Q3 2016: +0.2%/0.4% QoQ/YoY FY-2016 forecast range: -0.3% to 0.0% YoY
Based on a number of macro data releases up to November 2nd, this note provides an estimate of Greek GDP for Q3 2016 as well as our revised forecast for the full-year. For this purpose, we utilize two distinct methodologies; namely the GDP Nowcasting framework we first introduced in late 2013 as well as a mixed-data sampling methodology employing MIDAS/Bridge-type models.1 As a reminder, our Nowcasting model produces high frequency, real-time estimates of Greece’s gross domestic product by applying an econometric methodology that can properly handle data reporting lags, revisions and other important aspects characterizing the daily flow of macroeconomic information. In a similar fashion, the MIDAS models combine information from monthly-sampled variables that are released ahead of the respective (quarterly) GDP data. They fully take into account the publication lags of the monthly variables themselves and use data appropriately aligned so that respective forecasts made ahead of the actual GDP release are as informative as possible. For the particular exercise presented herein, we emphasize that due to reporting lags, the flow of macroeconomic data pertaining to Q3 2016 will continue in the following couple of months and thus, our estimates should be considered as preliminary and subject to revisions. That is, especially taking into consideration the high degree of uncertainty currently characterizing the domestic macroeconomic trajectory. All in all, we are looking for real GDP growth of c. 0.2%/0.4% QoQ/YoY in Q3, while for the full year we are now expecting a growth reading between -0.3% and 0.0%. This implies a carry-over of c. +0.2ppts into 2017, which compares with a negative base effect of c. -0.3ppts this year. Note that our earlier GDP growth forecast for 2016 was -0.5%, revised from an initially expected -1.0%. As a final note, we emphasize that the forecasts/nowcasts presented herein are based on a set of macroeconomic data released so far and thus, they do not take into account revisions in past quarterly data that are expected to be announced along with the next quarterly national accounts update on November 14th.
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