Evaluating the Predictive Power of Mexico’s Timely Indicator of Economic Activity Indicator: Real and Pseudo Real Time Performance
DOI:
https://doi.org/10.60758/laer.v37i.461Keywords:
IOAE; Nowcasting; Pseudo real-time; Real-time; Sentiment analysis.Abstract
This study conducts an in-depth review of the performance of Mexico's Timely Indicator of Economic Activity (IOAE), published by the National Institute of Statistics and Geography, from two perspectives: (i) a real-time analysis covering the period from its launch in October 2020 to December 2024, which compares the IOAE estimates with the observed values of the Global Indicator of Economic Activity, and includes a sentiment analysis based on content from the social media platform X; and (ii) a pseudo real-time analysis that compares the performance of the IOAE with that of traditional nowcasting techniques over the period from October 2018 to November 2024. The results suggest that the IOAE provides timely and accurate estimates, consistent with both international experience and the alternative nowcasting approaches analyzed in this study, above all for the second step ahead. Furthermore, the indicator is objectively utilized by users and can serve as an effective nowcasting tool for Mexico’s timely GDP estimate.
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