Economics in a picture
The first stage of the post-lockdown period led to an improvement in economic activity
The use of high-frequency data has become urgent to complement the economic analysis based on monthly or quarterly indicators. The rapid dissemination of these data makes it possible to identify sudden changes in economic activity in a timely manner. In this context, at the end of January 2021, the Banco de Portugal started to regularly release the daily economic indicator (DEI) on its institutional website. It is recalled that this indicator summarizes daily information that covers different dimensions of the economy.
As previously documented, there was a very sharp drop in the DEI starting in mid-March 2020, at the time of the first lockdown (yellow line in the chart). On the contrary, there was a very rapid recovery of the indicator as of mid-March 2021. It should be noted that the DEI corresponds to a year-on-year rate of change, so the fall observed in the previous year creates a strong base effect, generating a pronounced upward effect on the DEI (red line in the chart). In order to mitigate the influence of this base effect in the recent reading of the DEI, a biennial rate can be calculated, which corresponds to accumulating the year-on-year rates of change on a given day for two consecutive years (blue line in the chart). Based on this reading, it can be seen that the first stage of post-lockdown period that started on March 15 resulted in an improvement in the evolution of economic activity.
For more details, see Lourenço and Rua (2020), “The DEI: tracking economic activity daily during the lockdown”, Banco de Portugal Working Paper No. 13 and Lourenço and Rua (2021), “The Daily Economic Indicator: tracking economic activity daily during the lockdown”, Economic Modelling.
Prepared by Nuno Lourenço and António Rua. The analyses, opinions and findings expressed above represent the views of the authors and not necessarily those of the Banco de Portugal or the Eurosystem.
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