Research and policy notes : RPN 3-21 December 2021 : Output gap estimation for the Maldives

Abstract

The gap between the potential and actual output, the output gap, is a key variable for macroeconomic forecasting, analyses and policymaking. This paper adapts different univariate statistical methods for the estimation of the output gap for the Maldives. The analysis of the estimates shows that Beveridge-Nelson filter is the most robust and performs better than its counterparts. In the absence of an official seasonally adjusted Quarterly National Accounts, seasonal adjustments were also carried out using X13-ARIMA-SEATS implemented in JDemetra+. In doing so, the paper has acted as a medium to set up an automated process to estimate an unofficial seasonally adjusted Quarterly National Accounts and the output gap of the Maldives as new data with revisions become available.