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Ace in Hand: The Value of Card Data in the Game of Nowcasting

Author

Listed:
  • Tomas Adam
  • Jan Belka
  • Martin Hluze
  • Jakub Mateju
  • Hana Prause
  • Jiri Schwarz

Abstract

We use Mastercard card payments data to nowcast turnover in Czech retail sales and services. We show that an index based on this data tracks surprisingly well the official retail sales data released by the Czech Statistical Office (CZSO) more than a month later. We further show that the card payments data not only helps in backcasting Czech retail sales after the end of the month, but also provides valuable information for the nowcast as soon as three weeks into the ongoing month. That is six to seven weeks ahead of the official release. To illustrate the usefulness of our method, we show that we would have been able to backcast, with reasonable accuracy, the sharp drop in retail sales that occurred at the outbreak of the first wave of covid-19 in Czechia in March 2020 four weeks before the March data was released by the CZSO.

Suggested Citation

  • Tomas Adam & Jan Belka & Martin Hluze & Jakub Mateju & Hana Prause & Jiri Schwarz, 2023. "Ace in Hand: The Value of Card Data in the Game of Nowcasting," Working Papers 2023/14, Czech National Bank, Research and Statistics Department.
    • Handle: RePEc:cnb:wpaper:2023/14
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    File URL: https://www.cnb.cz/export/sites/cnb/en/economic-research/.galleries/research_publications/cnb_wp/cnbwp_2023_14.pdf
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    References listed on IDEAS

    as
    1. Galbraith, John W. & Tkacz, Greg, 2018. "Nowcasting with payments system data," International Journal of Forecasting, Elsevier, vol. 34(2), pages 366-376.
    2. Ali B. Barlas & Seda Guler Mert & Berk Orkun Isa & Alvaro Ortiz & Tomasa Rodrigo & Baris Soybilgen & Ege Yazgan, 2021. "Big Data Information and Nowcasting: Consumption and Investment from Bank Transactions in Turkey," Papers 2107.03299, arXiv.org.
    3. Alcedo, Joel & Cavallo, Alberto & Dwyer, Bricklin & Mishra, Prachi & Spilimbergo, Antonio, 2022. "E-commerce During Covid: Stylized Facts from 47 Economies," CEPR Discussion Papers 17001, C.E.P.R. Discussion Papers.
    4. García, Juan R. & Pacce, Matías & Rodrigo, Tomasa & Ruiz de Aguirre, Pep & Ulloa, Camilo A., 2021. "Measuring and forecasting retail trade in real time using card transactional data," International Journal of Forecasting, Elsevier, vol. 37(3), pages 1235-1246.
    5. James Chapman & Ajit Desai, . "Using payments data to nowcast macroeconomic variables during the onset of Covid-19," Journal of Financial Market Infrastructures, Journal of Financial Market Infrastructures.
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    Keywords

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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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