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Short-term forecasting of euro area economic activity at the ECB

Author

Listed:
  • Bańbura, Marta
  • Saiz, Lorena

Abstract

This article first stresses the importance for a central bank of having a reliable quantitative framework for obtaining a real-time assessment of developments in economic activity in the near term and discusses associated challenges. Second, it presents the framework for short-term forecasting of euro area real GDP growth used at the ECB. The article evaluates the forecast performance of the framework, also comparing it with the Eurosystem/ECB staff macroeconomic projections. It also illustrates how the framework is used to i) analyse the role that data surprises play in the revisions to the outlook and ii) assess risks to the projections. It concludes by pointing out directions for future work. JEL Classification: C33, C53, E32, E37, E52

Suggested Citation

  • Bańbura, Marta & Saiz, Lorena, 2020. "Short-term forecasting of euro area economic activity at the ECB," Economic Bulletin Articles, European Central Bank, vol. 2.
    • Handle: RePEc:ecb:ecbart:2020:0002:2
    Note: 810771
    as

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    File URL: https://www.ecb.europa.eu//pub/economic-bulletin/articles/2020/html/ecb.ebart202002_02~47da9ba4f7.en.html
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    Citations

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    Cited by:

    1. Bańbura, Marta & Belousova, Irina & Bodnár, Katalin & Tóth, Máté Barnabás, 2023. "Nowcasting employment in the euro area," Working Paper Series 2815, European Central Bank.
    2. Ciccarelli, Matteo & Darracq Pariès, Matthieu & Priftis, Romanos & Angelini, Elena & Bańbura, Marta & Bokan, Nikola & Fagan, Gabriel & Gumiel, José Emilio & Kornprobst, Antoine & Lalik, Magdalena & Mo, 2024. "ECB macroeconometric models for forecasting and policy analysis," Occasional Paper Series 344, European Central Bank.

    More about this item

    Keywords

    bridge equations; predictive distributions; short-term forecasting;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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