By Louis Marc Ducharme, James Tebrake, and Zaijin Zhan
Accurate and timely economic data are crucial for informing policy decisions, especially during a crisis. But the COVID-19 pandemic has disrupted the production of many key statistics. Without reliable data, policymakers cannot assess how badly the pandemic is hurting people and the economy, nor can they properly monitor the recovery.
We are working with member countries and other international agencies to address these data disruptions and keep economic data flowing.
The significant data disruptions due to the COVID-19 pandemic require innovative data collection methods and data sources.
Three key statistical challenges
First, many staff in national statistical offices are now working from home due to lockdowns, often with limited access to the tools and data they need to produce and disseminate economic indicators. For example, the calculation of retail prices often requires physical visits to stores but this is currently not possible in many countries. Similarly, surveying businesses about their production and investment plans is difficult as many have temporarily shut down or simply do not have the resources to respond to statistical questionnaires. These disruptions mean that data on prices and production—critical for calibrating monetary policy and fiscal stimulus measures—may either be delayed or have to be estimated based on partial information.
Second, inconsistent approaches to recording government support to people and businesses may complicate the assessment of their impact on public finances. How best to reflect some of these measures is not so straightforward. For example, when a government provides financial support to companies affected by COVID-19, is it making a financial investment or is it providing subsidies with no return expected? Depending on the answer, policymakers will get a different picture of the fiscal deficit and public debt.
Third, to make the best-informed decisions, policymakers need a real-time readout of the economy. Many traditional official statistics—even those with monthly frequency—are just not sufficiently up to date to be useful at this time. Higher-frequency alternative data are needed to complement official statistics. While the important role of alternative indicators was already recognized before the pandemic, the disruptions of traditional statistics caused by the current crisis have made it more urgent.
Tackling data disruptions
Countries can benefit from guidance on how to fill these data gaps during the pandemic. Our recent guidance notes offer recommendations and best practices to ensure continuity of key statistics for prices, growth, and trade.
Key recommendations include:
Prioritizing and focusing on data components that have the highest impact on critical statistics.
Temporarily estimating or imputing values for missing data components using alternative data sources, market intelligence, and best judgement. Examples include replacing missing prices due to store closures with online prices or crowdsourced data (turning to internet communities to help collect data) and replacing in-person travel surveys, which are now impossible due to social distancing, with immigration records.
Enhancing transparency of statistical procedures by adequately disclosing the methods used to estimate missing and imputed data and notifying users in advance about delays in publishing key statistical indicators.
With countries around the world experiencing similar data challenges during this crisis, information sharing and peer learning is critical to benefit from best practices. The IMF, together with Eurostat, the Organisation for Economic Co-operation (OECD), the United Nations, and the World Bank, is supporting this effort through video conferences and a COVID-19 portal for compilers hosted by the OECD. IMF guidance notes on how to record key types of government interventions complement these efforts.
Today, with the urgent need for new data sources to support real-time monitoring of economic activity, countries have been stepping up efforts to find higher frequency and more granular information to identify and quantify the impact of the virus faster. For example, the United Kingdom started to release weekly bulletins with new and experimental indicators, including online price indices and daily shipping data to measure the economic impact of COVID-19 on inflation and trade. South Africa, using online prices from retail stores, has compiled an Essential Products Consumer Price Index. The IMF is incorporating these and other new data sources to analyze the economic and financial impact of COVID-19, including, for example, by tracking activity in specific sectors and mobility through high-frequency energy consumption and flight data.