Nowcasting Indian GDP

Bragoli, Daniela and Fosten, Jack (2018) Nowcasting Indian GDP. Oxford Bulletin of Economics and Statistics, 80 (2). 259–282. ISSN 0305-9049

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Abstract

Nowcasting has become a useful tool for making timely predictions of GDP in a data-rich environment. However, in developing economies this is more challenging due to substantial revisions in GDP data and the limited availability of predictor variables. Taking India as an important leading case, we use a dynamic factor model nowcasting method to analyse these two issues. Firstly, we propose to compare nowcasts of the first release of GDP to those of the final release to assess differences in their predictability. Secondly, we expand a standard set of predictors typically used for nowcasting GDP with nominal and international series, in order to proxy the variation in missing employment and service sector variables in India. We find that the factor model improves over several benchmarks including bridge equations, but only for the final GDP release and not for the first release. Also, the nominal and international series improve predictions over and above real series. This suggests that future studies of nowcasting in developing economies, which have similar issues of data revisions and availability as India, should be careful in analysing first versus final release GDP data, and may find that predictions are improved when including additional variables from more timely international data sources.

Item Type:	Article
Uncontrolled Keywords:	nowcasting,emerging markets,data revisions,dynamic factor model,economic growth,sdg 8 - decent work and economic growth ,/dk/atira/pure/sustainabledevelopmentgoals/decent_work_and_economic_growth
Faculty \ School:	Faculty of Social Sciences > School of Economics
Depositing User:	Pure Connector
Date Deposited:	31 Aug 2017 05:06
Last Modified:	22 Oct 2022 03:05
URI:	https://ueaeprints.uea.ac.uk/id/eprint/64701
DOI:	10.1111/obes.12219

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