Forecasting GDP All Over the World Using Leading Indicators Based on Comprehensive Survey Data

24 Pages Posted: 25 Jun 2019 Last revised: 23 Jul 2019

See all articles by Johanna Garnitz

Johanna Garnitz

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Robert Lehmann

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Klaus Wohlrabe

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: 2019

Abstract

Comprehensive and international comparable leading indicators across countries and continents are rare. In this paper, we use a free and instantaneous available source of leading indicators, the ifo World Economic Survey (WES), to forecast growth of Gross Domestic Product (GDP) in 44 countries and three country aggregates separately. We come up with three major results. First, for more than three-fourths of the countries or country-aggregates in our sample a model containing one of the major WES indicators produces on average lower forecast errors compared to a benchmark model. Second, the most important WES indicators are either the economic climate or the expectations on future economic development for the next six months. And third, adding the WES indicators of the main trading partners leads to a further increase of forecast accuracy in more than 50% of the countries. It seems therefore reasonable to incorporate economic signals from the domestic economy’s main trading partners.

Keywords: world economic survey, economic climate, forecasting GDP

JEL Classification: E170, E270, E370

Suggested Citation

Garnitz, Johanna and Lehmann, Robert and Wohlrabe, Klaus, Forecasting GDP All Over the World Using Leading Indicators Based on Comprehensive Survey Data (2019). CESifo Working Paper No. 7691. Available at SSRN: https://ssrn.com/abstract=3409137

Johanna Garnitz (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Robert Lehmann

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Einsteinstrasse 3
Dresden, 01069
Germany
+49(0)351 / 26476-21 (Phone)
+49(0)351 / 26476-20 (Fax)

HOME PAGE: http://www.cesifo-group.de/ifoHome/CESifo-Group/ifoDresden/ifo-ND-Mitarbeiter/cvifod-lehmann_r.html

Klaus Wohlrabe

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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