The Application of Exponential Smoothing in GDP Forecasting

Abstract

GDP forecasting is the estimation of gross domestic product (GDP) over a period of time in the future, which is important for national governments, businesses, and investors respectively. The exponential smoothing method, also known as an exponentially weighted average method, is a forecasting method with the advantages of a clear process and convenient calculation. In this paper, the literature method is used, and "gross domestic product", "GDP", and "exponential smoothing method" are used in various databases and literature review websites, "Macroeconomics" and "forecasting" as the keywords to search, comb the literature, categorize and summarize the application of exponential smoothing method in GDP forecasting, and at the same time, the experimental method is used to design an experiment to forecast the future growth of GDP in the next three years by using the data published by the National Bureau of Statistics of China (NBSC). The results of the experiment are that the value-added of the primary industry is expected to continue to grow from about 9227.246 billion Yuan in 2023 to about 100139.20 billion Yuan in 2025. The value added of the secondary industry is projected to continue to grow from about 510,795,800,000,000 Yuan in 2023 to about 563,968,676,000,000 Yuan in 2025. The value added to the tertiary sector is projected to continue to grow from about 679,630.84 billion yuan in 2023 to about 753,204.88 billion yuan in 2025. Correspondingly, the Gross Domestic Product (GDP) will continue to grow, from about 1,281,982,888 million yuan in 2023 to about 1,417,312,284 million yuan in 2025. By analyzing the forecast results, it can be seen that all three major industries in China will maintain growth in the next three years. Depending on the different attributes of the three major industries, the government or enterprises will take appropriate measures to ensure the growth of the industries as well as to cope with various risks. This forecast is based on past data, but the actual economic situation may be affected by many external factors such as the international trade environment and the global economic situation. Governments and businesses will therefore need to pay close attention to these factors in order to adjust their strategies in a timely manner.