Nowcasting Indian GDP
Daniela Bragoli and
Jack Fosten
No 2016-06, University of East Anglia School of Economics Working Paper Series from School of Economics, University of East Anglia, Norwich, UK.
Abstract:
We propose a nowcasting model for the Indian real GDP growth rate which uses the flow of relevant information to update predictions on a daily basis and can serve as a timely barometer to track the Indian development process. There are several challenges faced when nowcasting GDP in developing economies such as India. The first challenge is to proxy im- portant missing variables such as international trade in the service sector. Our novel solution augments a baseline model with series on US and Euro-area output which improves predictions, particularly during the 2008-2009 global crisis. The second challenge is the impact of sizeable revisions to the GDP data. We construct a new series for real-time Indian GDP using press releases from the Central Statistics Office (CSO), finding that data revisions have a non-trivial influence on our results. Therefore, caution should be taken when evaluating predictions using the preliminary GDP release.
Keywords: nowcasting; emerging markets; data revisions; dynamic factor model; economic growth (search for similar items in EconPapers)
JEL-codes: C38 C53 E37 O11 O47 (search for similar items in EconPapers)
Date: 2016-06-06
New Economics Papers: this item is included in nep-mac
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