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Nowcasting GDP with Digital Payments: Evidence from Uganda

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  • Andrea Panozzo, Lorenzo Spadavecchia, Adam Mugume, Elizabeth Kasekende, Samuel Namwanja Musoke, Mariss Nakayaga, Deo Sande, Anita Mpagi, Nzima Ghislain

Abstract

In developing economies, output statistics arrive with long lags and omit a large informal sector, while digital payment systems record a growing share of transactions in near real time. We assess whether these records improve GDP nowcasts in Uganda, exploiting two national systems that observe complementary segments of the economy: Mobile Money, covering retail and informal transactions, and real-time gross settlement (RTGS), covering large-value formal payments. Within a pseudo-real-time design respecting each series’ publication lag, we augment a conventional macroeconomic panel with payment data across linear and machinelearning models. Payment data cut forecast errors by up to 16 percent and rank among the most informative predictors, with up to over three times the weight of a typical macroeconomic indicator. The improvement delivered by payment data is robust to macroeconomic disturbances, such as the COVID-19 contraction. Placebo tests attribute these gains to economic content, not added predictors. Already held by central banks, payment data offer a timely, low-cost input for surveillance where conventional statistics are weakest.

Suggested Citation

  • Andrea Panozzo, Lorenzo Spadavecchia, Adam Mugume, Elizabeth Kasekende, Samuel Namwanja Musoke, Mariss Nakayaga, Deo Sande, Anita Mpagi, Nzima Ghislain, 2026. "Nowcasting GDP with Digital Payments: Evidence from Uganda," BAFFI CAREFIN Working Papers 26282, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
  • Handle: RePEc:baf:cbafwp:cbafwp26282
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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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