Economics in a picture
The daily economic indicator has contributed to assessing the impact of containment measures throughout the pandemic
With the COVID-19 pandemic, the need to complement economic analysis based on quarterly or even monthly data with high-frequency indicators has become clear. In this context, a daily economic indicator (DEI) was developed at Banco de Portugal, covering several dimensions of the economy and allowing for the timely identification of sudden changes in activity. The weekly disclosure on a regular basis started exactly one year ago by Banco de Portugal on its institutional website, thus joining a very restricted group of central banks that regularly publish high-frequency indicators, such as the Federal Reserve Bank of New York or the Deutsche Bundesbank.
From mid-March 2020, at the time of the first general lockdown, there was a very sharp drop in the DEI. After sharp declines in April and May, economic activity showed an overall upward trajectory from the beginning of June. The DEI declined sharply again in early November 2020 with the imposition of restrictions to mobility and the declaration of a new state of emergency. In January 2021, there was a decrease in the DEI, in a context of rapid deterioration of public health conditions and the imposition of a new general lockdown that lasted until mid-March. Subsequently, the indicator recovered substantially, reflecting both a base effect resulting from the strong fall observed in the previous year and the beginning of the first stage of the post-lockdown period. With the declaration of a state of calamity from May 2021, which lasted until August, the DEI signaled a slowdown in economic activity. After the recovery observed in November 2021, a deterioration was observed from mid-December, in a context of a new state of calamity and a worsening of the pandemic situation. At the end of January 2022, the DEI showed a recovery, influenced by the fact that in the same period last year there was a general lockdown.
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.
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