Kiwi-GDP: Real GDP growth nowcasts

Kiwi-GDP should not be viewed as being our latest official forecast, which is published within the quarterly Monetary Policy Statements. There will be times when our official forecast for GDP is very different from the estimate provided by Kiwi-GDP. Kiwi-GDP is one of many models considered by our staff when producing our near-term GDP growth forecasts. In practice, we consider all these models and overlay expert judgement and research insights to get to our official GDP forecast.

Dynamic factor models are effective in real-time estimation and can manage input data of different frequencies and with missing observations. These models efficiently extract signals from large datasets. Kiwi-GDP is a replication of the New York Fed Staff Nowcast. Further details can be found in Bayarmagnai (2025).

The results are from a dynamic factor model, which generates predictions or ‘nowcasts’ of New Zealand's official quarterly GDP growth from Stats NZ. While the predictions are for the next GDP data outturn, GDP data are published with a lag of almost three months meaning that these predictions are for the previous quarter of activity. For example, the estimate produced in early March will be for GDP in the three months to the end of December of the previous year. Upon the release of official statistics in mid-March, the model starts nowcasting for the next quarter, which is the three months to the end of March.