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Payments data good real-time indicator of economic growth

Mumbai: A Reserve Financial institution of India examine reveals that funds programs could possibly be used to gauge the vibrancy of the financial system and the info generated could possibly be used to do nowcasting of the financial system.

At current, India’s gross worth added (GVA) development is launched with a lag of two months. The RBI paper establishes floor that implies estimating real-time development is feasible utilizing excessive frequency month-to-month payment information.

“The empirical outcomes exhibit the substantial improve in predictive accuracy for the nowcasts generated by the hybrid method and the RMSFE (Root Mean Squared Forecast Error) weighting technique,” the RBI paper suggests.

Within the absence of well timed availability of particular policy-oriented macroeconomic collection, there was an growing development of utilizing high-frequency time collection information to observe financial indicators. Among the many excessive frequency information accessible, funds and settlement information could also be counted as a reliable supply of knowledge.

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