Paper No. 2453, 2020 "How to Estimate a VAR after March 2020", by Lenza & Primiceri, ECB Working Paper No. 2461, 2020