A New Approach to Nowcasting Indian Gross Value Added
Robert C. M. Beyer
In India, quarterly growth of Gross Value Added (GVA) is published with a large lag and nowcasts are exacerbated by data challenges typically faced by emerging market economies, such as big data revisions, mixed frequencies data publication, small sample size, non-synchronous nature of data releases, and data releases with varying lags. This paper presents a new framework to nowcast India's GVA that incorporates information of mixed data frequencies and other data characteristics. In addition, evening-hour luminosity has been added as a crucial high-frequency indicator. Changes in nightlight intensity contain information about economic activity, especially in countries with a large informal sector and significant data challenges, including in India. The framework for the 'trade, hotels, transport, communication and services related to broadcasting' bloc of the Indian GVA has been illustrated in this paper.
National Growth and Macroeconomic Centre