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KEPE Composite Leading Indicator

Published in KEPE INDICES

September 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 June 2021, the CLI recorded a marginal decrease, after the significant increase of the preceding period of reference, while it remained above the highest level recorded in August 2018, following the protracted economic crisis. The respective development might be related to the intermediate variability that frequently characterizes the CLI. However, it could reflect a tendency towards the containment of expectations and assessments concerning the recovery of the Greek economy. On these grounds, the CLI might –by providing leading indications– discount the adjustment of economic activity to a number of short- to medium-term repercussions of the pandemic (with respect to supply chains, production and transportation costs, prices, etc.), in combination with the ongoing uncertainty surrounding its overall evolution. For that reason, re-estimating the CLI is of paramount importance, in order to enforce evidence in the direction either of a prolonged rising course of future domestic economic activity or of a certain (temporary or not) containment of the recovery.


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