KEPE Composite Leading Indicator

Published in KEPE INDICES

August 2021 estimations


The KEPE monthly Composite Leading Indicator (CLI) is constructed based on a dynamic factor model, using six selected monthly economic series assumed to have leading properties (see also Tsouma, E. [2016], Constructing a Composite Leading Indicator of Economic Activity in Greece, Applied Economics Quarterly, 62 [2], 85-105). It provides early evidence on the course of and any turns in Greek economic activity, ahead of the developments in major economic aggregates. According to the most recent observation for May 2021, the CLI recorded a significant increase for the third consecutive period, thus exceeding the highest level recorded in August 2018, following the protracted economic crisis. The respective development reflects the ongoing enhancement of expectations and the remarkably positive course of the assessments by agents involved in economic activity. Hence, the CLI offers leading indications for the recovery of the Greek economy, resulting from the gradual lifting of restrictive measures and the implied reopening of all economic sectors, as well as from the progress regarding citizens’ vaccinations. Still, the uncertainty surrounding the overall development of the pandemic and the associated variants remains considerable at domestic and international levels, constituting a factor that could once again affect the economic climate and environment. For that reason, it is necessary to re-estimate the CLI, given that the inclusion of new data is expected to demonstrate the continuation or interruption of the observed trends and provide evidence on the course of future domestic economic activity.


Notes: The lag in the data is associated with the non-availability of more recent data for building activity.