IMF says pandemic may skew economic data and cause them to be less accurate

Key economic indicators may be skewed, and perhaps less accurate, as a result of the coronavirus pandemic, according to the International Monetary Fund.

“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,” the fund said in a blog post this week.

“Without reliable data, policymakers cannot assess how badly the pandemic is hurting people and the economy, nor can they properly monitor the recovery,” read the post written by three members of the IMF’s statistics department.

The blog post comes at a time when many countries are releasing data on gross domestic product for the first three months of the year — when the coronavirus started to spread globally. GDP is a broad measure of the size of an economy and is widely watched indicator by governments, central banks and investors.

In the U.S. — the world’s largest economy — the White House and Congress use GDP data to plan spending and tax policies. The Federal Reserve also considers GDP numbers when setting monetary policy, according to the country’s Bureau of Economic Analysis.

This week, several countries are scheduled to release their GDP data, including India, France, Italy, Canada and Brazil.

One crucial hurdle in producing reliable and timely economic statistics during the pandemic is the lockdown measures that have kept the staff of national statistical offices at home, said the IMF.

“For example, the calculation of retail prices often requires physical visits to stores but this is currently not possible in many countries,” the fund explained.

Such disruptions would cause data on prices and production — which are critical for monetary policy and fiscal stimulus decisions — to be delayed or estimated based on partial information, according to the IMF.

The ongoing pandemic has also highlighted the importance of frequently updated data that allow policymakers to make “the best-informed decisions,” the fund said. Many traditional official statistics “are just not sufficiently up to date to be useful at this time,” it added.

The fund cited the U.K., which started to release weekly bulletins with “new and experimental indicators” including online price indexes and daily shipping data to measure the impact of the coronavirus on inflation and trade.

IMF says pandemic may skew economic data and cause them to be less accurate, CNBC, May 29