Document Type
Article
Abstract
It is imperative for the Central Bank to know the current state of the economy as the basis underlying projections of future economic conditions. To that end, current economic conditions, in this case household consumption and investment, could be predicted using nowcasting. In this research, a nowcasting model was developed for the two aforementioned macroeconomic variables using a Dynamic Factor Model (DFM). Theindicators used when nowcasting household consumption included: motor vehicle sales, total deposits, the lending rate on consumer loans, M1 and the rupiah exchange rate (NEER), while the indicators used for nowcasting investment included: cement sales, motor vehicle production, electric energy consumption, outstanding loans and M1. Accuracy testing showed that the nowcasting model for household consumption using DFM was sound, while the forecast error for nowcasting investment was significant but remained below the benchmark.
Recommended Citation
Tarsidin, Tarsidin; Idham, Idham; and Rakhman, Robbi Nur
(2018)
"Nowcasting Household Consumption and Investment in Indonesia,"
Bulletin of Monetary Economics and Banking: Vol. 20:
No.
3, Article 1.
DOI: https://doi.org/10.21098/bemp.v20i3.858
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol20/iss3/1
First Page
375
Last Page
403
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Indonesia
Affiliation
Bank Indonesia
