Measuring the Economic Impact of COVID-19 with Real-Time Electricity Indicators

The COVID-19 pandemic is posing unprecedented challenges, making it difficult for policymakers to design appropriate policies. In this context, real-time information can play a most valuable role forpolicy makers in developing countries, particularly since official economic indicators, such as the evolution of GDPand unemployment, not only are released with considerable delays, but also are not always fully reliable. This paperfollows the literature by using the dependent variable electricity consumption per capita as a proxy measure ofeconomic activity in the short run. Based on this method, it examines the short-run economic impact of the pandemicitself, as well as the public health restrictions that were adopted to control the outbreak and the macro-economicmeasures applied to revive the economy. The analysis confirms the significant cost of lockdown measures in termsof reduction in economic activity but finds that the spread of the disease itself had an economic impact distinct fromthat of the lockdown measures. The analysis shows that the use of expansionary fiscal and monetary policies also playeda key role in mitigating such an impact, driving some initial recovery. Finally, the evidence points to a completestructural break in economic activity at the onset of the lockdown period.