FinTech-Enabled Economic Forecasting: Inflation and GDP Dynamics in India

Abstract

In the recent years, fintech has grown significantly in India, gathering fresh and creative methods for generating data about the creation of financial transactions and macroeconomic monitoring. This study looks at how Fintech Innovation will forecast GDP and inflation using both traditional macroeconomic indicators and digital financial signals. To accomplish this, both Forms of Fintech (Digital Payments, Digital Transactions and Tax Compliance Data) and Traditional Macro Economic Indices (GDP and CPI Trends) have been used to predict future changes in the trend rates of GDP growth, as well as changes in the CPI inflation rate over the period 2016-2025, using time series analysis to analyze the accuracy of results between prediction models based on Fintech Data and models based on traditional econometric methodologies. The empirical work provides descriptive and trend analysis of both GDP and Inflation for the period 2014-2025, showing the impact of Digital Reforms on the prediction performance. It also finds that models that incorporate Fintech Data provide a greater degree of accuracy in their predictions than models using Traditional Econometric Methods and can help inform Policymakers about macroeconomic risks and sustainable policy responses. Finally, recommendations are provided for creating methods to integrate Digital Financial Data into national statistical systems.