Digital Insights: Transforming GDP Nowcasting In Ukraine With High-Frequency Data

The ongoing war in Ukraine has disrupted the timely availability of official economic statistics, which are crucial for assessing the state of the economy. With frequent migration, military operations, and fluctuating public sentiment, Ukraine's economic conditions can vary significantly on a monthly basis. This necessitates the development of alternative approaches to measure economic activity, particularly for institutions relying on data for decision-making. One promising method is the integration of high-frequency digital data, such as internet search trends, which can provide real-time insights into population behavior and economic dynamics. However, combining data sources with different frequencies poses challenges. This work explores mixed-frequency model specifications for nowcasting the growth rates of 10 GDP components in Ukraine, using both official statistics and Google Trends data. By leveraging the strengths of diverse data sources, this study aims to enhance the accuracy and responsiveness of economic monitoring in crisis situations.