The Banka Slovenije website now features a new GDP nowcasting tool for Slovenia. The nowcast is automatically updated each week and is based on the most recent available data. The tool provides valuable insight into the current state of the Slovenian economy.
Banka Slovenije has begun publishing a weekly GDP nowcast, offering an up-to-date estimate of current economic growth derived from a broad set of high-frequency indicators. It provides additional information for monitoring ongoing economic developments, even before the first official release of quarterly GDP growth figures (which are published 45 days after the end of each quarter). Similar nowcasting tools are used by other central banks, such as the Bank of Finland and the New York Fed.
The GDP nowcast on the Banka Slovenije website is automatically updated every Friday morning, based on the latest available data. The tool shows both the average nowcast and the range of nowcasts from various model specifications. A wider range indicates greater uncertainty in the nowcasts for a given period.
Figure: Screenshot of GDP nowcast
The quarterly GDP nowcast is based on a set of 70 different model specifications (for a detailed description of the methodologies, see Radovan (2017) and Caka (2020)). The input data consist of quickly and frequently available indicators, such as monthly measures of economic activity, economic sentiment surveys, labour market data, balance of payments statistics, financial market indicators, and various price indices. The nowcast incorporates more than one hundred time series of differing frequencies, daily, weekly, monthly, and quarterly. It also includes indicators reflecting macroeconomic conditions in Slovenia's main export markets. While most of the data are provided by the Statistical Office of the Republic of Slovenia, additional sources include Eurostat, the ECB, Bankart, Banka Slovenije and others.
This tool supports macroeconomic analysis and enhances the interpretation of current economic developments. It also serves as an important input for Banka Slovenije’s official macroeconomic projections, which are prepared twice a year. It should be noted, however, that the GDP growth nowcast may differ significantly from the official GDP growth figures. Such discrepancies can occur due to divergences between monthly data on economic activity and the quarterly national accounts statistics, heightened volatility in the economic environment where linear models are less reliable, or revisions and different approaches to the seasonal adjustment of the data.
Banka Slovenije plans to gradually expand its website with additional analytical tools of a similar nature.