A nowcast of 2021-22 GDP growth and forecast for 2022-23 based on a Factor Augmented Time Varying Coefficients Regression Model

Rudrani Bhattacharya () and Sudipto Mundle
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Rudrani Bhattacharya: National Institute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: In this paper we have used our recently updated Factor Augmented Time Varying Coefficients Regression (FA-TVCR) model (Bhattacharya, Chakravartti and Mundle, 2019; Bhattacharya, Bhandari and Mundle 2021) to nowcast GDP growth for 2021-22 and forecast it for the year 2022-23. Our GDP growth nowcast for 2021-22 is 9.9 per cent, somewhat higher than the RBI projection of 9.5 per cent. The forecast for 2022-23 is 5.2 per cent. Factoring in an inflation rate of 5 per cent, this would translate to a nominal GDP growth rate of 10.2 per cent which is lower than the RBI projection of 12.3-13 percent but slightly higher than the 15th Finance Commission projection of 9.5 percent.

Pages: 17
Date: 2021-12
New Economics Papers: this item is included in nep-cwa and nep-mac
Note: Working Paper 361, 2021
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