Nowcasting Indonesia

Publication | December 2015
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In this paper, state of the art techniques for nowcasting Indonesia's GDP growth have been applied.

We produce predictions of the current state of the Indonesian economy by estimating a Dynamic Factor Model on indicators closely watched by market operators over the period of 2002–2014. Besides the standard difficulties associated with constructing timely indicators of current economic conditions, Indonesia presents additional challenges typical to emerging market economies where data are often scant and unreliable. By means of a pseudo-real-time forecasting exercise, we show that our predictions are comparable to those of market operators. Careful selection of indicators is also shown to be crucial for better forecast performance when data quality is low.

Contents

  • Tables and Figures
  • Abstract
  • Introduction
  • Indonesia's Gross Domestic Product Data: Patterns and Issues
  • Nowcasting
  • Empirics
  • Conclusions
  • Appendix
  • References

Additional Details

Authors
Type
Series
Subjects
  • Economics
Countries
  • Indonesia
SKU
  • WPS157807-2
ISSN
  • 2313-6537 (Print)
  • 2313-6545 (e-ISSN)

Published Version

Luciani, Matteo, Madhavi Pundit, Arief Ramayandi, and Giovanni Veronese. 2018. "Nowcasting Indonesia." Empirical Economics 55 (2): 597–619. https://doi.org/10.1007/s00181-017-1288-4.

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