The charts provide pictorial information on how the variables in the composite index of economic activity have been impacted by the COVID19 pandemic shock and how these indicators are recovering following the gradual lifting of partial restrictions which begun in May 2020.
On the whole, indications are that the momentum in domestic economic activity continues to pick-up as evidenced by the Bank’s updated Composite Index of Economic Activity (CIEA).
The updated CIEA recorded a strong annual growth of 26.8 percent in March 2021, compared to a contraction of 1.9 percent in the corresponding period of 2020. The key drivers of economic activity during the period were consumption (proxied by VAT collections), construction activities, international trade, resumption of industrial activities and passenger arrivals at the airport.
However, the Bank’s latest confidence surveys conducted in April 2021, showed some dip in both consumer and business sentiments. Consumer confidence dipped slightly on account of recent increases in petroleum prices at the pump, new taxes, and transportation fares.
In a similar direction, the optimism of businesses observed at the last MPC round also softened at this MPC round on concerns that the imposition of new taxes as announced in the 2021 Budget statement and the ongoing electricity maintenance management programme would adversely impact operational costs in the short-term.
Businesses however, expressed optimism about their company and industry prospects.
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