KEPE Composite Leading Indicator

Published in KEPE INDICES

January 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 October 2020, the CLI recorded an increase following the fall of the two preceding periods of reference. The respective rise partly reflects the short-term enhancement of business expectations in several sectors of the economy, in combination with the observed variability in the individual indicators. Nevertheless, economic conditions in the country continued to be subject to a significant degree of uncertainty regarding the evolution of the second wave of the COVID-19 pandemic. In parallel, taking into account that the related health crisis deteriorated during October and given the anticipated impact of the imposition of new exceptional measures –restricting economic activity– which followed, it is necessary to re-estimate the CLI. 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.