Abstract

In many economies, the publication of gross domestic product (GDP) figures tends to lag actual economic performance. In India, for example, the time lag is currently almost three months. This paper assesses whether real-time gross settlement (RTGS) data can be used to ‘nowcast’ Indian GDP. As RTGS data are available to the Reserve Bank of India (RBI) on an almost daily basis, such data can be used to construct timely GDP forecasts. This paper reports some initial results on using payments systems data to enhance GDP forecasts. The paper shows that GDP and RTGS are co-integrated, and using an ARIMA-type model demonstrates that RTGS volume data have considerable predictive ability for real GDP.

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