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Forecasting the Post-COVID-19 Recovery Pattern
The COVID-19 crisis provides an opportunity to reorient the existing methods and methodologies for data construction. Such a move will also help gradually transit from a data deficit to a data-driven and empirical economic policymaking.
The views expressed are personal.
The COVID-19 crisis has pushed the economies across the globe to rethink the traditional estimations of the gross domestic product (GDP), including the revision methods and statistical models. The unprecedented delays caused by the measures such as lockdown, social distancing, restrictions on the mobility, stagnation of business activities and closure of industries have contributed to the data deprivation during the COVID-19 pandemic period. To overcome these delays, the advanced economies especially the United States (US), United Kingdom (UK), Germany, Japan, and Canada have rolled out initiatives to estimate the GDP by adopting unconventional methods such as using high frequency data to track the growth pattern and its dynamics in real time.
Similarly, the emerging economies like Brazil, Russia, India, China and South Africa (BRICS) have tried to construct economic activity indices using leading indicators with high frequency data sets. Set against this backdrop, it is necessary to examine the claims of the union gvernment’s forecast about the growth recovery pattern that is the V-shaped movement of indices. The Economic Survey 2020–21 states that since March–April 2020 “several high frequency indicators have demonstrated a V-shaped recovery.”
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