KEPE’s composite leading indicator of Greek economic activity (CLI-GR)

The monthly Composite Leading Indicator (CLI) of KEPE is constructed on the basis of a dynamic factor model, using selected monthly indicators assumed to have leading properties. It provides early evidence of turns in Greek economic activity ahead of the corresponding turns in aggregate measures. According to the most recent observation for November 2018, the CLI records a modest rise, following two consecutive periods of decrease. It, thus, appears that its falling course is interrupted, while it continues, at the same time, to lie at relatively high levels –as compared to the most recent period of reference– moving around the values recorded in September 2008, whereby the latter was part of the significant downward course in domestic economic activity of that time. As a result, and given the frequently observed intermediate variability characteristic of the CLI, the overall picture is in favor of a course signaling the future improvement in economic conditions in the country and, potentially, reflecting that the Greek economy has, indeed, entered a stabilization and recovery regime, based on the leading feature of the CLI. In any case, the conduction of additional estimations, as soon as new data become available, will enable a better assessment regarding the continuation or interruption of the prevailing trends and/or the reappearance of more clear-cut evidence in favor of the enhancement of domestic economic activity. In this way, it will be feasible to carry out a more accurate overall evaluation of the observed indications and trends.