Economic Scenarios



Baseline forecasts and alternative scenarios for more than 100 countries/jurisdictions, updated monthly, for evaluating shocks and differing assumptions.

Moody's Analytics COVID-19 Economic Forecast Scenarios are the foundation of "what if?" analysis for risk management and strategic planning needs. Clients from a broad range of industries use our scenarios to test the impact of shocks and differing economic assumptions on their businesses and portfolios. Scenarios are produced and maintained by a team of more than 80 experienced economists using our fully specified global macroeconomic forecast model.

Methodology

Our scenario-driven approach to forecasting begins with our baseline forecast. We define this as the “most likely outcome” based on current conditions and our view of where the economy is headed. We then develop the basic outlines of our alternative scenarios by running multiple simulations to develop a probability distribution of economic outcomes. The Percentiles refer to the position of a given scenario in a distribution of possible economic outcomes. The Baseline is positioned at the 50th percentile.

  • BL Baseline Forecast
  • CF Consensus Forecast
  • S0 Alternative Scenario Upside - 4th Percentile
  • S1 Alternative Scenario Upside - 10th Percentile
  • S2 Alternative Scenario Downside - 75th Percentile
  • S3 Alternative Scenario Downside - 90th Percentile
  • S4 Alternative Scenario Downside - 96th Percentile
  • CS Alternative Scenario Constant Severity - Downside - 99th Percentile
  • S5 Below-Trend Long-Term Growth Scenario
  • S6 Stagflation Scenario
  • S7 Next-Cycle Recession Scenario
  • S8 Low Oil Price Scenario
  • Other Narrative Based Scenarios (i.e. Sovereign Debt, Trade War)

Key Features

  • Comprehensive Coverage
    Our economists produce forecasts for 100+ countries and 12,000+ variables using our fully-specified structural global macroeconomic model. Countries are interlinked by trade flows, financial markets, prices and investments.
  • Updated Monthly
    Forecasts are updated monthly. Underlying historical data are updated as soon as sources publish new figures. We estimate gaps in as-reported data to create uninterrupted time series that are consistent across geographies.
  • Fully Documented
    We furnish a fully documented model methodology and validation reports as well as narratives for our baseline forecasts and each scenario. Clients also have access to economists, data and client services teams for support.
  • Flexible Delivery Options
    Download or automate delivery of forecasts through our Data Buffet service, access directly within Excel using our Add-in, or retrieve programmatically via an API. All delivery options are complementary with your subscription.

Applications

  • Business and Contingency Planning
    Mitigate risk by proactively assessing losses and capital levels under various scenarios. By linking your performance drivers to the global economic activity represented in our scenarios, you can generate more realistic results.
  • Expected Credit Loss (ECL)
    Employ multiple, defensible, probability-weighted scenarios to calculate expected credit losses for IFRS 9 and CECL. Leverage a comprehensive set of indicators beyond headline numbers to gain insights into specific risk factors.
  • Stress-Testing
    Mitigate risk by proactively assessing losses and capital levels under various scenarios. By linking your performance drivers to the global economic activity represented in our scenarios, you can generate more realistic results.
  • Risk Management and Validation
    Benchmark internal forecasts and models under independent scenarios to expose vulnerabilities to mitigate risk more effectively.

Benefits

  • Accuracy
    Analyze with confidence using trusted scenarios maintained more than 80 economists.
  • Timeliness
    Account for the most recent data and expectations with monthly scenario updates.
  • Depth
    Take advantage of scenarios that include a comprehensive set of economic indicators.
  • Transparency
    Fully understand our forecast methodology and assumptions through detailed documentation.
  • Efficiency
    Quickly incorporate our off-the-shelf scenarios into your processes.