Significantly, the revised US model closely aligned with the Atlanta Fed Nowcast during the last quarter of 2023, despite relying on a narrower set of data. This precision underscores the models' capability to outperform established consensus forecasts, with the US nowcast model predicting a 0.6 per cent quarter-over-quarter (QoQ) (non-annualised) growth, marking a positive adjustment from previous forecasts, whereas Germany is set to see a negative surprise at minus 1 per cent QoQ, as per the report ‘Nowcasting GDP Growth’.
High-frequency indicators, crucial for the national accounts or closely correlated with GDP, provide the basis for these predictions, bridging the gap caused by the traditional delay in official GDP figures release.
“A good economic forecast requires a good understanding of the starting point, i.e., where exactly is the economy today. That is not always easy to gauge given the inevitable delays with which official GDP data are released. That’s where ‘nowcasts’ come in, helping to address the information gap,” said Pawel Borowski, senior analyst.
ALCHEMPro News Desk (DP)
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