Forecast of Gross Domestic Product at a Regional Level

Forecasts of economic developments at a regional level have been fairly rare to date both in scientific literature and in practice. This is primarily due to a lack of quarterly data and the existence of very few potential indicators at a regional level. This article shows the extent to which it is possible to forecast gross domestic product for Saxony and Eastern Germany respectively. International, national and regional indicators are used in the forecasting process. Various combination approaches are employed in addition to simple model forecasts. This makes it possible to significantly improve simple benchmark models.