14

15

14.2
14.4
14.6
14.8
15.2
15.4
15.6
0
1000000
2000000
3000000
4000000
5000000
6000000
2011-12 Q1
Q2 2011-12 Q1
Q3 Q2
2011-12 Q4 Q3
2012-13 Q1 2011-12 Q4 GDP India quarterly:
Q2 2012-13 Q1
Q3 Q2
2012-13 Q4 Q3
2013-14 Q1 2012-13 Q4
Q2 2013-14 Q1

Log of India’s GDP Quarterly Data:

Q3 Q2
Q3
2013-14Q4
2013-14Q4
2014-15 Q1
2014-15 Q1
Q2
Q2
Q3 Q3
2014-15 Q4 2014-15 Q4
2015-16 Q1 2015-16 Q1
Q2 Q2
Q3 Q3
2015-16 Q4 2015-16 Q4
Forecasting India GDP

2016-17 Q1 2016-17 Q1
Q2 Q2
Q3 Q3
We have taken quarterly data of India’s GDP, from 2012Q1 to 2020Q3.

LOG GDP INDIA

2016-17 Q4 2016-17 Q4
INDIA GDP 2012 -21

2017-18 Q1
2017-18 Q1
Q2
Q2
Q3
Q3
2017-18 Q4
2017-18 Q4 2018-19 Q1
2018-19 Q1 Q2
Q2 Q3
Q3 2018-19 Q4
2018-19 Q4 2019-20 Q1
2019-20 Q1 Q2
Q2 Q3
Q3 2019-20 Q4
2019-20 Q4 2020-21 Q1
2020-21 Q1 Q2
 As we can see from graph of Log of India GDP’s Quarterly data, that series is non-stationary, so we will
check stationarity at first difference.

ARIMA 1ST DIFFERENCE

0.3

0.2

0.1

2015-16 Q4
2016-17 Q1
Q2
Q2
Q3
2011-12 Q4
2012-13 Q1
Q2
Q3
2012-13 Q4
2013-14 Q1
Q2
Q3
2013-14Q4
2014-15 Q1
Q2
Q3
2014-15 Q4
2015-16 Q1
Q2
Q3

Q3
2016-17 Q4
2017-18 Q1
Q2
Q3
2017-18 Q4
2018-19 Q1
Q2
Q3
2018-19 Q4
2019-20 Q1
Q2
Q3
2019-20 Q4
2020-21 Q1
Q2
-0.1

-0.2

-0.3

-0.4

At first difference, series seems to have a constant mean, and now can be processed for checking AR
and MA processes.

So, we take correlogram of first difference of log prices of India’s GDP.

We can see from Correlogram that ACF and PACF are significant only for 1 levels only, so we must check
ARMA levels for those ARIMA (p,d,q) models:-(0,1,1), (1,1,0),(1,1,1).
ARMA Check at (0,1,1) levels.

ARMA Check at (1,1,0) levels:

ARMA Check at (1,1,1) levels:

ARIMA (0,1,1) (1,1,0) (1,1,1)

Ad. R square 0.0185 0.0189 -0.051511
AIC 3.032 3.06 3.16
SBIC 3.11 3.14 3.34

As we find that AIC is highest for ARIMA(1,1,1) model we will prefer ARIMA (1,1,1) model for further
forecasts and analysis.

we look for coefficients of AR (1), MA (1) and Constant using Conditional Least Squares:

We have taken data till 2019Q4 as sample and used Forecast function on ARIMA(1,1,1) model to predict
remaining 6 quarters of data and the above picture shows E-Vies Forecast result.

Quarter and Year (FY) GDP Eviews forecast

2020 Q1 4918228 4881232
2020 Q2 4920694 4940014
2020 Q3 5173234 5001290
2020 Q4 5327693 5074294
2021 Q1 3808193 5137654
2021 Q2 4722068 5390012