A short-term forecasting model for GDP and its demand components

Abstract

This article summarises the key aspects of the extended and revised version of Spain-STING (Spain, Short-Term INdicator of Growth), which is a tool used by the Banco de España for short-term forecasting of the Spanish economy’s GDP and its demand components. Drawing on a broad set of indicators, several models are estimated that enable GDP, private consumption, public expenditure, investment in capital goods, construction investment, exports and imports to be forecast. The assessment of the new model’s predictive power for the period spanning June 2005-September 2016 shows a slight improvement on the previous version of Spain-STING