Turkey | Big Data and Nowcasting: Consumption and Investment from Bank Transactions

This paper demonstrates how we use the aggregate information from individual-to-firm and firm-to-firm Garanti BBVA bank transactions to mimic domestic private demand in real time and high frequency, which has been proven to be necessary to react to rapidly changing economic conditions.

Key points

• Key points:
• We replicate the quarterly national accounts aggregate consumption and investment (gross fixed capital formation) and its bigger components (Machinery and Equipment, and Construction) in real time for Turkey.
• To validate the usefulness of these indicators we test their ability to nowcast the Turkish GDP using different models. The results are successful proving the usefulness of Consumption and investment Banking transactions for nowcasting purposes.
• The value of the Big Data information is more relevant at the beginning of the nowcasting process, when the traditional hard data information is scarce. This makes this information especially relevant for those countries where statistical release lags are longer like the Emerging Markets.

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