Nowcasting
Immediate forecast of economic or environmental conditions based on real-time data evolution using AI models.
Nowcasting is an AI-based predictive analytics technique that uses real-time data to provide immediate short-term forecasts, traditionally for economic or weather conditions. As a fusion of "now" and "forecasting," it signifies the prediction of the present, the very near future, and the very recent past. Its applications are varied and significant, are used in various domains such as meteorology, economics, and financial markets. In these fields, accurate and immediate data-driven predictions can aid in informed decision-making and proactive responses. The method leverages AI and machine learning algorithms to learn from historical and current data, discern patterns, and predict immediate trends.
The term "Nowcasting," combining the words "Now" and "Forecasting," was coined in meteorology in the 1980s to denote the detailed description of current weather along with forecasts for the period 0-6 hours ahead. In the 2000s, the term gained popularity in the economics field where it was applied to predict key economic indicators in real-time.
While no single individual or group can be credited with the development of Nowcasting as it stems from the collective advancement of AI, ML, and data science, various agencies such as the National Weather Service in the US have been instrumental in advancing meteorological Nowcasting. On the economic front, central banks and financial institutions worldwide have embraced and pushed Nowcasting methodologies forward.